- Assist in lowering the cost of doing business in South Africa
- Enable economic growth
- Ensure security of supply by providing appropriate port, rail and pipeline infrastructure in a cost-effective and efficient manner, within acceptable benchmarks
- Transnet SOC Ltd is a public company (constituted in terms of the Legal Succession to the South African Transport Services Act, No 9 of 1989), with the South African Government as the sole Shareholder.
- Transnet is the owner of South Africa's railway, ports and pipelines infrastructure.
- The Company's Memorandum of Incorporation – approved by the Shareholder Minister on 25 June 2013 – aligns with the provisions of the Public Finance Management Act (PFMA), the Companies Act and the National Ports Act, No 12 of 2005, as amended (the National Ports Act).
- As a state-owned company (SOC), the PFMA serves as Transnet's primary legislation.
- Transnet signs an annual Shareholder's Compact with the Government of South Africa, represented by the Minister of Public Enterprises. The Shareholder's Compact mandates the Company to deliver on numerous strategic deliverables, including sustainable economic, social and environmental outcomes.
- The Board directs the Company's strategy in response to the Statement of Strategic intent.
Broad-Based Black Economic Empowerment (B-BBEE)
- Transnet's B-BBEE verification covers six of the seven elements of the Generic Transport Public Sector Scorecard (excluding the ownership element). The Maritime, Property and Rail Charters are also applied.
- Transnet achieved the full points for enterprise development and socio-economic development for the 2018 financial year. The post-MDS Transnet 4.0 strategic blueprint will address and maximise the scores for employment equity, preferential procurement and skills development.
Transnet Group's B-BBEE performance per pillar for the 2018 review period
Element Actual score Target Equity ownership N/A N/A Management control 8,59 11 Employment equity 14,17 18 Skills development 19,56 25 Preferential procurement 28,51 33 Enterprise development 15,00 15,00 Socio-economic development 5,00 5,00 Total 90,83 107 B-BBEE Level 2
Total employees 55 666
Total employees represented by collective bargaining as a % of total headcount 89,0%
People with disabilities 2,4%
Permanent employees 51 324
Permanent employees represented by collective bargaining as a % of total headcount 81,4%
Non-permanent employees 4 342
Integrated Supply Chain Management function
|Optimises inbound supply-chain activities|
|Enables efficient and reliable outbound services to the end-customer|
As we enter the 4th Industrial Revolution, opportunities for suppliers include:
- Internet-based service provider platform for suppliers working in the 'Gig-economy';
- Mentoring network of industry leaders to guide small, medium and micro-enterprises (SMMEs) in sector changes due to digital trends;
- Transnet 'Mega Hubs' to support SMME suppliers;
- Market access to SMMEs through revenue-sharing model; and
- 'Common purpose' technology platforms for SMME collaboration (tools and templates).
As Transnet expands regionally, we will spearhead regional supply-chain opportunities for South African-based SMMEs and expand Transnet’s Enterprise and Supplier Development Strategy to support regional supplier development in countries where we operate.
Enterprise and supplier development (ESD)
- Guided by Government's Competitive Supplier Development Programme
- Informed by the B-BBEE Codes of Good Practice
- Aims to increase the competitiveness, capacity and capability of black-owned suppliers through financial and non-financial support
- Targeted ESD initiatives support localisation and industrialisation, and provide opportunities for black people, youth, women, small businesses, people with disabilities and people living in rural communities
Our integrated Enterprise and Supplier Development Strategy supports the rise of young black entrepreneurs through the various developmental levels – from high-school innovation programmes through business case development and business incubation to our Black Industrialist Programme and our regional and global exporting and trade programmes.
Where we operate
Five Operating Divisions
spread throughout South Africa
Four satellite offices
in Lesotho, Tanzania, Namibia and Swaziland
Three joint operating centres
in Mozambique, Botswana and Zimbabwe
- Outbound services (South African businesses moving products to international markets) and inbound services (bringing products to South African markets)
- Commodities transported: mining exports, general freight and petroleum products
- General freight: containerised cargo, local manganese, minerals, local coal, local iron ore, chrome and ferrochrome, agricultural products, iron and steel, fertilisers, cement, fast-moving consumer goods, bulk liquids, wood and wood products, industrial chemicals, intermediate products and automotive products
- Sub-saharan Africa’s estimated regional growth is 3,4%
- Petroleum products: crude oil, refined petroleum products, aviation turbine fuel and methane-rich gas products
Transnet is transitioning from the Market Demand Strategy (MDS) – first implemented in 2012 – to a new blueprint for growth and diversification, the Transnet 4.0 Strategy (Transnet 4.0).
The MDS has largely achieved its objective of closing the market demand capacity gap for freight logistics infrastructure, with approximately R165,6 billion invested in the previous six years. Transnet 4.0 provides a framework for Transnet's growth and diversification within the context of the 4th Industrial Revolution.
- Extending Transnet’s footprint in Africa, the Middle East and South Asia;
- Product and service innovation; and
- Expanding Transnet’s advanced manufacturing business, with leading technologies to enhance new and existing products, and improve business processes.
- Global growth of 3,9% estimated for 2018, with 4,9% growth forecast for developing and emerging markets.
- Continued strong growth in emerging Asia and Europe, and a modest upswing in commodity exports after three years of weak performance.
- The International Monetary Fund forecasts South Africa’s economy to grow by 1,5% in 2018, an improvement on the 1,3% growth rate of 2017. Business confidence improved following a period of political uncertainty, with the growth rate set to keep improving beyond 2018.
- Sub-saharan Africa’s estimated regional growth is 3,4%.
- Still unclear whether projected improvements in GDP and business confidence will provide sufficient relief from the effects of South Africa’s sovereign credit-rating downgrade in 2017.
- The new presidential dispensation should help buy growth in private consumption and fixed investment. Higher prices for commodities will sustain growth in mining sector.
- The 4th Industrial Revolution ushers in a fusion of technologies poised to disrupt every industry, with major economic and technological ramifications and systemic transformation of civil society, production, governance structures and human identity. Transportation and communication costs are likely to reduce, and logistics and global supply chains will become more effective. The cost of trade is rapidly diminishing to drive new markets and economic growth.
- Transnet’s primary focus remains volume growth of the core business, while seeking new growth paths to compensate for low growth expectations and instability in traditional markets. Organic growth in the current freight transport and handling divisions will account for the bulk of this growth as we improve connectivity, density and capacity of an increasingly integrated port, rail and pipeline network.
- Strategic private sector partnerships in the freight logistics sector will accelerate new business ventures and new revenue growth.
The Company operates in compliance with 200 regulations. Tariffs charged by the National Ports Authority and Pipelines are determined by independent economic regulators, namely the Ports Regulator of South Africa (Ports Regulator) and the National Energy Regulator of South Africa (Nersa) respectively.
The Railway Safety Regulator regulates the safety of the rail operations of the Company, issues safety permits (for a fee), and conducts inspections and audits on the Company. Transnet also operates within a policy context determined by the Department of Public Enterprises and the Department of Transport respectively.
As a SOC, the financial strategy reflects the higher risk profile of the business. To meet long-term market demand, Transnet invests for long-term growth prospects, but considers short- to medium-term volatility in domestic and international markets. Transnet raises funds in the debt markets based on the strength of its financial position, having raised funding without Government guarantees since March 1999.
Funded through reserves and borrowings with no subsidies or guarantees received from Government.
Remain within the medium-term target – Gearing <50% and cash interest cover of >2,5 times.
Legacy Government-guaranteed debt amounts to R3 500 million comprising Eurorand bonds under the Euro Medium-Term Note Programme maturing in 2028 (R2 000 million) and 2029 (R1 500 million) respectively.
Transnet's strategic focus is guided by the Statement of Strategic Intent issued by the Minister of Public Enterprises and the Shareholder’s Compact, which stipulate medium-term strategic objectives, including:
- Reducing the total cost of logistics as a percentage of transportable gross domestic product (GDP);
- Accelerating the modal shift by maximising the role of rail in the national transport task;
- Leveraging the private sector in the provision of both infrastructure and operations where required;
- Integrating South Africa with the region and the rest of the world; and
- Optimising the social and economic impact of all interventions undertaken by the Company in the achievement of these objectives.
Endorsement of external charters and frameworks (not limited to)
Generic Transport Public Sector Charter
United Nations Global Compact (since 2012)
International Integrated <IR> Reporting Framework
Membership of associations (not limited to)
New Partnership for Africa’s Development (Nepad)
South African Railways Association
International Union of Railways
Association of American Railroads
Union of African Railways
Maputo Corridor Logistics Initiatives
International Association of Marine Aids to Navigation and Lighthouse Authorities