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

Creating value through the capitals


Manufactured capital

Through our manufactured assets – such as our buildings, equipment and transport infrastructure – we create value for the Company in the form of revenue from operations; and create infrastructural value for the wider economy, while reducing the cost of doing business in South Africa. While our road-to-rail strategy impacts positively on natural capital by reducing carbon emissions and air pollution, new rail, ports and pipeline infrastructure projects could adversely impact ecosystems and result in contamination of the natural environment and generate a variety of outputs in the form of waste materials as by-products.

Manufactured capital


1. Inputs
  • Property, plant and equipment R313,4 billion
  • Rail track 30 400 km
  • Petroleum and gas pipelines infrastructure 3 800 km
  • Port, rail and pipelines infrastructure
  • ICT systems, digital platforms and cloud services
  • Information and communications technology (ICT)
2. Key factors impacting manufactured capital
  • Capital projects: Deterioration in the macroeconomic environment > renders certain infrastructure capital projects unviable. Reprioritise capital projects to ensure capital investment affordability
  • Delivering rolling stock: Market challenges > Freight Rail to review delivery of rolling stock in line with validated demand
  • The current aged fleet is being retired > reduces locomotive capitalised maintenance
  • ICT infrastructure: Adapt to rapid advancements in digitalisation > explore 3D printing, drone technology, big data and advanced analytics
  • Future security models > move from a ‘closed loop’ system to an interconnected networked system with other cloud data centres
3. Approaches to managing manufactured capital outcomes
  • A ‘cradle-to-grave’ solutions Specialist Unit (Group Capital) > advises Transnet and clients on capacity solutions
  • Integrated Capital Projects/Programme > integrated view of the capital portfolio
  • TVCC > transparency of projects in the capital pipeline
  • Robust business case validation > test project viability
  • The Assurance Framework (ICPAF) > augments the assurance and control framework around capital projects
  • Programme prioritisation > allocates resources to programmes best aligned with strategy
4. Manufactured value created
  • Critical logistics infrastructure to meet national economic growth demands
  • Freight Rail > world-class heavy-haul ore export lines transporting a range of general bulk and containerised freight commodities
  • Engineering > original equipment manufacturer (OEM) for wagons and becoming a locomotive OEM (in-service maintenance, repair, upgrade, conversion, design and manufacture of various types of wagons, coaches, locomotives as well as equipment, machines and services)
  • Port Terminals > operates major port container terminals as critical facilitator of international cargo trade
  • Pipelines > strategic in the petroleum products supply chain, ensuring capacity anticipates demand, thus securing inland product supply
  • ICT >
    – Electronic enclosures and certain mechanical sub-components
    – Track-and-trace technology to track port assets, (e.g. tugs and dredgers)
5. Trade-offs – Manufactured capital impacts on other capitals
  • Value
    Manufactured
    Manufactured
    Financial
  • Generated from operators
    infrastructure-
    intensive environment
    ongoing
    usage in
    operations
    revenue from
    business
    operations and
    equipment usage
    Decreased Increased
  • R89,4 million
    Financial
    Social
    Natural
     
  • Total value of revenue generated through waste management initiatives
    sale of
    scrap metal
    responsible
    corporate
    citizenship
    biosphere
    rehabilitation
    through waste removal
     
  •  
    Financial
    Human
    Human
    Intellectual
  • Infrastructure requirements to meet the 4th Industrial Revolution
    investment
    spend
    some existing jobs may become redundant and replaced by technology
    develop new service areas for people to fill
    develop new ICT competencies and digital skills
  • 12
    Manufactured
    Natural
    Financial
    Social
  • Significant
    environmental
    incidents in 2018
    damage
    caused to
    infrastructure
    biospheric
    damages caused
    by spills or waste
    costs of
    biospheric
    rehabilitation
    loss of trust/
    reputation
  • 80
    Manufactured
    Natural
    Financial
     
  • Running line derailments
    damage to infrastructure (e.g. trains)
    loss of fauna on rail paths of on coming trains
    cost of infrastructure repairs and maintenance
     
  • 140
    Manufactured
    Financial
     
     
  • Shunting derailments
    damage to
    infrastructure
    (e.g. trains)
    cost of
    infrastructure
    repairs and maintenance
     
     
  • 61
    Human
    Social
     
     
  • Safety incidents in operations
    safety incidents
    and possible public
    fatalities
    safety incidents
    and possible
    public fatalities +
    reputational damage
     
     
6. Key outputs
  • Transnet concluded a locomotive acquisition contract in 2014 which resulted in the acquisition of 1 064 new locomotives for General Freight and Coal businesses
    402 locomotives accepted into operations
    16 locomotives delivered and undergoing acceptance testing
  • Port expansion
    Lengthening and deepening of Durban Container Terminal berths 203 to 205
  • Capacity expansion for manganese
    Expanded beyond 5,5 mt
  • Export coal expansion
    Expanded to 81 mtpa
  • Waterberg upgrade
    Stage II
  • Nmpp project
    The 24” main pipeline and 16” inland pipelines are fully commissioned and operational, and transported 199,48 billion litres of diesel from Durban to the inland region since commissioning
  • Wagon modernisation plan
    86 new SCL wagons for the automotive business
    346 CR wagons to be used within the mining sectors to transport ore from shafts to processing plants and for servicing the automotive market