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Transnet tpt sd


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Transnet tpt sd

  1. 1. UNIDOPresentation on TPT’s SD Plans 26th of July 2012
  2. 2. Contents SD : Background and Objectives SD : Proposal vs Final plan Tender gateways : SD and BBBEE TPT Equipment acquisitions 2
  3. 3. A lack of investment in infrastructure has impacted the capacity and capability of the local industry to do business in South Africa and subsequently economic growth Historical Background Impact on industry  There has been a significant decline in SA local industry over the past years largely due to a lack of consistent investment in infrastructure  The overall impact both from the lack of investment in infrastructure and the Ratio of Gross Fixed Capital suppression of a large percentage of the Formation to GDP (1970-2009) population from partaking in the economy had a significant impact on local industry: 30 25  Loss of key skills and key capabilities 20  Decrease in manufacturing capabilities and thereby export 15 potential 10  Lack of job creation opportunities 5  Increase in the costs of doing 0 business due to higher transportation 1974 1982 1990 1998 2006 costs and longer lead times Furthermore, due to significant historical political and social imbalances a large portion of the SA population were unable to participate meaningfully in the economy thereby creating a gap in wealth distributionSource: SARB Quarterly Bulletin 3
  4. 4. The key difference between CSDP and NIPP is that CSDP allows for theinvestment to take place in a related industry NIPP CSDP Effective Date • Prior to February 2008 • February 2008 Onwards Transaction target • 30 % > R100 million • 30 % > R100 million Focus • Non Related Industry • Related Industry Reporting & • DTI • SOE  DPE Tracking • Not Part of Evaluation Criteria Part of • Not part of SOE responsibility – • Part of Evaluation Negotiation Done by DTI and the Supplier Criteria Spend is channeled into relevant industry development which Transnet can influence 4
  5. 5. Transnet will use its sphere of control to contract with OEM’s as tier-1suppliers Transnet’s CSDP phase one Strategic Approach will be to focus on Tier 1 suppliers to assist them in engaging local Tier 2 suppliers Supplier Development Category Supplier Base Sphere of Control Transnet’s CSDP CSDP Development: Focus Port Equipment Tier 1 Systems – Subsystems CSDP Focus Suppliers’ Transnet’s ED and Tier 2 s PP Focus Assemblies Suppliers’ Focus Tier 3 Components Sphere of Influence BBBEE Focus Other ED Development **ED – Enterprise Development / PP – Preferential Procurement 5
  6. 6. Transnet will apply their influence and current resources to actively aligntheir existing SD activities with the objectives of NGP as reflected below iSCM/Supply Chain Quantum Leap Focus New growth path • Increase productivity • Increase employment intensity of the and efficiency economy • Volume growth • Reduce the cost to • Capital investment improve infrastructure Regulatory and address • Financial stability competiveness Increase • Funding Volume productivity growth • Balanced spatial • Human capital & efficiency development of rural Improving • SHEQ Human areas and poorer SHEQ customer Resources • Regulatory provinces’ service • Improve customer Financial Capital • Reduce the carbon sustainability investment intensity of the service economy Funding • Create opportunities in changing regional and global environments • Increase black ownership and entrepreneurship 6Source: Transnet Corporate Plan 2011/12
  7. 7. A shared aspiration for SD was created by merging Governments andTransnet’s objectives Government’s Objectives Transnet’s Objectives • Volume and Revenue Growth • Increase the percentage of the population • Creating Capacity Objectives Corporate involved in quality formal employment • Operational Efficiency Vision opportunities • Financial Strength • Address wealth distribution disparities in the • SHEQ country by ensuring the participation of previously disadvantaged groups in the • Promote the economy 1) Empowerment of previously Objectives SD • Maintain a healthy balance of payments position Principles disadvantaged groups SD by reducing the reliance of South African 2) Increase in local content industries on imports 3) Improvement of skills and create • Increase the participation of public enterprises in opportunities for sustainable jobs increasing levels of real fixed capital Guiding Principles formation Values • Security of Supply Supply Chain • Develop key skills and capabilities required • Reduction in Costs for specific industries where these do not exist • Reduction in Working Capital • Enhanced Preferential Procurement and Enterprise Development External Analysis Internal AnalysisSource: Transnet Corporate Plan, NGP, B-BBEE, CSDP
  8. 8. Supplier Development (SD)• Supplier development refers to the improvement in the socio- economic environment by creating competitive local suppliers via Competitive Supplier Development and other initiatives. This results in a local supply base that can eventually be competitive to market its goods on the international market leading to increased exports• Transnet’s SD strategy aims to holistically satisfy all of Government’s legislation and requirements in respect of identifying and undertaking opportunities through specific initiatives 8
  9. 9. CSDP opportunities are generally triggered for transactions equal or exceeding USD10 million for all tenders after February 2008 Trigger for a CSDP transaction: Criteria to be considered to initiate a CSDP transaction: • To avoid capital leakage; • When an opportunity to develop a local industry within Transnet’s supply chain; and / or • When a limited local supply base exists but the potential to develop existing suppliers is evident; and / or • Where there is a strong opportunity for IP and skills transfer to local suppliers and / or Transnet for • SOE influences OEM/multinational for CSDP which the capacity does not presently reside in South transactions . Africa • The following will trigger a CSDP transaction which involves the purchase of services and goods: - Single New Contract with an imported content Tender Process: portion that is equal to or exceeds USD 10 million*; • All contracts sent to the market equal or exceeds - Contract with a renewable option clause, should R70million* will include a CSDP obligation as part the option be exercised, the total value of the of the tender, imported content would be equal to or exceed • A CSDP Proposal must be submitted as part of USD 10 million* the tender •A CSDP Plan must be signed submitted within 30 - No CSDP obligations (after Feb 2008) may be claimed for a NIPP – Double Counting days to Transnet after signing the Letter of Intent All CSDP obligations will be considered as standalone -obligations (LOI) and be agreed and signed within 15 days for each specific tender; thereafter by both parties - Where a CSDP obligation has not been mutually agreed between Transnet and the Supplier after February 2008 a CSDP Reconciliation Plan (to date) must be submitted by the Supplier to Transnet and agreed and signed off by both parties.* Total Value planned to spend with a Supplier - (USD 10 million ~ R70 million.** All CSDP Capability and capacity building in SA efforts initiated by the Supplier since the award of the contract to date must be included into the plan. 9
  10. 10. The IC3 Matrix is used as the basic framework to plot the SD opportunities identified in its appropriate SD initiative bucket IC3 Supplier Development Classification Matrix2 Not currently a focus area High Programmatic1 Industrialisation Strategic Importance to Transnet The IC3 supplier development classification matrix assists in Strategic categorising opportunitiesIndustrial leverage according to their industrial leverage, value leverage and Capability and strategic importance to capacity Transnet building in SA and Supplier Once opportunities are Development identified it will be possible to Small identify the tools that should Enterprise Focused be implemented to maximise the full supplier development Development potential from the Skills opportunities Low Development Low High Value leverage Value Leverage refers to transactions where the financial scale of the transaction allows the buyer the opportunity to negotiate supplier development. Industrial Leverage refers to transactions whereby the nature of the procurement is such that the scale and the industrial complexity of the item being purchased allows for local supply chain development around a particular industry. Strategic Importance to Transnet refers to the extent to which the product to be procured has a impact on Transnet’s core business. 1 This could be further refined in the future through the DPE Programmatic Policy 2Adapted from the DPE Supplier Classification Matrix focused on Increased Competitiveness, Capability and Capacity. 10
  11. 11. Strategic objectives within each quadrant have been identifiedIC3 quadrant Strategic Objective Key Outcomes • Assist Government achieve their industrialisation • Industrialisation objectives through development of local supplier base to • Technology transferProgrammatic increase the cost efficiency of fleet procurement, support • Job creation/preservation and maintenance • Skills Development • Downstream Supplier Development • Increased exports • Reduction in capital leakage • Influence multinational organisations toward initiatives • Capability and capacity building in that lead to the development of local downstream SA Strategic suppliers through large-scale SOE procurement in order to • Increased Technology transfer develop a competitive local supplier base focusing on • Job creation/preservation Rolling stock, Port Equipment and Infrastructure • Skills development • Assist local suppliers to improve their performance, • Job Creation/preservation enhance their existing production & skills capabilities by • Empowerment Focused placing increased emphasis on benefiting previously • Skills Development disadvantaged individuals and rural development • Rural Development • Provide a platform through which local suppliers can test their local innovations for export promotion • Assist local suppliers to improve their skills by placing • Empowerment Small increased emphasis on benefiting previously • Rural Development Enterprise disadvantaged individuals and rural development in line • Skills Development Development with the BBBEE strategy • Job Creation/preservationTransnet has to develop an internal policy to support product development and funding as the current innovation policy drafted by the DPE only allows for testinglocal products in the Transnet operating environmentSource: Team analysis 11
  12. 12. Figure 2: Transnet value capture through supplier influence Programmatic Strategic Focused Small ED Decreasing • Industrialisation emphasis on evaluation Programmatic criteria • localisation • Localisation categories • Technology • Technology Sphere of transfer/ transfer/ influence sustainability sustainability Strategic • Job creation/ • Job creation / • . Job creation/ preservation preservation preservation • Skills • Skills • Skills development development development Focused • Small business • Small business • Further promotion promotion recognition* • Rural • Further • Further development recognition* recognition* • Further and regional Small Enterprise recognition* integration Development • Rural • Rural development development • Small business • Job and regional and regional promotion preservation integration integration *Points allocated in further recognition of certain components of BBBEE in line with Transnet and government objectives** Indicative and varies on business and Macro Economic need 12
  13. 13. The recommended SD categories are based on the alignment withgovernment objectives Category Description • Developing local capability and efficiency through : investment in plant, increasing the number Capability and of products bought locally and qualifying suppliers to meet international standards. capacity building • This criterion refers specifically to industrial capability building that focuses on value-add in SA activities of the local industry through manufacturing or service-related functions. Technology • Refers to process, know-how and Intellectual Property associated with developing a transfer/ competitive local supplier post the current transaction Sustainability • Refers to skills transfer with an emphasis on the accumulation of knowledge and experience Skills • Generally targeted toward sector specific skills development with a focus on artisan and development technical skills • Refers to an increase or preserve in the number of jobs due to the award of business from Job creation/ Transnet preservation • Favouring more labour intensive methods for job creation • Jobs include both skilled and unskilled Small business • Encourage the growth and expansion of small businesses and start ups through procurement promotion and support mechanismsSource: Team Analysis 13
  14. 14. SD and BBBEE Requirements Contents SD : Background and Objectives SD : Proposal vs Final plan Tender gateways : SD and BBBEE TPT Equipment acquisitions 14
  15. 15. Summary: SD Process Successful SD plan to be Compile proposal Transnet tenderer to agreed upon by as part of SD plan evaluates supplier compile SD Transnet and SD proposal plan supplierResponsible Supplier Transnet Supplier & Transnet Supplier& Transnet • Only a successful bidder • The supplier is expected to • SD (Proposals) will be required to • Once the SD plan has formulate a SD proposal responses will be complete a detailed SD been finalised with to identify the evaluated on their ability Plan and deliver it to Transnet, the supplier opportunities that the to leverage Transnet’s Transnet in 30 days after will initiate the plan supplier will pursue long term procurement in signing the LOI • The supplier will be • The SD Proposal should order to promote • Both the Supplier ad required to report address the main areas Capability and capacity Transnet must agree and quarterly on the  Capability and building in SA in order to sign the final SD plan 30 progress being made capacity building in SA; increase the capability and days thereafter against the plan, the  technology capacity, responsiveness • The SD Plan will have to attainment of milestones transfer/sustainability; and competitiveness of outline the: and the reasons (if any)  skills development; South African supplier – Type of Capability and that goals are not being capacity building in SA  small business industries effort that will be met promotion • The SD Programme’s pursued, • Transnet will supply  job ability to promote skills – Anticipated investment, guidelines to the – Description of products to creation/preservation transfer, Capability and be produced, reporting format required capacity building in SA – Skills transfer ,as well as for the quarterly reports and the sustainability of – Processes, systems, NOTE: the venture will all be technologies and • Both a SD Proposal and SD equipment required taken into account during Plan must be completed . 15 evaluation
  16. 16. SD Plan: Capability and capacity building in SASummary – Supplier (x/x) ExampleCategory Description Sub-initiative Key KPIA Total Summary • 1.0 xxx • R xxx.xm Capability and • 2.0 xxx • R xxx.xm capacity • 3.0 xxx • R xx.xm building in SA • Total Capability and capacity building in SA Value • R xxx.xm 1.0 xxxx • xxxx • Rx.xm 2.0 xxxx • xxxx • Rx.xm 3.0 xxxx • xxxx • Rx.xmTransnet Authorised Signatory Date Supplier Authorised Signatory DateName / Title Name / Title 16
  17. 17. SD Plan: SD Capability and capacity building in SA Initiative (x/x)Initiative Description: Target KPI Detailed Description Transnet Lead: R x.x* ZAR TPT Lead: # of reports Supplier Lead: x completed Supplier Lead: TBD at # of Start Date: selection components meeting selected End Date: Reporting Frequency: Quarterly (xx May CY, xx, xx (one month prior to DPE August CY, xx November CY report) and February (following Year) xx)Transnet Authorised Signatory Date Supplier Authorised Signatory DateName / Title Name / Title 17
  18. 18. SD Plan: SD Capability and capacity building in SA Initiative (x/x) Year 2011 2012 2013 Activity 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxxTransnet Authorised Signatory Date Supplier Authorised Signatory DateName / Title Name / Title 18
  19. 19. SD and BBBEE Requirements Contents SD : Background and Objectives SD : Proposal vs Final plan Tender gateways : SD and BBBEE TPT Equipment acquisitions 19
  20. 20. A three step evaluation strategy will be used in the evaluation of theequipment proposals Evaluate for Evaluate for Evaluate for Evaluate per > Threshold >Threshold >Threshold weighting 1 2 2 3 SD / BBBEE Eligibility Technical Price Award tender to SD successful supplier BBBEE Minimum Minimum Minimum SD/BBBEE Eligibility Technical criteria criteria criteria Equipment SD / BBBEE Eligibility Technical Evaluation weighting (%) threshold threshold threshold 3 Price SD BBBEE Main offer and main (Scorecard and 1 2 2 Further offer plus options recognition criteria) RTG Cranes (Proposal A), 40% 100% 80% 60 20 20 STS Cranes (Proposal B) and RTG Cranes and STS Cranes (Proposal C) Note: The tender indicates that the SD commitment is aimed at achieving at least 30% of the supplier’s tender value as part of the tender bid If no tender passes the 2nd stage technical evaluation, the threshold will be reduced from 80% to 70% 20
  21. 21. SD and BBBEE Requirements Contents SD : Background and Objectives SD : Proposal vs Final plan Tender gateways : SD and BBBEE TPT Equipment acquisitions 21
  22. 22. 7 Year Capital expenditure plans • Transnet’s capital investment over the next 7 years (2012/13 to 2018/19) totals R300billion • Transnet Port Terminals will be undertaking R33billion (11%) of these projects over the next 7 years • TPT’s 7 year investment plan will comprise mainly of the following acquisitions: o Ship to Shore Cranes o Rubber-Tyred Gantry Cranes o Straddle Carriers o Ship Loaders o Ship Unloaders o Mobile Harbour Cranes o Haulers o Trailers o Reach Stackers o Empty Container Handlers 22
  23. 23. Equipment acquisitions : currently in procurement cycle phase Item Project 1 4 x STS Cranes – Ngqura 2 18 x RTG Cranes – Ngqura 3 DGPS (Digital Global Positioning System) - Durban 4 Supply and installation of a monitoring system for refrigerated containers (Reefers) at Cape Town (CTCT & CTMPT), Port Elizabeth (PECT), Ngqura (NCT) and Durban Container terminals (Pier1 and Pier2). 5 Manufacture, supply, delivery and commissioning of 74 Fifth wheel haulers for RBY 6 Manufacture, supply, delivery and commissioning of forklifts – RBY (3x42T;6x32T;10x18T;11x8T); EL (4x7T) and NGQURA (2x2T) 7 Manufacture, supply, delivery and commissioning of 6 Reachstackers – 2 RBY;2 NCT;1 Pier 1 and 1 CTNMPT 23
  24. 24. Equipment acquisitions : SD plans being finalised Item Project 1 1 x Mobile harbour crane for CTN 2 Design review services 3 Manufacture, supply, delivery and commissioning of 14 haulers – 4 Saldanha;10 Pier 1 4 Manufacture, supply, delivery and commissioning of 9 empty container handlers – 2 CTN;2 NCT; 5 DCT 5 Manufacture, supply, delivery and commissioning of 48 haulers for Ngqura 24
  25. 25. Equipment acquisitions : SD plans committed Item Project SD value SD committed committed (R’m) %age of Contract value 1 1 x Ship unloader 15.52 12% 2 28 x Straddle Carriers 23.00 10% 3 7 x Tandem lift STS Cranes 47.00 6% 4 6 x Mobile Harbour Cranes 58.29 23% 5 33 x Haulers 4.07 9% 6 8 x Reachstackers 18.12 16% 25
  26. 26. Equipment acquisitions planned for the remainder of this year (to Mar2013) Item Project 1 Ship unloaders for Bulk terminals 2 Rail Mounted Gantry Cranes for Container Terminals 3 Wharf Cranes 26