PUBLIC ENTERPRISES PORTFOLIO COMMITTEE BRIEFING ON SOE INFRASTRUCTURE INVESTMENT 25 JUNE 2003.
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Transcript of PUBLIC ENTERPRISES PORTFOLIO COMMITTEE BRIEFING ON SOE INFRASTRUCTURE INVESTMENT 25 JUNE 2003.
PUBLIC ENTERPRISES PORTFOLIO COMMITTEE
BRIEFING ON SOE INFRASTRUCTURE INVESTMENT
25 JUNE 2003
Ministry of Public Enterprises Date - April 20, 2023 Page 2
Restructuring Proceeds and SOE Debt Trend (cont.)
10.7 10.510.8
9.7
8.9
11.1
9.39.7
8.17.8
8.3
4.7 4.8
46.0%
42.3%40.2%
35.8%
29.9%31.4%
27.0%24.7%
21.8%20.0%
22.5%
15.4% 14.9%
0%
10%
20%
30%
40%
50%
60%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Year
Perc
en
tag
e
0
2
4
6
8
10
12
US
$ M
illio
ns
SOE External Debt SOE borrowings as % of International Debt
SOE Foreign Borrowings 1992 to 2002
Ministry of Public Enterprises Date - April 20, 2023 Page 3
-3.33 -4.41-1.70 -2.45
-0.812.16
-2.22
1.674.39
2.85 2.44
-15
-10
-5
0
5
10
15
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Restructuring Proceeds and SOE Debt Trend (cont.)
Surplus of Public Enterprises as % of GDP
Ministry of Public Enterprises Date - April 20, 2023 Page 4
Consolidated SOE capital expenditure programmes
SOE 2002 2003 2004 2005
Transnet 9,033 12,630 7,116 6,644
Eskom 5,641 9,447 12,191 9,334
Denel 234.3 246.3 234.2 170.8
SOE Capital Budgets to 2005 (R millions)
Ministry of Public Enterprises Date - April 20, 2023 Page 5
Selected examples of
infrastructure projects in the
Defence, Energy, and Transport
sectors.
Ministry of Public Enterprises Date - April 20, 2023 Page 6
Energy Sector – Eskom (cont.)
Generation Capital Expenditure Budges 2003 to 2007 R’m
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2003 2004 2005 2006 2007
Avail Build Cost Eff Envir Life Legal Reliab Safety Doc Other Capacity
Ministry of Public Enterprises Date - April 20, 2023 Page 7
Defence Sector – Denel Capital Expenditure for 2003/04
Division 2002/03 forecast
2004/04 budgetOrdnance 118.7 109.3
Aerospace 97.6 126.3
Commercial & IT 31 9.9
Denel Group total 248.8 251.4
Percentage of sales 5 6
Of the total amount spent on Of the total amount spent on business business infrastructure 47% is for maintaining existinginfrastructure 47% is for maintaining existing capacity whilst 43% is investment to increase capacitycapacity whilst 43% is investment to increase capacity
Ministry of Public Enterprises Date - April 20, 2023 Page 8
Energy Sector – Eskom (cont.)
Latest Transmission Supply Plan (2003-07) Dec.2002
Categories 2002 2003 2004 2005 2006 2007
Work Under Construction (WUC) 480 2152 4388 1167 964 420
Capital Spares 35 15 15 15 15 15
Production Equip 30 23 21 25 24 20
Totals 545 2190 4424 1207 1003 455
Ministry of Public Enterprises Date - April 20, 2023 Page 9
Energy Sector – Eskom (cont.)
Eskom Distribution Capital Rolling Plan
Project Categories R’000
Direct Customer Projects 575,190
Strengthening Projects 449,911
Refurbishment Projects 730,863
Electrification Projects 560,371
Land and Rights acquisitions 8,978
Rural Development 33,800
EBSST 74,200
Various other 257,334
ASSET UNDER CONSTRUCTION 2,690,648
Ministry of Public Enterprises Date - April 20, 2023 Page 10
Energy Sector – Eskom (cont.)
Electrification (Cumulative Number Of Homes Electrified)
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
2,100,000
2,400,000
2,700,000
3,000,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
2.8 million homes electrifi
ed211 628
Ministry of Public Enterprises Date - April 20, 2023 Page 11
Energy Sector – Eskom (cont.)
Major Schemes in plan
East Grid Schemes Bayside Aluminium Potline Upgrade Hillside Aluminium 3rd Potline
Integration
Southern & Western Grid Schemes Cape Strengthening: North of Hydra
Scheme Cape Strengthening: South of Hydra
Scheme Aluminium Smelter at Coega
North & North East Grid schemes Simunye RTS: Camden Polokwane Network Strengthening
Scheme Steelpoort Strengthening Adis Substation Integration Rustenburg Network Strengthening
Scheme
Central Grid Schemes Vaal Triangle Strengthening Johannesburg North Strengthening Atlas Bypass and Decommission
Project
Ministry of Public Enterprises Date - April 20, 2023 Page 12
Energy Sector – Eskom (cont.)
Major capital projects within next 5 to 10 years
Platinum and ferrochrome mining expansions within northern region• Vaalwater 132kV Overlay - R23m • UG2 Smelter Line and Substation - R30m • Overyssel Line and Substation - R129m • Tailings Platinum Mine Expansion - R30m • Polokwane Smelter - R38m • Styldrift Platinum Mine Expansion - R36m • Waterval Platinum Project - R27m • Transvaal Ferrochrome Mining - R42m • Waterval Smelter Upgrade - R21m
5 year plan incorporates all reasonably foreseen growth prospects, including platinum basin etc. Potential projects may materialise in excess of plan,
no feel of the risk at this stage
94/95 95/96 96/97 97/98 99/00 2001/2002 2003/2004Durban 112.8 243 216.8 83 9.98
Cape Town 76 68.9 31.5Richards Bay 259.4 222.6 663.2Saldanha Bay 219.5 83.9East London 112 12
Port Elizabeth 59.8
Total 188.8 850.6 439.4 861.6 112 9.98 12
MAJOR PROJECTS - SA PORTS (NOT TOTALS!)
Ministry of Public Enterprises Date - April 20, 2023 Page 14
Transport Sector – Port Operations
State Owned Enterprises
S A PORT OPERATIONS (TRANSNET)
Project Initiated January 2000
Project Finalized / Expected Date of Finalization
December 2005
Policies / Legislation created / implemented
N/A
Date Cabinet Approval Received/Expected
N/A
Proceeds received N/A
Proceeds expected N/A
Advisors appointed N/A
Proejct value R700 MILLION
Restructuring Model Chosen
Recapiltalisation
Jobs created / Jobs Lost
Only jobs in supplier companies will be created
Project Manager Mr Hamilton Nxumalo
Contact Details 031 308 8310
Project – Durban Terminals Upgrade•Overview
•A key part of the port’s cargo handling infrastructure upgrade programme that aims to address capacity problems and to upgrade local facilities to global standards. Key features are:
• Existing crane upgrades by conversion of crane power to 11KV
• Fire protection equipment at container gantries
•Socio-economic impact
• Employment creation during construction phase and improved service to clients
Ministry of Public Enterprises Date - April 20, 2023 Page 15
State Owned Enterprises S A PORT OPERATIONS (TRANSNET)
Project Initiated January 2000
Project Finalized / Expected Date of Finalization
December 2004
Policies / Legislation created / implemented
N/A
Date Cabinet Approval Received/Expected
N/A
Proceeds received
Proceeds expected N/A
Advisors appointed N/A
Project value R921 million
Restructuring Model Chosen Capital expansion
Jobs created / Jobs Lost Jobs created in supplier companies
Project Manager Mr Hamilton Nxumalo
Contact Details 031 308 8310
Transport Sector – Port Operations (concluded)
Project – Iron Ore Terminal Expansion
• Overview
• Construction of expanded bulk handling faclities for the Saldanha Bay Iron Ore Terminal. The IOT is the dedicated export chanel for iron ore mined in the Northern Cape. The expansion is required to raise output from 18 million tpa to 29 million tpa.
• Installation and erection of 4.5km new conveyor belts
• Addition of 2 Shiploaders
• 3 new stacker reclaimers
• Purchase new tipper
• Refurbishment of existing equipment
• Upgrade of existing old equipment
• Socio-economic impact
• Support development of Northern Cape mineral fields and associated additional mining jobs. Increased iron ore exports will be worth R1.6 billion pa.
Ministry of Public Enterprises Date - April 20, 2023 Page 16
• Overview
• Expansion of Terminal from 72 million tons per annum capacity to 82 million tons pa capacity.
• A further coal export facility is envisage at the Dry Bulk Terminal (DBT) in Richards Bay which will in its initial stage permit 800,000 tons of coal export. This will occur based on Environmental Impact Assessment completion
Project – Richards Bay Coal Terminal Capacity Expansion
•It is anticipated that job creation will arise as a result opportunities at mines
•Jobs created / Jobs Lost
•Project Manager
•The project is done in conjunction between Transnet & RBCT for the tune of 2,4 billion rands •Transnet = R1,7 billion RBCT= R700 mil
•Fees Paid (R/Donor Funded)
•Restructuring Model Chosen
•National Port Authority (Transnet)•State Owned Enterprises
•Private to be appointed by RBCT•Advisors appointed
•Proceeds expected
•Proceeds received
•Date Cabinet Approval Received/Expected
•Compliance with Transnet Procurement Policy – emphasis of BEE component in the exporting of coal.
•Policies / Legislation created / implemented
•Estimated finalisation date 2005-06 •Project Finalized / Expected Date of Finalization
•N/A MOA close to finalisation•Project Initiated
Jointly between RBCT & Transnet
N/A
N/A
N/A
Transport Sector – Port Authority
Ministry of Public Enterprises Date - April 20, 2023 Page 18
Transport Sector – Port Operations
State Owned Enterprises
National Ports Authority (Transnet)
Project Initiated January 2000
Project Finalized / Expected Date of Finalization
December 2005
Policies / Legislation created / implemented
N/A
Date Cabinet Approval Received/Expected
N/A
Proceeds received N/A
Proceeds expected N/A
Advisors appointed N/A
Proejct value R900 million
Restructuring Model Chosen
Recapiltalisation
Jobs created / Jobs Lost
Only jobs in supplier companies will be created
Project – Durban 2005•Overview
•A key part of the port’s physical infrastructure upgrade programme that aims to address capacity problems and to upgrade local facilities to global standards. Key features are:
• Upgrade of City Terminals in Durban and creation of expanded terminal
• Infrastructure development for Durban Container Terminal
• Coversion of pier 1 for container handling
•Socio-economic impact
• Employment creation during construction phase and improved service to clients
Ministry of Public Enterprises Date - April 20, 2023 Page 19
Transport Sector – Port Authority (cont.)
Project – Port of East London Deepening of West Quay State Owned Enterprises National Port Authority (Transnet)
Project Initiated March 2001
Project Finalized / Expected Date of Finalization
December 2003
Policies / Legislation created / implemented
OHSA, COID, NEMA Compliance; Transnet Procurement Policy – emphasis of BEE component and transfer of skills
Date Cabinet Approval Received/Expected
Proceeds received
Proceeds expected
Advisors appointed Designed by Protekon - Johannesburg
Fees Paid (R/Donor Funded)
Dredging& Geotechnical - R 1,500 000 Design and Construction - R 10, 853, 000 Total – R 12, 353, 000
Restructuring Model Chosen
Jobs created / Jobs Lost ( Estimate) 40-50 local labour : Unskilled, semi-skilled and skilled
Project Manager Sibongile Ngumbe – Port of East London
Contact Details 043 700 2540 ; 083 496 6569
• Overview
• Dredging and deepening of 250m of West Quay berth R-Extension to 10.7m consistent depth and the stabilization of the quaywall by rock anchors and grouting
• Socio-economic impact
• Enabling car carriers of deeper draft to call at the Port of East London, average 2 vessels per month
• Facilitating and enhancing growth of trade especially in the automotive industry, benefits realised in port and cargo dues, growth in economy as a result of cargo import/export plus the multiplier effect as a result of jobs created
Ministry of Public Enterprises Date - April 20, 2023 Page 20
Project – Construction of Port of Ngqura
Transport Sector – Port Authority (concluded)
•Overview – The construction of the Ngqura Port is effectively the key to
unlock the potential of the Coeg IDZ. Already over 3 million cubic metres of soil has been excavated from the future basin. Key parts of current work
– Marine infrastructure (keywalls and excavation of turning basin)
– Sand bypass system • Dredging is scheduled to start in June • Parallel developments on the land side are building the IDZ
infrastructure and providing bulk infrastructure for the industrial land and access roads
•Socio-economic impact • It is expected that during construction phase approximately
2000 jobs will be created, while the permanent jobs in the port will be fairly few, the potential of the IDZ is enormous (but cannot be quantified at this stage).
•
State Owned Enterprises
National Ports Authority (Transnet)
Project Initiated N/a
Project Finalized / Expected Date of Finalization
Expected finalisation end of 2005
Policies / Legislation created / implemented
Compliance with Transnet Board sanction – emphasis of BEE component in the building of breakwaters and quaywalls
Date Cabinet Approval Received/Expected
N/a
Proceeds received N/a
Proceeds expected N/a
Advisors appointed N/a
Fees Paid (R/Donor Funded)
Dredging works of R423 million (BEE R423) Maritime works (Breakwaters & quaywalls - R 1,429 billion. Sand bypass works R98,8 million Total – R 3,2 billion
Restructuring Model Chosen
N/a
Jobs created / Jobs Lost
Currenlty 650 people working on marine infrastructure. During the first phase of construction on the land side the estimate employment will rise ot 2000 mostly local labour
Project Manager Kgoadi Malatsi
Contact Details 083 308 9547
NET SURPLUS/(SHORTFALL)
-600
-400
-200
0
200
400
600
800
1000
1997/98 1998/99 1999/00 2000/2001 2001/2002
SPOORNET
Ministry of Public Enterprises Date - April 20, 2023 Page 22
State Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2018
Policies / Legislation created / implemented
Government Rail Model adopted
Date Cabinet Approval Received/Expected
Nov 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 29 billion
Restructuring Model Chosen
Re-capitalisation and internal restructuring
Jobs created / Jobs Lost Not quantifiable as knock effect depends on Macro-economic changes
Project Manager Chris Dutton (Chief Engineer)
Contact Details (012) 315 4025
Transport Sector – Rail
Project – Rolling Stock Capitalisation and Refurbishment Programme• Intro
• Spoornet has a fleet of outdated locomotives and wagons. The average age of the existing locomotive fleet is 25 Years. The operating cost, reliability and service quality of running these old locomotives has caused the withdrawal of services and the pricing of services beyond the carrying capacity of the market.
• Socio-economic impact • The recapitalisation programme will allow more efficient
locomotives to be used in the rural areas(primarily diesel). • This will allow the re-vitalisation of the branch line network
and act as an economic multiplier in rural economies. • The overall efficiency and quality of rail services will improve
dramatically, thereby driving down real pricing of rail services, and also increasing the carrying capacity of the rail network. This will result in a shift from road to rail (in conjunction with Government policy initiatives) that will arrest the current level of road degradation and related costs.
• It is envisaged that R 9 Bil of the forecast R 10 bil capex on wagons, will be spent in RSA. Less than 50% of the R 19 Bil total expenditure on locomotives will be spent abroad. The components sourced will be those that are not manufactured in RSA. The successful suppliers will be required to transfer skill over the period to ensure a reduced reliance on foreign expertise, and will be required to embed their technology in Spoornet and develop local support networks.
Ministry of Public Enterprises Date - April 20, 2023 Page 23
Project – Fixed Infrastructure UpgradeState Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2018
Policies / Legislation created / implemented
Government Rail Model Adopted
Date Cabinet Approval Received/Expected
Nov 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 13 Bil
Restructuring Model Chosen
Re-capitalisation and internal restructuring
Jobs created / Jobs Lost Not quantifiable as knock effect depends on Macro-economic changes
Project Manager Danie Barnard(Chief Engineer)
Contact Details (012) 315 4025
Transport Sector – Rail (cont.)
• Intro • The fixed infrastructure plays a significant role in the operational
efficiencies and carrying capacity of the rail network. The spending on this item will be spread across all the provinces and will be procured locally wherever possible.
• As can be seen by some of the examples to follow, the line by line assessment and the development of regional strategies for the Light and low density line system, that will be done in consultation with provincial and local government, business, labour and communities, will require that this investment be spent in areas all around the country and not merely in the big cities and their linkages.
• Socio-economic impact • The procurement of goods and services in the upgrade
localities will have a knock-on effect in those regional and local economies.
• The raising of the carrying capacities and efficiencies of lines will have a downward pressure on real pricing in the medium term and therefore stimulate local economic development and reduce the real cost of logistics faced by rural and peri-urban production.
• This will have the net effect of reducing the cost of exporting goods from marginal areas in the country, and therefore allow the expansion of the basket of goods currently exported.
• This expenditure is further required to raise the safety levels in some areas, support the industrial, mining and development strategies of the Provincial and Local Governments, support the integrated transport strategies at local and provincial levels and also raise the levels of service delivery to surrounding communities.
TRANSPORT SECTOR – RAIL INFRASTRUCTURE
Three basic elements form the backbone of fixed rail infrastructure development:
[1] leasing or outsourcing of selected unviable or LDL
[2] new line development
[3] upgrades of LDL’s, HDL’s or lines that were previously classified as unviable.
NB: identify lines as part of IDZ, SDI, provincial authorities’ development plans, and link to Eskom projects,
agricultural development and new mining and industrial activity.
Spoornet Rail Network
HDL
LDL with noservice
LDL that arenot viable
LDL with
repositioning potential
CAPE TOWN
BETHLE
HEM
KAAPMUIDEN
NE
LSP
RU
IT
BE
LLE
VIL
LE
KOMATIPOORT
MESSINA
GROENBULT
PIETERSBURGPHALABORWA
HOEDSPRUIT
GOLELA
RICHARDS BAY
DURBAN
PMB
MAFEKING
PORT ELIZABETH
EAST LONDON
NOUPOORT
DE AAR
MOSSEL BAY
WORCESTER
SALDANHA
BLOEMFONTEIN
KIMBERLEY
VEERTIENSTROME
KLERKSDORP
KROONSTAD
PRETORIA
RUSTENBURG WIT
BA
NK
POST
MAS
BUR
G
KRUGERSDORPJOHANNESBURG
ISO
OGIES
LADYSMITH
VRYHEID
GLENCOE
NEWCASTLE
ERMELO
Railway Network classification prior to regional development strategies being developed
Touwsrivier
Mid Ilovo
Plaston
Kelso
Eshowe
Utrecht
Hawerklip
NaboomspruitMiddelwit
Vierfontein
Sishen
Saldanha
Cape Town
East London
Port Elizabeth
Mosselbaai
Bredasdorp
ProtemStrandSimonstad
StellenboschFranschhoek
Bitterfontein
Porterville
Atlantis
Prins Alfred Hamlet
RiversdaleKnysna
Calitzdorp
George
Ladysmith
AvontuurPatensie
Klipplaat
Oudtshoorn
Rosmead
Kirkwood
AlexandriaPort Alfred
CookhouseSomerset East
Noupoort
De Aar
Prieska
Upington
Kakamas
Naroegas
Worcester
Sakrivier
CalviniaHutchinson
Kootjieskolk
Beaufort West
Belmont
Douglas
Hotazel
Warrenton
Pudimoe Makwassie
Mafikeng
Ottosdal
Vermaas
Schweizer-Reneke
KlerksdorpOrkney
Coligny
BultfonteinWhites
Westleigh
Bloemfontein
Aliwal North
Sannaspos
Dreunberg
Springfontein
Koffiefontein
HofmeyerSchoombee
JamestownBarkley East
Maclear
Tarkastad QamataQueenstown
Blaney
Bethulie
Seymour
Umtata
FortBeaufort
Amabele
Maseru
Marquard
Ladybrand
Bethlehem
Wolwehoek
Lichtenburg
Warden
Harrismith
Bergville
Kokstad
Matatiele
HardingPort Shepstone
Durban
Kranskop
RichmondUnderberg
Stanger
NkwaliniRichards Bay
VryheidHlobane
Moorleigh
Ladysmith
Roossenekal
SteelpoortGraskop
MachadodorpBelfast
Lothair
Komatipoort
Baberton
Phalaborwa
Messina
Louis Trichardt
Soekmekaar
ZebedielaVaalwater
Nylstroom
J’burg
PretoriaO/fontein
Ellisras
Northam
CharlestownVrede
Potchestroom
Empangeni
Donnybrook
Greytown
Franklin
Kimberley
Marble Hall
Standerton
Bethal
B/plaas
Simuma
Mandonela
Winburg
Theunisen
ChroomvalleiDrummondlea
VirginiaGlen H
HiltonCopperton
CullinanRayton
Uitenhage
Klawer
Thabazimbi Pietersburg
Spoornet lines
NorthcorCapecorSouthcorNatalcorR.BaycorN.WestcorEastcorN.EastcorSalkorSentracorSouthEastCorWestcorFreestate
Beit Bridge
Howick
Nakop
Postmasburg
Erts
Manganore
Palingpan
Rustenburg
Hoedspruit
Glencoe
Newcastle
Arlington
WitbankOgies
Breyten
Krugersdorp
Welverdiend
SentrarandWelgedag
KroonstadGolelaAncona
Ministry of Public Enterprises Date - April 20, 2023 Page 27
Project – Hercules - Magaliesberg Line Tourism ProjectState Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2004
Policies / Legislation created / implemented
North West Tourism Strategy
Date Cabinet Approval Received/Expected
North West Province and Local Government
Proceeds received
Proceeds expected R 180 000
Advisors appointed Line Lease
Project Value Not quantifiable as yet
Restructuring Model Chosen
Public-Public Partnership Nominal Rental Agreement
Jobs created / Jobs Lost Tourism and Rail jobs created cannot be quantified yet
Project Manager Charles Chinyavanhu
Contact Details 011 – 773 2780
• Intro • Spoornet is leasing the Hercules – Magaliesberg
line to the North West Parks and Tourism Board for a nominal amount of R 1000,00 per month. This is to allow the NWPTB to run a tourist rail service that will ensure the ingress of tourism spending into the area.
• Socio-economic impact • SMME opportunities for integrating their products
or services into the rail service offering is in the process of being finalised.
• The rail service itself will create certain jobs in its operation and maintenance.
• This service constitutes an integral part of the economic development strategy in the province.
Transport Sector – Rail (cont.) – North West Province
Ministry of Public Enterprises Date - April 20, 2023 Page 28
Project – New Ferro-Chrome Line (Brits)State Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization
2005
Policies / Legislation created / implemented
Date Cabinet Approval Received/Expected
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 30 mil
Restructuring Model Chosen
Jobs created / Jobs Lost 100 short term construction jobs Un-quantified mining jobs
Project Manager Danie Barnard(Chief Engineer)
Contact Details 012 315 4025
• Intro • This is line is being built to allow the export of
ferro-chrome from Brits to Richards Bay. • Socio-economic impact
• The construction of this line will ensure that the mining output is moved on the railway line and thereby prevent the degradation of the road network in the area. The road maintenance savings are significant.
• The construction of this line in support of the mining development and beneficiation will have significant multiplier effects in the region and locality.
• The total value of product moved to export would be R 2.7 Bil per annum.
• The total amount of inbound supplies and process elements would be plus or minus 135 Tons per annum.
Transport Sector – Rail (cont.) – North West Province
Ministry of Public Enterprises Date - April 20, 2023 Page 29
Project – Umtata – Amabele Line UpgradeState Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2005
Policies / Legislation created / implemented
Eastern Cape development support initiatives
Date Cabinet Approval Received/Expected
Eastern Cape Province Approval
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 108 Mil
Restructuring Model Chosen
Public-Public Partnership
Jobs created / Jobs Lost Not quantified as yet
Project Manager Steve Batyi
Contact Details 011 773 2780
• Intro • The area is suffering an economic decline. Several factories and
facilities have closed. The Eastern Cape Government, in conjunction with Spoornet is upgrading the line to act as an anchor infrastructure corridor. This will raise the carrying capacity of the line and thereby raise the ability to move goods from the inland areas to export facilities in East London.
• An IDZ has been approved at the port and rail facilities in East London. This line will be the prime connection between the IDZ and the inland areas.
• This line is critical to preventing environmental and infrastructural degradation, as the impact of all the traffic on road would have major environmental and road maintenance cost implications.
• This project has reversed the non-viable status of the line and represents the kind of outcome of the line by line analysis and regional consultative process that would be a net contributor to a regionally distributed economic value add infrastructure investment programme.
• Socio-economic impact • The traffic on the railway line has decreased from 19 000 tons in
1997 to 7 000 tons. This traffic was mainly coal and wood poles. • The upgrading of the line will support the planned industrial, mining
and agricultural development in the area and is planned to raise the maximum traffic to 1.5 Million tons a year once the standing timber has matured and the mining production has come on line.
• The commodity profile on the line will change to mainly: timber to chipping facilities in KZN, agricultural and mining products.
Transport Sector – Rail (cont.) – Eastern Cape Province
Ministry of Public Enterprises Date - April 20, 2023 Page 30
Project – Coega ExtensionState Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2010
Policies / Legislation created / implemented
Eastern Cape development support initiatives
Date Cabinet Approval Received/Expected
Eastern Cape Province Approval
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 500 Mil
Restructuring Model Chosen
New Line
Jobs created / Jobs Lost 300 construction period jobs
Project Manager Danie Barnard
Contact Details 012 315 4025
Transport Sector – Rail (cont.) – Eastern Cape Province
• Intro • This line is intended to link up the Coega
development with the Port Elizabeth rail network. • Socio-economic impact
• The operation of this line will raise the financial viability of the Coega Port and the throughput on the IDZ.
• This will directly impact on the employment opportunities in the area.
• This line will reduce the costs of manufacturing and export from the Coega IDZ.
Ministry of Public Enterprises Date - April 20, 2023 Page 31
Project – OREX UpgradeState Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2007
Policies / Legislation created / implemented
Date Cabinet Approval Received/Expected
Government Rail Model
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 160 Mil
Restructuring Model Chosen
Re-capitalisation and internal restructuring
Jobs created / Jobs Lost 250 construction jobs 100 permanent jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780
Transport Sector – Rail (cont.) – Northern Cape Province
• Intro • This line, that carries iron ore from Sishen
to the Saldanha Iron Ore Terminal, is being upgraded from an annual capacity of 26 Million tons to 38 Million Tons.
• Socio-economic impact • This raising in capacity will enable the
mining industry in the province to raise production during favourable market periods and therefore extract maximum possible revenue from their operations.
• This expansion in production will require that additional mining jobs be created.
• The value of the additional iron ore that can be exported as a result of this expansion is R 1,6 Bil per annum
Ministry of Public Enterprises Date - April 20, 2023 Page 32
Project – Northern Cape GFB Line UpgradeState Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2008
Policies / Legislation created / implemented
Government Rail Model
Date Cabinet Approval Received/Expected
November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 400 Mil
Restructuring Model Chosen
Re-capitalisation and internal restructuring
Jobs created / Jobs Lost 300 construction jobs
Project Manager Danie Barnard
Contact Details 012 315 4025
Transport Sector – Rail (cont.) – Northern Cape Province
• Intro • This is a general upgrade of the rail network
in the Northern Cape. • Socio-economic impact
• The impact of this upgrade will primarily be felt by the mining industry and related industries.
• This would raise the carrying capacity of the network in the province to provide for expansion in mineral production.
• The upgrading of the line will support the planned mining and industrial beneficiation in the Northern Cape.
• The line upgrades will be prioritised in the consultative regional process to ensure maximum possible support to Provincial and Local Government development and transport strategies, as well as support to private sector initiatives with job creation or job loss reversal possibilities.
• The upgrade will also raise the rail safety standards.
Ministry of Public Enterprises Date - April 20, 2023 Page 33
Project – Belmont – Douglas UpgradeState Owned Enterprises Spoornet
Project Initiated 200
Project Finalized / Expected Date of Finalization
2004
Policies / Legislation created / implemented
Northern Cape development support initiatives
Date Cabinet Approval Received/Expected
Northern Cape Province Approval
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 20 Mil
Restructuring Model Chosen
Public-Public Partnership
Jobs created / Jobs Lost 120 Construction Jobs Permanent jobs cannot be quantified
Project Manager Charles Chinyavanhu
Contact Details 011 773 2780
Transport Sector – Rail (cont.) – Northern Cape Province
• Intro • Upgrading the line to carry additional maize and
industrial products resulting from economic development initiatives by the Province.
• Socio-economic impact: • The upgrade of the line will enable the Northern Cape
farmers to deliver maize to all corners of the country. • The line will open up tourism opportunities for SMME’s
in the Northern Cape Province. • The impact of all the additional traffic on road that
results from production expansion, would have major environmental and road maintenance cost implications
• A Provincial irrigation scheme is established at the confluence of the Vaal and the Orange rivers. This scheme ensures a flattened traffic flow over all seasons. For the past few years, production in the area has been growing at the rate of 30 % per annum.
Ministry of Public Enterprises Date - April 20, 2023 Page 34
Project – CoalLink UpgradeState Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization
2018
Policies / Legislation created / implemented
Government Rail Model Adopted
Date Cabinet Approval Received/Expected
November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 1.8 Bil
Restructuring Model Chosen
Capitalisation and internal restructuring
Jobs created / Jobs Lost 500 construction jobs 200 permanent jobs will be created
Project Manager Danie Barnard
Contact Details 012 315 4025
Transport Sector – Rail (cont.) – KZN Province
• Intro • This project will raise the carrying capacity
of the line from 64 Mil tons to 82 Mil tons per annum.
• Socio-economic impact • The value of the additional traffic exported
on this line is R 3bil per annum. • The expansion of the line capacity will
ensure that the access of BEE Coal Miners to export facilities will be accommodated at similar operating and costing as that faced by RBCT owners. This is dependant on the upstream consolidation facilities currently under discussion, being in place.
Ministry of Public Enterprises Date - April 20, 2023 Page 35
Project – GFB Line and Facilities UpgradeState Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2008
Policies / Legislation created / implemented
Government Rail Model
Date Cabinet Approval Received/Expected
November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 680 Mil
Restructuring Model Chosen
Capitalisation and internal restructuring
Jobs created / Jobs Lost 200 construction jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780
Transport Sector – Rail (cont.) – KZN Province
• Intro • This project is the upgrading of all fixed
facilities in KZN. • Socio-economic impact
• The raised levels of efficiency resulting from the reduced downtime experienced with outdated fixed infrastructure will put downward pressure on real pricing of rail services and raise the carrying capacity of the network.
• The lowered cost faced by manufacturers will raise their competitive positions in the province’s export industries.
• The upgrade is also intended to add into the initiatives of the Province, such as the Dube Tradeport.
Ministry of Public Enterprises Date - April 20, 2023 Page 36
Project – Ressano Garcia UpgradeState Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization
2018
Policies / Legislation created / implemented
Date Cabinet Approval Received/Expected
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 90 Mil
Restructuring Model Chosen
Public – Public Partnership with Mozambican Rail
Jobs created / Jobs Lost 500 construction jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780
Transport Sector – Rail (cont.) – Mpumalanga Province
• Intro • This is the capex that is required to
upgrade the line for the concession agreement that has been concluded between Spoornet and CFM(the Mozamambican Railway Utility).
• Socio-economic impact • This upgrade will raise the traffic
through the Province. • This upgrade will raise the access to
the Port of Maputo by SMME’s and developing miners in the Province.
Ministry of Public Enterprises Date - April 20, 2023 Page 37
Project – Fixed Infrastructure UpgradeState Owned Enterprises Spoornet
Project Initiated 2002
Project Finalized / Expected Date of Finalization
2006
Policies / Legislation created / implemented
Government Rail Model
Date Cabinet Approval Received/Expected
November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 56 Mil
Restructuring Model Chosen
Capitalisation and internal restructuring
Jobs created / Jobs Lost 200 construction jobs
Project Manager Danie Barnard
Contact Details 012 315 4025
Transport Sector – Rail (cont.) – Limpopo Province
• Intro • This project is the upgrading of all fixed
infrastructure in Limpopo Province. • Socio-economic impact
• The high rate of rail accidents will be curtailed by the significant revamping of the signaling system, thereby reducing the number of temporary line closures and the resultant cost of post accident rehabilitation.
• The raised levels of efficiency resulting from the reduced downtime experienced with the accidents, will put downward pressure on real pricing of rail services and raise the carrying capacity of the network.
• The lowered cost faced by mining and industry will raise their competitive positions in the province’s export industries.
Ministry of Public Enterprises Date - April 20, 2023 Page 38
Project – Kroonstad – Ladysmith Line and Maseru Container Terminal Upgrade
State Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization
2006
Policies / Legislation created / implemented
Government Rail Model
Date Cabinet Approval Received/Expected
November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed NA
Project Value R 44 Mil
Restructuring Model Chosen
Capitalisation and internal restructuring
Jobs created / Jobs Lost 200 construction jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780
Transport Sector – Rail (cont.) – Free State Province
• Intro • This project is the upgrading of the line
to ensure an export corridor for the Vereeniging/Van der Bijl/Sasolburg Industrial complex.
• This project includes the upgrade of the Maseru Container Terminal.
• Socio-economic impact • This line will ensure that the industrial
manufacturers have ready access to the mainline to the Durban Harbour.
• It will further raise the access of manufacturers in Maseru to export markets.
• This line also provides an alternative route for the export of agricultural products from the Free State.
Ministry of Public Enterprises Date - April 20, 2023 Page 39
Project – GFB Line and Facilities UpgradeState Owned Enterprises Spoornet
Project Initiated 2003
Project Finalized / Expected Date of Finalization
2007
Policies / Legislation created / implemented
Government Rail Model
Date Cabinet Approval Received/Expected
November 2001
Proceeds received NA
Proceeds expected NA
Advisors appointed
Project Value R 130 Mil
Restructuring Model Chosen
Capitalisation and internal restructuring
Jobs created / Jobs Lost 100 construction jobs
Project Manager Steve Batyi (Spoornet)
Contact Details 011 773 2780
Transport Sector – Rail (cont.) – Western Cape
• Intro • This project is the upgrading of
facilities in the Western Cape, with a special emphasis on the signaling upgrade to reduce the possibility of accidents, such as that which was recently experienced.
• Socio-economic impact • This will raise the system efficiency in
the Province and ensure that the level of incidents and accidents are reduced, thereby increasing the capacity on the line and raising the level of safety of the interlink between passenger and freight services.