THE BULK of Transnet’s R300 billion expenditure on its market demand strategy (MDS) will go towards expanding its general freight business.
Of this, R151bn will be used to grow rail’s freight capacity to meet market volumes from 79.7 million tons last year to 170.2 million tons in 2019 – a 113 percent increase. This includes increased volumes of Eskom coal, containers on rail, domestic iron ore, liquid bulk, manganese and vehicles.
A further R32bn and R25bn will go towards expanding capacity for exported coal and iron ore, respectively.
Transnet group chief executive Brian Molefe said yesterday that the goal was to increase coal exports by 44 percent to 98 million tons a year and iron ore exports by 57 percent to 83 million tons a year over the next seven years.
Among the projects to reach this capacity are the railway from the Waterberg coalfields in Limpopo, the manganese export channel from Sishen through the port of Ngqura near Port Elizabeth, the Sishen to Saldanha line for iron ore and the Maputo coal corridor.
Transnet Port Terminals, which provides cargo-handling services at the seven South African export ports, has committed capital expenditure of R33bn over the next seven years for expansion. Of this, R24bn will be spent to ensure container volumes handled through the ports each year increase from 4.3 million to 7.6 million twenty-foot equivalent unit (TEU) containers.
This would include increasing the capacity of Pier 1 at the Durban container terminal from 700 000 TEUs to a projected 1.2 million TEUs by 2016/17.
Extension of the north quay at the Durban container terminal’s Pier 2 would help increase the capacity from 2.1 million TEUs to 2.5 million TEUs in 2013/14, and to 3.3 million TEUs by 2018.
The strategy “entails an acceleration of our capacity creation programme at all our major terminals, to ensure we are able to grow the economy and make the ports as competitive and efficient as possible,” Transnet Port Terminals chief executive Karl Socikwa said earlier this month.
The new Ngqura container terminal would be expanded to accommodate more containers, from 800 000 TEUs to 2 million TEUs by 2019, to meet the anticipated increase in volumes.
“The MDS has major implications for our division’s responsibility to facilitate unconstrained growth, unlock demand and create world-class port operations through improved efficiencies,” Socikwa said.
Transnet officials allocated 71 percent of the expenditure to expansion projects and the remaining 29 percent to capital sustaining projects.
Investment in the final phases of the new multi-product pipeline, through which liquid fuels are already flowing from Durban to Gauteng, will be about R9bn.
Approximately R7.6bn will be spent on training over the seven-year period, including some R4.6bn on bursaries.
Transnet plans to have 317 technicians in training by 2019 and to have 2 000 apprentices “at all times”.
To promote localisation, R2.9bn has already been spent on local suppliers and R40.5bn has been set aside for future local expenditure.
Some of this will be in the form of procurement opportunities in rural areas where Transnet facilities are located.
Approximately R4.2bn has been allocated to spend on small business promotion.