Transnet shows promising growth

Increased volumes in most major commodities transported by the company over the period drove these results. The company's cost containment initiatives resulted in costs growing by an inflation-beating 5.1% to R11.2 billion and yielding R1.6 billion in savings compared to planned expenditure. These savings were achieved despite higher personnel costs, a 17-day strike and electricity tariffs.

Commenting on the performance, acting group chief executive, Chris Wells, says, "Our Quantum Leap strategy aims at changing the trajectory of performance improvements to higher levels. Pleasingly, this strategy is beginning to produce meaningful results. On rail, both the iron ore and coal lines recorded their best levels during September and are both likely to record strong growth in volumes compared to the previous year."

Ports growth

On the ports side, container volumes showed strong growth to over 2 million TEUs, while automotive volumes grew by 91.3% to 307 177 units, buoyed to some extent by the FIFA Soccer World Cup. Further, productivity, especially gross crane moves per hour (GCH), is showing improvements across the board. The new container terminal at Pier 1 in Durban is now operating at 30 GCH - a 50% improvement of on last year's average of 20 GCH. Durban Container Terminal, where improvements have not been as significant, requires management focus.

Investment continues

Transnet, which has committed to invest R93.4 billion over the next five years - in addition to the R73 billion already invested in the previous five years - continued its investment programme over the six months. Encouragingly for South Africa's future economic growth, it invested R10.2 billion on revamping its infrastructure (from R8.7 billion in the previous period). The company invested R5.5 billion in providing additional capacity and R4.7 billion upgrading existing infrastructure.

Capex update

• Iron ore export channel capacity increase from 47 million tons to 61 million tons on track to be completed by 2012/13
  
• Specific interventions in place to create capacity through improved operational procedures and efficiencies on the coal line. Planned investment of R15,4 billion to increase capacity to 81 million tons by 2014 - subject to take or pay contracts with industry
  
• Locomotive acquisition programme

  • 50 EMD class 39 locos assembled at TRE deployed in the general freight business (GFB) of TFR
    
  • 110 dual voltage class 19E - 6 delivered during the previous financial year, 17 operational on the coal line, 18 undergoing final stages of testing before absorption into operations, 15 more to be delivered in 2011, 47 in 2012 and 13 in 2013
    
  • 44 class 15E - 19 delivered, remainder to be delivered in 2011/12
    
  • 100 locomotives for GFB - contract signed in December 2009, delivery of first 35 in 2012 and remainder in 2013

• Cape Town Container Terminal Expansion to 900 000 TEUs is 68% complete
  
• Durban Container Terminal Reengineering - ongoing
  
• New Multi-Product Pipeline

  • 24 inch trunk line to be completed by September 2011 and ready for operation in December 2011
    
  • Completion of all construction activities, mainly accumulator tanks at the terminals, by December 2013.