Transnet Online Integrated Report 2018

Market Demand Strategy (MDS) themes
  • Financial sustainability
  • Capacity creation and maintenance
  • Market segment competitiveness
  • Operational excellence
  • Human capital
  • Organisational readiness
  • Sound governance and ethics
  • Constructive stakeholder relations
  • Sustainable developmental outcomes
Sustainable Developmental Outcomes (SDOs)
  • Employment
  • Skills development
  • Industrial capability building
  • Investment leveraged
  • Regional integration
  • Transformation
  • Health and safety
  • Community development
  • Environmental stewardship
The Capitals
  • Financial Capital
  • Manufactured Capital
  • Intellectual Capital
  • Human Capital
  • Social and Relationship Capital

Managing stakeholder relationships

Addressing key stakeholder concerns

   

Key issues arising from our Multi-Stakeholder Perception Survey

Key issues/concerns impacting stakeholders

Improving stakeholder engagement
  Transnet’s
response:

  • Our Stakeholder Engagement and Management Procedure details the communication process for consultation, involvement and stakeholder engagement.
  • We are upgrading our stakeholder engagement and management database to be operational in August 2019.
  • Our Community Investment Plan (CIP) will simplify engagement with communities near our operations.
  • Our Stakeholder Policy manages our stakeholder engagement, while iBELONG, our employee engagement solution, connects employees directly to the Company in a preferred language through various modes, including real-time mobile surveys.
  • Group Leadership Team (GLT) members are each assigned an operational area to visit with employees. Issues raised during these visits are prioritised at the GLT structures and addressed accordingly.
Improving overall compliance with
legal and other requirements
  Transnet’s
response:

  • We are communicating our strategic position through the Draft White Paper on National Rail Policy.
  • We have support from the Department of Public Enterprises (DPE) for an appropriate Railway Safety Permit Fee Methodology that is equitable and non-prejudicial.
  • We are involved in the Nersa Discussion Document on Prudency Assessment Criteria.
  • We are engaging with the DPE to highlight the regulatory risks to Transnet and the petroleum industry.
  • We have support from the DPE for an appropriate methodology for the valuation of the National Port Authority’s Regulatory Asset Base that will ensure regulatory certainty and a stable tariff path.
  • We have bilateral agreements with relevant authorities to streamline our processes with regulatory requirements.
  • We continuously monitor and report on compliance to PFMA controls.
Improving transparency
and accountability
  Transnet’s
response:

  • We institute internal forensic investigations into issues relating to contracts.
  • Our team of non-executive directors is leading a review of the Company’s procurement processes relating to the 1 064 locomotive contracts.
  • We engage with financial institutions to inform them of our strategy, planned capital expenditure, operations and financial position and provide ad hoc requests for credit information.
  • We comply with requests from rating agencies for annual reviews and credit information. In our engagements with rating agencies, we provide them with operational and financial information to enable them to provide the market with an independent assessment of Transnet – our sustainability, operations, strategy and impact on South Africa’s economy.
Ensuring financial sustainability
  Transnet’s
response:

  • We have facilities available for bridging finance and to meet short-term maturing obligations, while long-term funding is being concluded.
Improving operational
performance
  Transnet’s
response:

  • We ensure the uniform application of policies and guidelines, as well as processes and standard operating procedures to improve operational efficiencies.
  • Our Operating Divisions collaborate to increase efficiencies.
  • We conduct workshops in the drafting of feeder lines.
  • We have implemented the Transnet Integrated Management Approach across our business.
  • We engage with customers to address their concerns.
  • The TVCC approach streamlines the end-to-end business value chain, optimises processes and improves turnaround times.
Improving health and
safety performance
 
  Transnet’s
response:

  • We are running a ‘Zero Harm’ campaign across the Company.
  • Monthly themes issued by our Health and Safety departments feed into the Visible Felt Leadership (VFL) campaigns, highlighting issues of concern.
  • VFL training was rolled out throughout the ports system and Head Quarters from March 2017 to January 2018.
  • Health and safety incident recall audits are held at hot spots where disabling injuries have occurred.
  • The GLT undertakes visits to operational areas across Transnet to encourage employee engagements with a view to increasing safety awareness.
  • Work stoppages occur across Transnet when investigated outcomes of fatal incidents are presented.
  • We conduct regular safety and awareness campaigns for the public at level-crossing areas.
Improving CSI  
  Transnet’s
response:

  • Our Phelophepa project provides primary healthcare services that complement existing community clinics.
  • Our Teenage Health Programme implements youth-friendly developmental services incorporating physical health and emotional well-being, lifestyle choices, future planning, etc.
  • Our Employee Volunteer Programme will initiate a range of community-based social upliftment activities designed to facilitate rail safety and security infrastructure, construction and renovation, developing a social and economic hub, education and skills development, SMME incubation and promote agriculture and food security.
Improving collaborations
and integration
 
  Transnet’s
response:

  • The TVCC approach streamlines the end-to-end business value chain, optimising processes, improving turnaround times and enhancing customer satisfaction.
  • The Transnet Integrated Management Approach provides a common platform to manage safety, health, environment, quality, risk, security, compliance and other business processes. All business risks are consolidated into one framework, enabling Transnet to unify objectives and standardise processes.
  • The CIP provides a coordinated governance structure to enable proactive and collaborative investment responses to community issues.
Transnet’s overall strategy:
Clarity in terms of the transition from the MDS to Transnet 4.0
  Transnet’s
response:

  • 2019 will be the year of transitioning from the MDS to Transnet4.0 strategy. The MDS is largely a capital-intensive strategy to create capacity to meet validated demand and improve operational efficiencies while remaining financially sustainable.
  • Transnet 4.0 will build on the foundation created by the MDS. Transnet 4.0 will reposition Transnet for competitiveness in the fast-changing, technology-driven context of the 4th Industrial Revolution. Transnet 4.0 is aligned with the Shareholder’s priorities and has three main growth thrusts: (i) geographic expansion; (ii) product and service innovation; and (iii) expanding the scope of Transnet’s manufacturing business.

Communication of the strategy

  • At an Indaba in 2018 we communicated the strategic transition from the MDS to Transnet 4.0 to our internal and external stakeholders.
  • We have established a strategic communications team, comprising representatives from Corporate Affairs, Human Resources and Business Development to create awareness about the new Transnet 4.0 Strategy.
  • The 2018 Integrated Report provides clarity on the transition to Transnet 4.0, including emerging risks, the contextual environment, medium- to long-term capital investment strategies and the Company’s long-term planning horizon – ‘Transnet of tomorrow’.
Skills development  
  Transnet’s
response:

  • The CIP prioritises the intake of learners in communities that are near our operations.
Improving customer service  
  Transnet’s
response:

  • Our robust tariff methodologies for both regulated and non-regulated businesses provide transparent pricing aligned with legal, economic and reputational requirements. The models are updated annually.
  • We conduct regular benchmarks on prices to align with best practice through:
    • Regular pricing studies for road versus rail; and
    • Commodity benchmark studies on major commodities to benchmark rail tariffs.
  • Our centralised customer relationship management solution optimises customer experiences, customer satisfaction and ourengagement with customers.
  • We are engaging in round table discussions to address customers’ complaints and concerns.
Improving environmental
stewardship
  Transnet’s
response:

  • The Sustainability and Environmental Forum – represented by each Operating Division, Specialist Unit and environmental stewardship personnel – provide platforms to discuss and monitor environmental performance.
  • Our environmental risk strategy provides guidelines for implementing sound environmental stewardship.
  • We monitor environmental performance through regular audits and inspections.
  • Bilateral agreements with the Department of Environmental Affairs and Tourism and with the Department of Water and Sanitation help us to streamline the environmental permitting authorisation and licensing processes.
Improving access to information
  Transnet’s
response:

  • Community development personnel will be appointed at district municipality level through the CIP to oversee community development services, including information on jobs and business opportunities.
  • Transnet publishes its information on the intraweb available at www.transnet.net.
  • Our Integrated Report is our primary communication vehicle to all stakeholders, published online at www.transnet.net.
Improving Enterprise Development (ED) and Supplier Development (SD)  
  Transnet’s
response:

  • The CIP provides a cohesive and integrated approach to the implementation of ED and SD initiatives.
  • Supplier hubs provide community development services and business incubation support.
  • Community centres help to facilitate entrepreneurship programmes.
“We are very conscious of the link between reputation and the organisation’s capacity to execute its strategy.”

Mr Mohammed Mahomedy
Acting Chief Financial Officer

Transnet Online Integrated Report 2018