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Coal and Iron Ore Exports

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Presented by: James Martin at the 2009 Railways and Harbours Conference in Cape Town.

Presented by: James Martin at the 2009 Railways and Harbours Conference in Cape Town.

Published in: Business

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  • 1. A Robust Approach to Large Scale Integrated Port and Rail Network Investment – Transnet South Africa James Martin Director Railways Mott MacDonald
  • 2.
    • Introduction
    • Institutional Arrangements
    • Economic Inputs
    • Creating the Asset Investment Plan
    • Programme Execution
    • Conclusions and Practices of Wider Application
    Contents 
  • 3. Introduction 
    • South Africa is a significant player in the bulk materials export market, especially for steam coal and iron ore
    • Its position in the world makes it ideal for commodity movements to both East and West
    • These same advantages apply to many other countries in Africa
  • 4. Introduction 
    • South Africa is also well positioned with good rail links into the Southern Africa region (SADC)
    • This makes its ports accessible exit points from the southern continent
  • 5. Institutional Arrangements 
    • Transnet owns and operates the port and rail infrastructure in South Africa and is therefore pivotal in the delivery of materials from mine to ship
    • As a State Owned Enterprise (SOE) Transnet is able to raise its own capital for investment, but must show returns on the investments made
  • 6. Institutional Arrangements 
    • Transnet Capital Projects was set up to deliver capital investment programmes on behalf of the Operating Divisions
      • Transnet Freight Rail
      • Transnet National Ports Authority
      • Transnet Port Terminals
      • Transnet Pipelines
    • Transnet has commissioned HMG (Hatch, Mott MacDonald, Goba) an international Joint Venture to work alongside it to support project management of work
  • 7. Institutional Arrangements 
    • Transnet Capital Projects has a remit that covers all stages of the project life cycle
      • Master planning
      • Pre-feasibility
      • Feasibility and detailed design
      • Procurement and execution
      • Commissioning
  • 8. Institutional Arrangements 
    • In order to deliver the programme Transnet has commissioned both local and international resources
    • Specific attention is given to small to medium sized contracts for the local market
    • Transnet has also developed in conjunction with HMG the National Infrastructure Plan based on demand forecasts for the next 30 years
  • 9. Economic Inputs 
    • In order to develop a robust infrastructure plan a robust planning process was necessary
    • This started with the National Freight Demand Model developed in collaboration with the University of Stellenbosch
    • The model produces import and export flows of the main products, materials and commodities
    • Regional distribution is recognised at the Magisterial District level
  • 10. Creating The Asset Investment Plan 
    • In order to determine the development requirement for Transnet’s infrastructure two critical factors had to be determined
      • Current capacity and constraints
      • Projected demand ramp up
    • The interrelation of these two components had to be determined in a manner that allowed capacity analysis
  • 11. Creating The Asset Investment Plan 
    • The current rail capacity was developed for the core freight routes and terminals
    • Factors assessed included
      • Track configuration
      • Traction type
      • Power distribution
      • Headway
      • Train configuration
  • 12. Creating The Asset Investment Plan 
    • The current port capacity and usage was developed for the 8 main ports
    • Factors assessed included
      • Commodity type
      • Distribution
      • Area utilised
  • 13. Creating The Asset Investment Plan 
    • In order to assess the effect of demand increases on the rail network corridors a static assessment was undertaken
    • Increase in demand was converted to equivalent train paths and then mapped the output onto the rail capacity
    • Potential port capacity was assessed as part of the process with development plans created for various expansion scenarios
  • 14. Creating The Asset Investment Plan 
    • It become clear that standardisation and an average increase in train length was practical
    • This potentially provides a short to medium term solution to reduce infrastructure investment around the rail network
    TRAIN SLOT CAPACITY - GREENVIEW TO KOMATIPOORT LINE Greenview Rayton 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Rayton Clewer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Clewer Leybank 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Leybank Witbank 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Witbank Uitkyk 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Uitkyk Middelburgt 1 2 1 1 2 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Middelburgt Derwent 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Derwent Wonderfontein 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Wonderfontein Belfast 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 Belfast Machadodorp 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Machadodorp Ngodwana 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 Ngodwana Nelspruit 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Nelspruit Kaapmuiden 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 Kaapmuiden Impala 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 2 Impala Komatipoort 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 CAPACITY EXCEEDS DEMAND FOR CURRENT TRAIN LENGTHS DEMAND EXCEEDS CAPACITY FOR CURRENT TRAIN LENGTHS DEMAND EXCEEDS CAPACITY FOR STANDARD 50 WAGON TRAIN LENGTHS
  • 15. Creating The Asset Investment Plan 
    • Where capacity limits are reached, the first objective is to increase capacity by addressing operational improvements through Vulindlela (blue)
    • Where operational limits are reached (red), infrastructure improvements will provide additional capacity
    Current Slot Capacity Projected Slot Demand Enhanced Slot Capacity Vulindlela Longer trains / standard trains Infrastructure Improvements Operational Limit Enhanced Slot Capacity Infrastructure Limit
  • 16. Creating The Asset Investment Plan  2006 2010 2020 2030
  • 17. Creating The Asset Investment Plan 
    • Further analysis was required to create an investment programme to develop the railway hubs and terminals
    • A Geographical Information Systems (GIS) database was written to map the commodity flows from the Stellenbosch model at the Magisterial District level
    • The model was then used to characterise how the demand and supply of each Magisterial District increased with time
    • This was portrayed pictorially to allow assessment of commodity concentrations that may warrant a railway terminal or hub
  • 18. Creating The Asset Investment Plan  Current Future
  • 19. Creating The Asset Investment Plan 
    • In order to manage the size of the data set the country was consolidated down and a nodal network applied to represent the rail network
    • Commodity movements were then flowed into the model and the resulting outputs used to assess the train traffic requirements at each of the nodes
    • This data was used to assess the potential demand for hubs in a given area
  • 20. Creating The Asset Investment Plan 
  • 21. Creating The Asset Investment Plan 
    • The analysis resulted in a preferred hubs and terminals layout catering for different commodities
  • 22. Creating The Asset Investment Plan 
    • The final step was to engineer and cost the infrastructure interventions required along with construction durations and completion dates
    • The resulting plan is effectively the first consolidated and integrated plan for South Africa and is a major achievement for Transnet
    • The plan is a live document and is updated on an annual cycle
    • Transnet is now able to put any investment into the context of the plan and to move forward in an integrated manner
  • 23. Programme Execution 
    • Once a project moves out of the planning and concept phase Transnet has looked to standardise its approach to execution
    • To provide a consistent and controlled approach to project execution Transnet has developed in conjunction with HMG JV a project lifecycle and gate review process
    • The process interrogates a project at standardised specific points in the lifecycle to ensure that it delivers the intended business benefit
    • Risk is therefore controlled along with a defined set of deliverables
  • 24. Programme Execution 
  • 25. Programme Execution 
    • The aim is to provide good project set up and delivery
  • 26. Programme Execution 
    • The model covers the entire lifecycle
    • It allows for gate reviews at critical times in the project lifecycle
    • It tests projects against the business plan objectives
    • It highlights the risks of fast tracking
    • It creates a good practice culture with a right first time approach
  • 27. Programme Execution 
  • 28. Conclusions and Practices for Wider Application 
    • An outcome of 3 years of work is an combined port and rail infrastructure investment programme, systematically linked through operational and economic models to a 30 year National Infrastructure Plan
    • The plan is based upon real operating practices, capital costs informed by current construction and actual through life costs
    • Such a plan is a national asset, which apart from its internal advantages adds confidence for industrial concerns to whom transport infrastructure is fundamental
  • 29. Conclusions and Practices for Wider Application 
    • Transnet has developed a world-class lifecycle process applicable to rail, port and other capital intensive infrastructure construction
    • It suits mega projects and smaller projects alike
    • By linking project lifecycle and EPCM techniques Transnet’s programme rigor competes with the best for international finance
    • Transnet is achieving its planned rate of mega project construction in accordance with its mandate to provide transportation infrastructure to support economic growth and development
  • 30. Acknowledgements 
    • Transnet Capital Projects
    • HMG JV
    • Stellenbosch University
    • LTE
    • Graham Muller Associates
    • R&H
    • PRDW
  • 31. www.mottmac.com