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Transnet freight rail corridor development programme and road to rail strategy

The document outlines Transnet's strategies and investments in the freight rail sector aimed at increasing rail market share, improving infrastructure, and enhancing logistics efficiency. Key focus areas include integrating rail systems, modernizing rolling stock and network infrastructure, and developing multi-user facilities for various commodities. The ultimate goal is to facilitate economic growth through enhanced service delivery, job creation, and reduced logistics costs in the road-rail freight industry.

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Heading heading heading DateTransnet Freight Rail Ms Nisha Jones General Manager Commercial 4 February 2016
PAGE CONTENTS 1 • TFR Rail market share • Integrated Rail System • Development & Rail migration • Bimodal Video • Transnet Infrastructure Investments • Infrastructure development for Economic Growth • Terminals, HUBS and CUF • Road to Rail journey progress • Express Train • Value Chain co-ordination • Volume Growth since MDS implementation • Rail addressable market share • Collaborate to to leverage best of Transport System Advantages • Benefits of Road+ Rail • Corridor Developments
PAGE Rail market share growth is a fundamental driver of the MDS 2 Job Creation Reducing the Cost of Logistics Catalyst for Economic Growth Road-Rail Freight Industry Imbalance Meet Freight Demand & Improve Service Delivery Regional Integration Market Demand Strategy 2
PAGE Integrated Rail System requires effective Interfaces to offer Logistics Solutions 3 Locomotives Network Infrastructure Wagons Crew & Operations Yards – Crew / Loco Changes; Trains National Command & Control Customer Sidings and Loading Equipment Common User Facilities Container Terminals Ports & Back of Port Facilities Freight Nodes & Logistics Parks Collaboration – Road Hauliers and Logistics Service Providers Technology & Systems Investment in Technology – Bimodal & Swop Bodies
PAGE Creating the fundamentals for Logistics Development and Rail Migration  Rolling Stock Locomotives: − New dual voltage locos to reduce throughput time and improve service reliability Wagons: − Develop common wagon chassis to reduce shunting, enable faster wagon turnaround, improved asset utilisation, increased density and lower unit costs − Investigate feasibility of swop body / containers  Infrastructure maintenance & development − “A” standard network upgrade and modernisation − Weighbridges  Development of Terminals, CUFs and Distribution hubs – Location and Upgrading  Technology & Systems − Bi-modal Road–Rail technologies –piloting on NatCor and CapeCor - suitable to service intermodal, agricultural and FMCG flows − Specialised haulage power, handling technologies to work in various terrains and terminals, specialised loading and lifting equipment or trailing vehicles  Customer Siding Development, Maintenance and Management including Loading & Offloading Equipment  Logistics alliances and Logistics skills development  North-South corridor development, operations model, business model and pricing  Real estate development – logistics & warehousing facilities  Systems development – Track and Trace; Web interface 4
PAGE The majority of Transnet investments will be in General Freight within Freight Rail Commodity split (Rbn) Divisional split (Rbn) Major programmes GFB rail capacity growth to meet market demand volumes from 88.0 mt in 2013/14 to ~200mt in 2021/22 Completion of the New Multi-Product Pipeline (NMPP) Increase export coal to 97.5mt – including Waterberg Increase export iron ore to 71.0mt Increase export manganese to 16mt Increase in fleet and improvement to the infrastructure 24 25 32 151 30 3 26 9 Containers (Ports) Export Iron Ore Export Coal GFB Bulk Piped Products Break Bulk Other 4 11 33 47 4 201 Other TPL TPT TNPA TE TFR Other 5
PAGE A catalyst for infrastructure development and economic growth 6 Sishen Saldanha Cape Town East London Port Elizabeth Hotazel Musina Kimberley Polokwane De Aar Ngqura Ermelo Lephalale Durban Richards Bay Johannesburg SADC Containers and Intermodal Iron Ore Manganese Coal Agriculture/ Timber Rock-phosphate/ Magnetite Chrome and Ferrochrome Phalaborwa Maputo Coal Exports :81mtpa  Rolling Stock Fleet Standardisation : EWDP Locomotives & Jumbo wagons  Power Upgrades Capacity Increase : Iron Ore Exports  New loops and in–port rail track  Power upgrades  Tippler & Port handling infrastructure  Increase berth capacity  Additional rolling stock Manganese Exports : 5.5 - 16mtpa  New export facility in Port of Ngqura  Heavy haul rail operating principles  Doubling of sections, provision of new loops and extension of passing loops to accommodate 200 wagon trains General Freight system modernisation & expansion  Locomotives  Wagons  Network Infrastructure 6
PAGE New locomotives being deployed across the network to improve reliability and predictability and reduce transit time Witbank Richards Bay Vryheid Ermelo Pyramidsouth Johannesburg 45D CNR 23E BOMBADIER Phalaborwa Komatipoort Groenbult Musina Polokwane Thabazimbi Lephalale Kaapmuiden Nelspruit Ladysmith Glencoe Durban Kroonstad Bloemfontein Kimberley Sishen Hotazel Saldanha Capetown Port Elizabeth East London Springfontein Noupoort De Aar Beaufort West Standerton Swazi Link Mafikeng Port Shepstone 22E CSR Newcastle 21E CSR Roossenekal Lydenburg Ogies Coligny 44D GE 7 43D GE Assembly in Durban: 23E Bombadier 45D CNR Assembly in Pretoria: 22E CSR 44D GE
PAGE BelconCape Town Port Elizabeth Ngqura Cato Ridge/Umlaas Rd Harrismith Mahikeng Pyramid Sentrarand Tambo SpringsVaal Phalaborwa Musina Polokwane Airport Dig Out DCT (New) Bloemfontein Waterberg Coalfields Coalfields Koppies Kascon/City Deep Richards Bay Maputo Saldanha Sishen Hotazel Lohatla 8 Terminals, CUFs and Hubs to improve integration and service to customers Recent Hub / Terminal Development  Bloemfontein – Containerised Manganese  Pendoring Multi-User Facility – Chrome & Ferrochrome  Lohatla – Manganese  Newcastle – Coal & Ferrochrome  Newcastle - CAB Multi-User, Multi-Product Facility  Maluti-a-Phofung (MAP) IDZ / SEZ development connectivity Super terminal Intermodal terminal Freight nodes Mineral nodes General freight terminal
PAGE Road to Rail Strategy – Journey Progress 9 Market retention  Scheduled railway  Commodity focus 2012 2014 2016 2018 2020 StrategySystemsPricing Investment `Marketing People Market Share 2012 Rail Tons % of Total Surface 11.7% Rail Addressable ~27% Market growth Hubs & Intermodalism Market attraction Integrated logistics service provision / Supply chains  Locomotives  Commodity specific wagons  Network upgrade to ‘A’ Standard  Bimodal technology  Hubs & Terminals  B2B systems & web-based interface  Customer relationship management  Key Account management  Collaboration  Customer experience  PSPs & Alliances  Marketing new services  Management/ Leadership  Operations & Technical railway skills  Culture building  Business Transforma tion Strategy refinement Market analysis & opportunities – 18mt  Heavy haul & other mining – pit to port  Agriculture  Pit to plant  Stockpile to stockpile  Plant to plant  Plant to DC  Domestic Intermodal  DC to DC  SAP  IATS  Lead to Cash Web based B2B Interaction Annual negotiations Volume guarantees Take / Pay Competitive pricing linked to investment Value-based integrated pricing structures  Logistics skills  Commodity Strategies Market Share 2024 Rail Tons % of Total Surface 15.7% Rail Addressable >46%
PAGE Express Train 10
PAGE Value Chain Coordination 11
PAGE Volume Growth following MDS implementation in 2012 - 2015 12 +11,7% 2014 88,0 2013 83,0 2012 81,0 2015 90,5 General Freight Significant rail volume growth despite low economic growth 201,0 2015 226,7 +12,8% 2014 210,4 2013 207,7 2012 Total TFR
PAGE 13 94 95 90 87 88 86 84 83 84 78 72 74 81 83 88 21 24 26 28 30 30 32 37 45 46 52 56 64 67 65 64 66 67 69 67 63 62 62 62 68 69 68 0 20 40 60 80 100 120 140 160 180 200 220 20 25 30 35 40 45 50 55 60 65 70 179 2009 177 2008 179 2007 180 2006 182 2005 181 208 181 27 2003 176 25 2002 181 2001 185 2000 2014 210 54 201320122004 201 2011 182 2010 179 Export Iron Ore Export Coal RAMS Tons General FreightRAMS TonKm Rail Addressable Market Share reflects Rail capture since MDS in 2012 Accelerating Implementation  Developing Bi-Modal technology  Building a commercial and logistics mindset – beyond sale of rail transport  Value propositions to meet specific customer requirements  Building alliances to fast-track opportunities  Building market reputation through reliable and efficient service delivery  Rolling stock and network modernisation programme RAMS – Rail Addressable Market Share
PAGE Collaborate to leverage best of Transport System Advantages 14 Transport System Primary benefits Secondary benefits Rail  High economies of scale  Environmental friendly (Low carbon emissions)  Fuel efficient  Cost advantage  Lowering logistics costs  Reduced road infrastructure & externality costs  Increased safety on roads Road/ Bi Modal  Flexibility  Adaptability  Accessibility  Lower inventory and storage cost  Premium service levels and price Pros  Potential for innovative solutions  Understanding new and untapped markets  Understanding and having direct access to supply chain stakeholders  Create common vision for supply chain success Cons  Sharing of sensitive information  First & Last Mile Pricing vs Integrated solution pricing  Anti-competitiveness (Colluding)  Conflicting Individual Stakeholder strategies Collaboration
PAGE Benefits  Road plus Rail and Intermodal solutions are imperative in a growing freight Transport market o Innovation o Collaboration o Co-operation o Credibility o Trust 15
PAGE 16 CARBON FOOTPRINT IN 2016, THE GOVERNMENT WILL IMPLEMENT A CARBON EMISSIONS TAX, PROPOSED AT R120 PER TONNE OF CO2e (CARBON DIOXIDE EQUIVALENT), WITH THE AMOUNT SET TO BE INCREASED 10% PER YEAR. RAIL OFFERS ~90% MORE ECO-FRIENDLY SERVICE WITH SIGNIFICANT CARBON EMISSIONS SAVINGS ACHIEVED.
PAGE EMISSIONS TAX BENEFIT EXAMPLE BASED ON 100 TEUS MOVED FROM DURBAN PORT- JOHANNESBURG TONNES OF CO2 EMISSIONS EMISSIONS TAX ROAD 306,42 R36 770,40 RAIL 66,82 R8 018,40 SAVING 239,60 R28 752
PAGE LTPF Corridor Development Approach • Corridor Dedication: The LTPF strategy aims to develop corridors dedicated commodity types in the long term; thereby maximizing the gain from infrastructure and service optimization • Operating Philosophy: The LTPF considers the operating philosophy of the entire supply chain, including mainline, loading operations, yards and rolling stock.
PAGE LTPF Corridor Development Approach • Corridor Dedication: The LTPF strategy aims to develop corridors dedicated commodity types in the long term; thereby maximizing the gain from infrastructure and service optimization • Operating Philosophy: The LTPF considers the operating philosophy of the entire supply chain, including mainline, loading operations, yards and rolling stock.
PAGE Summary of LTPF Strategy and Initiatives at a Corridor level Create Long Loops Remodel Salkor Yard OTF Changeover Partial Doubling Common User Facility Heavy Haul Line Botswana Link Swazi Rail Link 150W Loop Extensions Cato Ridge Bypass Compilation Yard Coega Port 25kV AC Conversion 150W Loop Extensions Common User Facility GAUTENG - DURBAN • Long Term: 150W CAB trains. Cato Ridge bypass, Skansdam Link • Medium Term: 75W CAB trains. Double the remainder of the Gauteng Freight ring and improve connectivity and routing • Short Term: Reduce headways to 20min GAUTENG – CAPE TOWN • Long Term: Up to 150 wagon trains, operated in DP mode. Potential for 25kV AC electrification • Medium Term: 75 Wagon trains serving Gauteng Intermodal Super terminals. Further doubling • Short Term: Operational improvements. Partial doubling Kimberley – De Aar NORTH EASTERN SYSTEM • Long Term: GFB bulk export corridor modelled on heavy-haul principles • Medium Term: Swaziland Rail Link alternative route to Richards Bay terminal. 150W bulk trains • Short term: Efficiency improvements. Common user facilities, standard 75W bulk trains COAL SYSTEM • Long Term: 200W Heavy Haul from Waterberg to Richards Bay, single pit-port train configuration • Medium Term: Expand backbone capacity - 2nd and 3rd 26t/a lines • Short term: Efficiency improvements. Project Shongololo increases operational efficiency by bypassing Ermelo balloon. Expand existing Lephalale line capacity 200W DP trains ORE LINE • Long Term: Double line operation • Medium Term: Interim GFB crossing loops • Short Term: Optimise slot capacity through long-loop philosophy MANGANESE LINE • Long Term: 26t/a Axle Load Upgrade • Medium Term: 200W Heavy Haul Pit- Port Operation • Short Term: Bridging Capacity Solutions via Swartkops, Durban Wests, Saldanha MPT Skansdam Bypass Link 40km Doubling 15 min signal spacing 200W Loop Extensions Loop Extensions 200W Crossing Loops Multi User Facility Rail in Port remodeling Short Term: < 7 years Medium Term: 7 – 15 years Long Term: > 15 years
PAGE Iron Ore and Manganese systems Sishe n De Aar Noupoort Kimberley Hotazel Ngqura Port Elizabeth Mossel Bay Saldanh a Port Iron Ore System Manganese System Multi-User facility for train compilation and to service junior miner entrants Multi-User facility for train compilation and to service junior miner entrants Upgrade Strategy • Long Term: Double line operation • Medium Term: Interim GFB crossing loops • Short Term: Optimise slot capacity through long-loop philosophy Phased Doubling (> 17Mtpa Total section demand) 10 Loop Extensions (> 9 Mtpa) 1 New Crossing Loop (>9 Mtpa) 10 Loop Extensions (> 9 Mtpa) Iron Ore Exports Manganese Exports On-The-Fly voltage changeover Salkor North Extension Salkor Yard Remodeling 200W compilation yard Electrification to Tipplers Upgrade Strategy • Long Term: 26t/a Axle Load Upgrade • Medium Term: 200W Heavy Haul Pit-Port Operation facilitated by dual-voltage locomotives • Short Term: Bridging Capacity Solutions via Swartkops, Durban Wests, Saldanha MPT - 10 20 30 40 - 20 40 60 80 100 120 2 New Loops (> 9 Mtpa) GFB Crossing Loops (> 62 Mtpa) 8 Loop Extensions (>16 Mtpa) 1 New Crossing Loop *(…Mtpa ) Manganse Exp Volume *(…Mtpa ) Iron Ore Exp Volume
PAGE Coal and GFB Minerals Richards Bay Port Coal System North Eastern System 26t/a Heavy Haul line (>24 Mtpa) Corridor Dedication Strategy • Dedication of corridors allows for greater optimization and exploitation of network infrastructure, and standardization of train configuration • Coal: Waterberg – Mpumalanga – Vryheid – Richards Bay • GFB Mineral: Rustenburg – Mpumalanga – Phuzumoya – Richards Bay Upgrade Strategy • Long Term: GFB bulk export corridor modelled on heavy-haul principles • Medium Term: Swaziland Rail Link to unlock alternative route to Richards Bay terminal • Short term: Efficiency improvements, creation of common user facilities, standard 75W trains Cross-border link to Botswana coal fields Coal System AC Electrification Common User facility 150 Wagon crossing loops (> 20 Mtpa Magnetit 150W Loops (> 12 Mtpa GFB Bulk) Re-alignment New Davel yard facility Lengthen 6 loops (>11 Mtpa) 2nd and 3rd 26t/a lines Lothair – Sidvokodvo Greenfields Line (> 12 Mtpa GFB Bulk) Upgrade Strategy • Long Term: 200W Heavy Haul operation from Waterberg to Richards Bay, operating on a single pit-port train configuration • Medium Term: Expand existing Lephalale line capacity as interim phase using 200W DP trains. After operations migrate to heavy haul line capacity will be available for GFB bulk expansion. Expand backbone capacity by addition of 2nd and 3rd 26t/a lines • Short term: Efficiency improvements, distributed power and dual-voltage technology to enable 200W trains North of Ermelo. Project Shongololo increases operational efficiency by bypassing Ermelo Pyramid Golela Ermelo Lothair Vryheid Hoedspruit KomatipoortRustenburg Phalaborwa Lephalale Groenbult Musina - 20 40 60 80 - 25 50 75 100 125 150 175 Waterberg System Export Line Lengthen 3 loops (>16 Mtpa) Overvaal tunnel (>90 Mtpa) SRL Heavy Haul Line *(…Mtpa )Coal Exp Volume North Eastern System
PAGE Durban-Gauteng System Cape Town-Gauteng System Port General freight Durban-Gauteng and Cape corridors Durban East London Ngqura Port Elizabeth Mossel Bay Cape Town Saldanh a Port Shepston Richards Bay Upgrade Strategy • Long Term: 150W CAB trains, enabled by DP, servicing Gauteng Intermodal Super terminals, Port of Durban and DDOP . Cato Ridge bypass to separate freight and commuter services. • Medium Term: 75W CAB trains, extend Durban Pier 1 and 2 terminals. Double the remainder of the Gauteng Freight ring and improve connectivity and routing • Short Term: Reduce headways to 20min through operational improvements. Gauteng – Durban System Double 40km (> 40 Mtpa) Skansdam Bypass Double Rooikop - Mapleton Cato Ridge Bypass (> 28 Mtpa) Bayhead yard remodeling for 75/150W trains Conversio n to 25kV AC Phased doubling Lengthen crossing loops for 75W (>3 Mtpa) Regrade, Realign, Lengthen Loops for 150W (>6 Mtpa) Adjust signal spacing to 15 min (> 55 Mtpa) Upgrade Strategy • Long Term: Up to 150 wagon trains, operated in DP mode. Potential for 25kV AC electrification • Medium Term: 75 Wagon trains serving Gauteng Intermodal Super terminals. Further doubling • Short Term: Operational improvements. Partial doubling Kimberley – De Aar King’s rest container terminal Gauteng – Cape System Pyrami d Kimberle y Newcastle Ladysmith Houtheuwe l Bloemfontein Noupoort De Aar - 20 40 60 80 To Coast To Hinterland Large Scale Intervention: New Line - 20 40 60 To Cape To Gauteng 75W Trains (> 37 Mtpa) 150W Trains (> 45 Mtpa) *(…Mtpa )Total volume for all commodities, both directions of trav
PAGE Remodel Salkor Yard OTF Changeover Common User Facility Overvaal Tunnel Double Bleskop - Norite Compilation Yard Common User Facility Multi User Facility Rail in Port remodeling Key Initiatives which have an indirect effect on system capacity There are a number of interventions within the development framework which are not directly linked to capacity but remain key to the successful increase of capacity and improvement in system efficiency • Operational Improvement • Sustainability • Enabler for Change in Operating Philosophy • Logistics Chain Improvement Intermodal Terminal Yards OTF Changeover Common User Facility Grade Separation Grade Separation Rietvallei Chord Regrading for 150W Trains Realignment for 150W Trains DC to AC conversion 150W Consolidation Yard 150W Consolidation Yard Power Supply Upgrade DC to AC Conversion
PAGE MDS Driving Volumes Back to Rail NATCOR/N3 Corridor Forecast growth in freight on this corridor from 45 Billion Ton-Km(2014) to 113 Billion Ton-Km (2045). Rail intermodal traffic has increased substantially :  From 4 trains per day in 2011 to 24 trains per day in 2015,  Average transit time reduced from 30 hours to 22 hours Road continues to carry the majority of freight (approximately 78% in Ton Kilometres) on the N3/Natcor corridor. Transnet is targeting a shift in rail modal share on the N3/Natcor from the current 22% to 39% over the next 30 years. This shift will represent approximately 60% of all rail addressable volumes (RAM) on the corridor.
PAGE Road and Rail: The huge challenge Source: 10 th Annual State of Logistics Survey for South Africa: 2013
PAGE Corridor Capacity Development Tranches Capacity tranches and corresponding expansion projects have been identified. The capacity tranches relate to the dominant commodity on the relevant network, however it should be noted that they may be influenced by changes in commodity mix System Tranche Work Packages Iron Ore 62 – 71 Mtpa Iron Ore Incremental Expansion, Long Loops 71 – 82 Mtpa Iron Ore Intermediate GFB Crossing Loops > 82 Mtpa Iron Ore Doubling Manganese Exports 7 – 9 Mtpa Manganese Exp Phase 1: Lengthen Rosmead Loop, 97km doubling 9 - 16 Mtpa Manganese Exp Phase 2: 2 New Loops, Lengthen 10 Loops, 200W Coega Compilation Yard, 200W trains > 16 Mtpa Manganese Exp 26t Axle Load Upgrade, Lengthen 8 Crossing Loops, Further doubling Coal – Waterberg 5 – 11 Mtpa Coal Lengthen 1 Crossing Loop, Double Bleskop - Norite 11 – 16 Mtpa Coal Exp Lengthen 6 Loops (Stage 3) 16 – 24 Mtpa Coal Exp Lengthen 3 Loops (Stage 4) > 24 Mtpa Coal Exp Construct Greenfields Heavy Haul Line Coal - Backbone + Export 80 – 90 Mtpa Operational Efficiency Improvements (Project Shongololo, Ermelo yard bypass) 90 – 100 Mtpa Double Overvaal Tunnel, Upgrade signaling, Upgrade OHTE 100 – 120 Mtpa 2nd and 3rd 26t/a lines, 25kV AC Conversion, Divert GFB traffic, Upgrade signaling, to 20 min headways
PAGE Corridor Capacity Development Tranches (continued) Capacity tranches and corresponding expansion projects have been identified. The capacity tranches relate to the dominant commodity on the relevant network, however it should be noted that they may be influenced by changes in commodity mix System Tranche Work Packages Gauteng – Durban 25 – 37 Mtpa Total Vol. (North) Increase Operational Efficiency (20 min headways) 37 – 45 Mtpa Total Vol. (North) Accommodate 75W Trains (Lengthen stations, power supply upgrades), Cato Ridge 45 – 55 Mtpa Total Vol. (North) Accommodate 150W trains (25kV AC conversion, power supply upgrades, yard re- configuration) 55 – 67 Mtpa Total Vol. (North) Reduce Headways: Block Splits 20 – 28 Mtpa Total Vol (South) Cato Ridge Bypass Gauteng – Cape Town 12 – 20 Mtpa Total Vol. (North) Lengthen Crossing Loops for 75W 20 – 38 Mtpa Total Vol. (North) 150 Wagon Trains (Regrade, Realign, Loop Extensions), Doubling North Eastern System 12 – 30 Mtpa GFB Bulk Exp Swaziland Rail Link (Greenfields Construction , Brownfields Upgrade), Regrading, realignment for 150W on Swaziland Mainline, Lengthening of Loops 20 – 30 Mtpa Magnetite Exp 150W Trains from Phalaborwa (Lengthen 2 Loops, Extend Lines in consolidation yards). 40 – 55 – 65 Mtpa Incremental Doubling of Single Line Sections (Eastern Mainline)
Heading heading heading Date Thank You……

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Transnet freight rail corridor development programme and road to rail strategy

  • 1.
    Heading heading heading DateTransnetFreight Rail Ms Nisha Jones General Manager Commercial 4 February 2016
  • 2.
    PAGE CONTENTS 1 • TFR Railmarket share • Integrated Rail System • Development & Rail migration • Bimodal Video • Transnet Infrastructure Investments • Infrastructure development for Economic Growth • Terminals, HUBS and CUF • Road to Rail journey progress • Express Train • Value Chain co-ordination • Volume Growth since MDS implementation • Rail addressable market share • Collaborate to to leverage best of Transport System Advantages • Benefits of Road+ Rail • Corridor Developments
  • 3.
    PAGE Rail market sharegrowth is a fundamental driver of the MDS 2 Job Creation Reducing the Cost of Logistics Catalyst for Economic Growth Road-Rail Freight Industry Imbalance Meet Freight Demand & Improve Service Delivery Regional Integration Market Demand Strategy 2
  • 4.
    PAGE Integrated Rail Systemrequires effective Interfaces to offer Logistics Solutions 3 Locomotives Network Infrastructure Wagons Crew & Operations Yards – Crew / Loco Changes; Trains National Command & Control Customer Sidings and Loading Equipment Common User Facilities Container Terminals Ports & Back of Port Facilities Freight Nodes & Logistics Parks Collaboration – Road Hauliers and Logistics Service Providers Technology & Systems Investment in Technology – Bimodal & Swop Bodies
  • 5.
    PAGE Creating the fundamentalsfor Logistics Development and Rail Migration  Rolling Stock Locomotives: − New dual voltage locos to reduce throughput time and improve service reliability Wagons: − Develop common wagon chassis to reduce shunting, enable faster wagon turnaround, improved asset utilisation, increased density and lower unit costs − Investigate feasibility of swop body / containers  Infrastructure maintenance & development − “A” standard network upgrade and modernisation − Weighbridges  Development of Terminals, CUFs and Distribution hubs – Location and Upgrading  Technology & Systems − Bi-modal Road–Rail technologies –piloting on NatCor and CapeCor - suitable to service intermodal, agricultural and FMCG flows − Specialised haulage power, handling technologies to work in various terrains and terminals, specialised loading and lifting equipment or trailing vehicles  Customer Siding Development, Maintenance and Management including Loading & Offloading Equipment  Logistics alliances and Logistics skills development  North-South corridor development, operations model, business model and pricing  Real estate development – logistics & warehousing facilities  Systems development – Track and Trace; Web interface 4
  • 6.
    PAGE The majority ofTransnet investments will be in General Freight within Freight Rail Commodity split (Rbn) Divisional split (Rbn) Major programmes GFB rail capacity growth to meet market demand volumes from 88.0 mt in 2013/14 to ~200mt in 2021/22 Completion of the New Multi-Product Pipeline (NMPP) Increase export coal to 97.5mt – including Waterberg Increase export iron ore to 71.0mt Increase export manganese to 16mt Increase in fleet and improvement to the infrastructure 24 25 32 151 30 3 26 9 Containers (Ports) Export Iron Ore Export Coal GFB Bulk Piped Products Break Bulk Other 4 11 33 47 4 201 Other TPL TPT TNPA TE TFR Other 5
  • 7.
    PAGE A catalyst forinfrastructure development and economic growth 6 Sishen Saldanha Cape Town East London Port Elizabeth Hotazel Musina Kimberley Polokwane De Aar Ngqura Ermelo Lephalale Durban Richards Bay Johannesburg SADC Containers and Intermodal Iron Ore Manganese Coal Agriculture/ Timber Rock-phosphate/ Magnetite Chrome and Ferrochrome Phalaborwa Maputo Coal Exports :81mtpa  Rolling Stock Fleet Standardisation : EWDP Locomotives & Jumbo wagons  Power Upgrades Capacity Increase : Iron Ore Exports  New loops and in–port rail track  Power upgrades  Tippler & Port handling infrastructure  Increase berth capacity  Additional rolling stock Manganese Exports : 5.5 - 16mtpa  New export facility in Port of Ngqura  Heavy haul rail operating principles  Doubling of sections, provision of new loops and extension of passing loops to accommodate 200 wagon trains General Freight system modernisation & expansion  Locomotives  Wagons  Network Infrastructure 6
  • 8.
    PAGE New locomotives beingdeployed across the network to improve reliability and predictability and reduce transit time Witbank Richards Bay Vryheid Ermelo Pyramidsouth Johannesburg 45D CNR 23E BOMBADIER Phalaborwa Komatipoort Groenbult Musina Polokwane Thabazimbi Lephalale Kaapmuiden Nelspruit Ladysmith Glencoe Durban Kroonstad Bloemfontein Kimberley Sishen Hotazel Saldanha Capetown Port Elizabeth East London Springfontein Noupoort De Aar Beaufort West Standerton Swazi Link Mafikeng Port Shepstone 22E CSR Newcastle 21E CSR Roossenekal Lydenburg Ogies Coligny 44D GE 7 43D GE Assembly in Durban: 23E Bombadier 45D CNR Assembly in Pretoria: 22E CSR 44D GE
  • 9.
    PAGE BelconCape Town Port Elizabeth Ngqura CatoRidge/Umlaas Rd Harrismith Mahikeng Pyramid Sentrarand Tambo SpringsVaal Phalaborwa Musina Polokwane Airport Dig Out DCT (New) Bloemfontein Waterberg Coalfields Coalfields Koppies Kascon/City Deep Richards Bay Maputo Saldanha Sishen Hotazel Lohatla 8 Terminals, CUFs and Hubs to improve integration and service to customers Recent Hub / Terminal Development  Bloemfontein – Containerised Manganese  Pendoring Multi-User Facility – Chrome & Ferrochrome  Lohatla – Manganese  Newcastle – Coal & Ferrochrome  Newcastle - CAB Multi-User, Multi-Product Facility  Maluti-a-Phofung (MAP) IDZ / SEZ development connectivity Super terminal Intermodal terminal Freight nodes Mineral nodes General freight terminal
  • 10.
    PAGE Road to RailStrategy – Journey Progress 9 Market retention  Scheduled railway  Commodity focus 2012 2014 2016 2018 2020 StrategySystemsPricing Investment `Marketing People Market Share 2012 Rail Tons % of Total Surface 11.7% Rail Addressable ~27% Market growth Hubs & Intermodalism Market attraction Integrated logistics service provision / Supply chains  Locomotives  Commodity specific wagons  Network upgrade to ‘A’ Standard  Bimodal technology  Hubs & Terminals  B2B systems & web-based interface  Customer relationship management  Key Account management  Collaboration  Customer experience  PSPs & Alliances  Marketing new services  Management/ Leadership  Operations & Technical railway skills  Culture building  Business Transforma tion Strategy refinement Market analysis & opportunities – 18mt  Heavy haul & other mining – pit to port  Agriculture  Pit to plant  Stockpile to stockpile  Plant to plant  Plant to DC  Domestic Intermodal  DC to DC  SAP  IATS  Lead to Cash Web based B2B Interaction Annual negotiations Volume guarantees Take / Pay Competitive pricing linked to investment Value-based integrated pricing structures  Logistics skills  Commodity Strategies Market Share 2024 Rail Tons % of Total Surface 15.7% Rail Addressable >46%
  • 11.
  • 12.
  • 13.
    PAGE Volume Growth followingMDS implementation in 2012 - 2015 12 +11,7% 2014 88,0 2013 83,0 2012 81,0 2015 90,5 General Freight Significant rail volume growth despite low economic growth 201,0 2015 226,7 +12,8% 2014 210,4 2013 207,7 2012 Total TFR
  • 14.
    PAGE 13 94 9590 87 88 86 84 83 84 78 72 74 81 83 88 21 24 26 28 30 30 32 37 45 46 52 56 64 67 65 64 66 67 69 67 63 62 62 62 68 69 68 0 20 40 60 80 100 120 140 160 180 200 220 20 25 30 35 40 45 50 55 60 65 70 179 2009 177 2008 179 2007 180 2006 182 2005 181 208 181 27 2003 176 25 2002 181 2001 185 2000 2014 210 54 201320122004 201 2011 182 2010 179 Export Iron Ore Export Coal RAMS Tons General FreightRAMS TonKm Rail Addressable Market Share reflects Rail capture since MDS in 2012 Accelerating Implementation  Developing Bi-Modal technology  Building a commercial and logistics mindset – beyond sale of rail transport  Value propositions to meet specific customer requirements  Building alliances to fast-track opportunities  Building market reputation through reliable and efficient service delivery  Rolling stock and network modernisation programme RAMS – Rail Addressable Market Share
  • 15.
    PAGE Collaborate to leveragebest of Transport System Advantages 14 Transport System Primary benefits Secondary benefits Rail  High economies of scale  Environmental friendly (Low carbon emissions)  Fuel efficient  Cost advantage  Lowering logistics costs  Reduced road infrastructure & externality costs  Increased safety on roads Road/ Bi Modal  Flexibility  Adaptability  Accessibility  Lower inventory and storage cost  Premium service levels and price Pros  Potential for innovative solutions  Understanding new and untapped markets  Understanding and having direct access to supply chain stakeholders  Create common vision for supply chain success Cons  Sharing of sensitive information  First & Last Mile Pricing vs Integrated solution pricing  Anti-competitiveness (Colluding)  Conflicting Individual Stakeholder strategies Collaboration
  • 16.
    PAGE Benefits  Road plusRail and Intermodal solutions are imperative in a growing freight Transport market o Innovation o Collaboration o Co-operation o Credibility o Trust 15
  • 17.
    PAGE 16 CARBON FOOTPRINT IN2016, THE GOVERNMENT WILL IMPLEMENT A CARBON EMISSIONS TAX, PROPOSED AT R120 PER TONNE OF CO2e (CARBON DIOXIDE EQUIVALENT), WITH THE AMOUNT SET TO BE INCREASED 10% PER YEAR. RAIL OFFERS ~90% MORE ECO-FRIENDLY SERVICE WITH SIGNIFICANT CARBON EMISSIONS SAVINGS ACHIEVED.
  • 18.
    PAGE EMISSIONS TAX BENEFIT EXAMPLEBASED ON 100 TEUS MOVED FROM DURBAN PORT- JOHANNESBURG TONNES OF CO2 EMISSIONS EMISSIONS TAX ROAD 306,42 R36 770,40 RAIL 66,82 R8 018,40 SAVING 239,60 R28 752
  • 19.
    PAGE LTPF Corridor DevelopmentApproach • Corridor Dedication: The LTPF strategy aims to develop corridors dedicated commodity types in the long term; thereby maximizing the gain from infrastructure and service optimization • Operating Philosophy: The LTPF considers the operating philosophy of the entire supply chain, including mainline, loading operations, yards and rolling stock.
  • 20.
    PAGE LTPF Corridor DevelopmentApproach • Corridor Dedication: The LTPF strategy aims to develop corridors dedicated commodity types in the long term; thereby maximizing the gain from infrastructure and service optimization • Operating Philosophy: The LTPF considers the operating philosophy of the entire supply chain, including mainline, loading operations, yards and rolling stock.
  • 21.
    PAGE Summary of LTPFStrategy and Initiatives at a Corridor level Create Long Loops Remodel Salkor Yard OTF Changeover Partial Doubling Common User Facility Heavy Haul Line Botswana Link Swazi Rail Link 150W Loop Extensions Cato Ridge Bypass Compilation Yard Coega Port 25kV AC Conversion 150W Loop Extensions Common User Facility GAUTENG - DURBAN • Long Term: 150W CAB trains. Cato Ridge bypass, Skansdam Link • Medium Term: 75W CAB trains. Double the remainder of the Gauteng Freight ring and improve connectivity and routing • Short Term: Reduce headways to 20min GAUTENG – CAPE TOWN • Long Term: Up to 150 wagon trains, operated in DP mode. Potential for 25kV AC electrification • Medium Term: 75 Wagon trains serving Gauteng Intermodal Super terminals. Further doubling • Short Term: Operational improvements. Partial doubling Kimberley – De Aar NORTH EASTERN SYSTEM • Long Term: GFB bulk export corridor modelled on heavy-haul principles • Medium Term: Swaziland Rail Link alternative route to Richards Bay terminal. 150W bulk trains • Short term: Efficiency improvements. Common user facilities, standard 75W bulk trains COAL SYSTEM • Long Term: 200W Heavy Haul from Waterberg to Richards Bay, single pit-port train configuration • Medium Term: Expand backbone capacity - 2nd and 3rd 26t/a lines • Short term: Efficiency improvements. Project Shongololo increases operational efficiency by bypassing Ermelo balloon. Expand existing Lephalale line capacity 200W DP trains ORE LINE • Long Term: Double line operation • Medium Term: Interim GFB crossing loops • Short Term: Optimise slot capacity through long-loop philosophy MANGANESE LINE • Long Term: 26t/a Axle Load Upgrade • Medium Term: 200W Heavy Haul Pit- Port Operation • Short Term: Bridging Capacity Solutions via Swartkops, Durban Wests, Saldanha MPT Skansdam Bypass Link 40km Doubling 15 min signal spacing 200W Loop Extensions Loop Extensions 200W Crossing Loops Multi User Facility Rail in Port remodeling Short Term: < 7 years Medium Term: 7 – 15 years Long Term: > 15 years
  • 22.
    PAGE Iron Ore andManganese systems Sishe n De Aar Noupoort Kimberley Hotazel Ngqura Port Elizabeth Mossel Bay Saldanh a Port Iron Ore System Manganese System Multi-User facility for train compilation and to service junior miner entrants Multi-User facility for train compilation and to service junior miner entrants Upgrade Strategy • Long Term: Double line operation • Medium Term: Interim GFB crossing loops • Short Term: Optimise slot capacity through long-loop philosophy Phased Doubling (> 17Mtpa Total section demand) 10 Loop Extensions (> 9 Mtpa) 1 New Crossing Loop (>9 Mtpa) 10 Loop Extensions (> 9 Mtpa) Iron Ore Exports Manganese Exports On-The-Fly voltage changeover Salkor North Extension Salkor Yard Remodeling 200W compilation yard Electrification to Tipplers Upgrade Strategy • Long Term: 26t/a Axle Load Upgrade • Medium Term: 200W Heavy Haul Pit-Port Operation facilitated by dual-voltage locomotives • Short Term: Bridging Capacity Solutions via Swartkops, Durban Wests, Saldanha MPT - 10 20 30 40 - 20 40 60 80 100 120 2 New Loops (> 9 Mtpa) GFB Crossing Loops (> 62 Mtpa) 8 Loop Extensions (>16 Mtpa) 1 New Crossing Loop *(…Mtpa ) Manganse Exp Volume *(…Mtpa ) Iron Ore Exp Volume
  • 23.
    PAGE Coal and GFBMinerals Richards Bay Port Coal System North Eastern System 26t/a Heavy Haul line (>24 Mtpa) Corridor Dedication Strategy • Dedication of corridors allows for greater optimization and exploitation of network infrastructure, and standardization of train configuration • Coal: Waterberg – Mpumalanga – Vryheid – Richards Bay • GFB Mineral: Rustenburg – Mpumalanga – Phuzumoya – Richards Bay Upgrade Strategy • Long Term: GFB bulk export corridor modelled on heavy-haul principles • Medium Term: Swaziland Rail Link to unlock alternative route to Richards Bay terminal • Short term: Efficiency improvements, creation of common user facilities, standard 75W trains Cross-border link to Botswana coal fields Coal System AC Electrification Common User facility 150 Wagon crossing loops (> 20 Mtpa Magnetit 150W Loops (> 12 Mtpa GFB Bulk) Re-alignment New Davel yard facility Lengthen 6 loops (>11 Mtpa) 2nd and 3rd 26t/a lines Lothair – Sidvokodvo Greenfields Line (> 12 Mtpa GFB Bulk) Upgrade Strategy • Long Term: 200W Heavy Haul operation from Waterberg to Richards Bay, operating on a single pit-port train configuration • Medium Term: Expand existing Lephalale line capacity as interim phase using 200W DP trains. After operations migrate to heavy haul line capacity will be available for GFB bulk expansion. Expand backbone capacity by addition of 2nd and 3rd 26t/a lines • Short term: Efficiency improvements, distributed power and dual-voltage technology to enable 200W trains North of Ermelo. Project Shongololo increases operational efficiency by bypassing Ermelo Pyramid Golela Ermelo Lothair Vryheid Hoedspruit KomatipoortRustenburg Phalaborwa Lephalale Groenbult Musina - 20 40 60 80 - 25 50 75 100 125 150 175 Waterberg System Export Line Lengthen 3 loops (>16 Mtpa) Overvaal tunnel (>90 Mtpa) SRL Heavy Haul Line *(…Mtpa )Coal Exp Volume North Eastern System
  • 24.
    PAGE Durban-Gauteng System Cape Town-GautengSystem Port General freight Durban-Gauteng and Cape corridors Durban East London Ngqura Port Elizabeth Mossel Bay Cape Town Saldanh a Port Shepston Richards Bay Upgrade Strategy • Long Term: 150W CAB trains, enabled by DP, servicing Gauteng Intermodal Super terminals, Port of Durban and DDOP . Cato Ridge bypass to separate freight and commuter services. • Medium Term: 75W CAB trains, extend Durban Pier 1 and 2 terminals. Double the remainder of the Gauteng Freight ring and improve connectivity and routing • Short Term: Reduce headways to 20min through operational improvements. Gauteng – Durban System Double 40km (> 40 Mtpa) Skansdam Bypass Double Rooikop - Mapleton Cato Ridge Bypass (> 28 Mtpa) Bayhead yard remodeling for 75/150W trains Conversio n to 25kV AC Phased doubling Lengthen crossing loops for 75W (>3 Mtpa) Regrade, Realign, Lengthen Loops for 150W (>6 Mtpa) Adjust signal spacing to 15 min (> 55 Mtpa) Upgrade Strategy • Long Term: Up to 150 wagon trains, operated in DP mode. Potential for 25kV AC electrification • Medium Term: 75 Wagon trains serving Gauteng Intermodal Super terminals. Further doubling • Short Term: Operational improvements. Partial doubling Kimberley – De Aar King’s rest container terminal Gauteng – Cape System Pyrami d Kimberle y Newcastle Ladysmith Houtheuwe l Bloemfontein Noupoort De Aar - 20 40 60 80 To Coast To Hinterland Large Scale Intervention: New Line - 20 40 60 To Cape To Gauteng 75W Trains (> 37 Mtpa) 150W Trains (> 45 Mtpa) *(…Mtpa )Total volume for all commodities, both directions of trav
  • 25.
    PAGE Remodel Salkor Yard OTFChangeover Common User Facility Overvaal Tunnel Double Bleskop - Norite Compilation Yard Common User Facility Multi User Facility Rail in Port remodeling Key Initiatives which have an indirect effect on system capacity There are a number of interventions within the development framework which are not directly linked to capacity but remain key to the successful increase of capacity and improvement in system efficiency • Operational Improvement • Sustainability • Enabler for Change in Operating Philosophy • Logistics Chain Improvement Intermodal Terminal Yards OTF Changeover Common User Facility Grade Separation Grade Separation Rietvallei Chord Regrading for 150W Trains Realignment for 150W Trains DC to AC conversion 150W Consolidation Yard 150W Consolidation Yard Power Supply Upgrade DC to AC Conversion
  • 26.
    PAGE MDS Driving VolumesBack to Rail NATCOR/N3 Corridor Forecast growth in freight on this corridor from 45 Billion Ton-Km(2014) to 113 Billion Ton-Km (2045). Rail intermodal traffic has increased substantially :  From 4 trains per day in 2011 to 24 trains per day in 2015,  Average transit time reduced from 30 hours to 22 hours Road continues to carry the majority of freight (approximately 78% in Ton Kilometres) on the N3/Natcor corridor. Transnet is targeting a shift in rail modal share on the N3/Natcor from the current 22% to 39% over the next 30 years. This shift will represent approximately 60% of all rail addressable volumes (RAM) on the corridor.
  • 27.
    PAGE Road and Rail:The huge challenge Source: 10 th Annual State of Logistics Survey for South Africa: 2013
  • 28.
    PAGE Corridor Capacity DevelopmentTranches Capacity tranches and corresponding expansion projects have been identified. The capacity tranches relate to the dominant commodity on the relevant network, however it should be noted that they may be influenced by changes in commodity mix System Tranche Work Packages Iron Ore 62 – 71 Mtpa Iron Ore Incremental Expansion, Long Loops 71 – 82 Mtpa Iron Ore Intermediate GFB Crossing Loops > 82 Mtpa Iron Ore Doubling Manganese Exports 7 – 9 Mtpa Manganese Exp Phase 1: Lengthen Rosmead Loop, 97km doubling 9 - 16 Mtpa Manganese Exp Phase 2: 2 New Loops, Lengthen 10 Loops, 200W Coega Compilation Yard, 200W trains > 16 Mtpa Manganese Exp 26t Axle Load Upgrade, Lengthen 8 Crossing Loops, Further doubling Coal – Waterberg 5 – 11 Mtpa Coal Lengthen 1 Crossing Loop, Double Bleskop - Norite 11 – 16 Mtpa Coal Exp Lengthen 6 Loops (Stage 3) 16 – 24 Mtpa Coal Exp Lengthen 3 Loops (Stage 4) > 24 Mtpa Coal Exp Construct Greenfields Heavy Haul Line Coal - Backbone + Export 80 – 90 Mtpa Operational Efficiency Improvements (Project Shongololo, Ermelo yard bypass) 90 – 100 Mtpa Double Overvaal Tunnel, Upgrade signaling, Upgrade OHTE 100 – 120 Mtpa 2nd and 3rd 26t/a lines, 25kV AC Conversion, Divert GFB traffic, Upgrade signaling, to 20 min headways
  • 29.
    PAGE Corridor Capacity DevelopmentTranches (continued) Capacity tranches and corresponding expansion projects have been identified. The capacity tranches relate to the dominant commodity on the relevant network, however it should be noted that they may be influenced by changes in commodity mix System Tranche Work Packages Gauteng – Durban 25 – 37 Mtpa Total Vol. (North) Increase Operational Efficiency (20 min headways) 37 – 45 Mtpa Total Vol. (North) Accommodate 75W Trains (Lengthen stations, power supply upgrades), Cato Ridge 45 – 55 Mtpa Total Vol. (North) Accommodate 150W trains (25kV AC conversion, power supply upgrades, yard re- configuration) 55 – 67 Mtpa Total Vol. (North) Reduce Headways: Block Splits 20 – 28 Mtpa Total Vol (South) Cato Ridge Bypass Gauteng – Cape Town 12 – 20 Mtpa Total Vol. (North) Lengthen Crossing Loops for 75W 20 – 38 Mtpa Total Vol. (North) 150 Wagon Trains (Regrade, Realign, Loop Extensions), Doubling North Eastern System 12 – 30 Mtpa GFB Bulk Exp Swaziland Rail Link (Greenfields Construction , Brownfields Upgrade), Regrading, realignment for 150W on Swaziland Mainline, Lengthening of Loops 20 – 30 Mtpa Magnetite Exp 150W Trains from Phalaborwa (Lengthen 2 Loops, Extend Lines in consolidation yards). 40 – 55 – 65 Mtpa Incremental Doubling of Single Line Sections (Eastern Mainline)
  • 30.