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Mr Chris Wells Acting Group Chief Executive 17 June 2009

TRANSNET PRESENTATION TO PORTFOLIO COMMITTEE OF PUBLIC ENTERPRISES BRIEFING BY STATE OWNED ENTERPRISES ON BUDGETS AND STRATEGIC PLANS 2009/10. Mr Chris Wells Acting Group Chief Executive 17 June 2009 . CONTENT OF THE PRESENTATION. Introduction Overview – Achievements

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Mr Chris Wells Acting Group Chief Executive 17 June 2009

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  1. TRANSNET PRESENTATION TO PORTFOLIO COMMITTEE OF PUBLIC ENTERPRISESBRIEFING BY STATE OWNED ENTERPRISES ON BUDGETS AND STRATEGIC PLANS 2009/10 Mr Chris Wells Acting Group Chief Executive 17 June 2009

  2. CONTENT OF THE PRESENTATION • Introduction • Overview – Achievements • Changes in Economic Environment • Transnet Strategy • Regulatory Environment • 2009/10 Corporate Plan • Risks and Mitigating Plans • Conclusion - Strategic Priorities 2009/10 1

  3. INTRODUCTION Shareholder Mandate • Transnet’s key role is to assist in lowering the cost of doing business in South • Africa and enabling economic growth through providing appropriate ports, rail • and pipeline infrastructure and operations in a cost effective and efficient • manner and within acceptable benchmark standards • Transnet is self-funded and does not receive subsidies from the State. • Transnet is a focused freight transport company, delivering integrated, efficient, safe, reliable and cost-effective services to promote economic growth in South Africa • This is to be achieved through increasing our market share, improving productivity and profitability and by providing appropriate capacity to our customers ahead of demand Vision and Mission Values • We would like our customers: • to prefer us because we are reliable, trustworthy, responsive and safe; • and because: • our employees are committed, safety conscious, accountable, ethical, • disciplined and results orientated 2

  4. TRANSNET STRUCTURE • Luxrail • arivia.kom * 3

  5. KEY STATISTICS • Port Infrastructure • 9 Commercial Ports • 19 container berths • 3 automotive terminals • 26 dry bulk berths • 39 break bulk berths • 13 liquid bulk berths • Current Volumes (TNPA) – • Containers: 3.8 m TEUs • Dry bulk: 122 mtpa • Auto: 527 000 units • Liquid: 49 mtpa • Break Bulk: 7.5 mtpa • Pipeline Infrastructure • Crude line: 580 km • Design Cap = 6,8 bill. l/a • Current Cap = 5,8 bill.l/a • Refined line:725 km • Design cap = 3,5 bill. l/a • Current cap = 4,3 bill. l/a • Avtur: 94 km • Design cap = 1,2 bill. l/a • Current cap = 1,1 bill. l/a • Rail Infrastructure • 30 000 km of track • 22 300 route km • Network Electrification: • 50kV AC (861km), • 25 kV AC (2309km) • 3kV DC (4935km) • Axle loading: • Main lines at 22t / axle • Coal and ore lines 30t / axle (coal line operates at 26 ton) • Current Volumes – • GFB: 78mt • Coal: 62mt • Iron Ore: 37mt

  6. CONTENT OF THE PRESENTATION • Introduction • Overview – Achievements • Changes in Economic Environment • Transnet Strategy • Regulatory Environment • 2009/10 Corporate Plan • Risks and Mitigating Plans • Conclusion - Strategic Priorities 2009/10 5

  7. % CAGR Revenue EBITDA Gearing (%) TRANSNET HAS EFFECTED A SUCCESSFUL FINANCIAL TURNAROUND OVER THE PAST FIVE YEARS R billion +7% • Continuous increase in revenue showing results of • initiatives to grow the business, with revenue • increasing from R25.3bn in 2004/05 to R30.1bn in • 2007/08 (19.0% increase) – 2008/09 in process of • being finalised Budget 04/05 05/06 06/07 07/08 08/09 • Improvements through: • Operational efficiency improvements, effective cost cutting initiatives mainly due to reengineering projects • Sale of discontinuing non-core businesses • Improvement from R7.3bn in 2004/05 to R12.8bn in 2007/08 (75.3% improvement) +13% Budget 04/05 05/06 06/07 07/08 08/09 • Balance sheet restructuring and cost effective debt structures yielding positive results with consistent below target gearing from 61% in 2004/05 to 30% in 2007/08 (50.8% improvement) • This enables Transnet to fund capital investments more cost effectively and without government guarantees -11% 50% Max 61% Budget 46% 39% 39% 30% 04/05 05/06 06/07 07/08 08/09 6

  8. % SIGNIFICANT IMPROVEMENT IN OPERATIONAL EFFICIENCIES 04/05 04/05 04/05 04/05 08/09 08/09 08/09 08/09 Key Performance Indicators Rail Net Ton Kilometre per Wagon (GFB ‘000) Net Ton Kilometre per Loco (GFB ‘000) Weighted Loco Availability (GFB, Coal and Ore - %) Improvement in asset utilization releasing the pressure on rolling stock requirements. +7% +3% +15% 88% 82% 04/05 08/09 04/05 08/09 04/05 08/09 Ports Moves per Crane Hour (No. of moves) Containers per Berth (No.) Sweating the Port assets to create additional capacity and alleviate pressure on investment +26% 189,989 150,261 04/05 08/09 04/05 08/09 DCT CTCT PE Pipe-lines Capacity Utilisation (%) Production Interruptions (Internal & External - Hours) Operational improvements and introduction of Drag Reducing Agents allow TPL to exceed design capacities for Refined products -22% 965 755 04/05 08/09 06/07 08/09 Refined Crude Avtur * Net ton kilometer excluding the weight of the wagon

  9. CONTENT OF THE PRESENTATION • Introduction • Overview – Achievements • Changes in Economic Environment • Transnet Strategy • Regulatory Environment • 2009/10 Corporate Plan • Risks and Mitigating Plans • Conclusion - Strategic Priorities 2009/10 8

  10. 2008/09 Budget 2009/10 Q1 Q2 Q3 Q4 KEY MESSAGES: CHANGES IN ECONOMIC ENVIRONMENT GDP (%) 2008/09 The financial crisis sparked the worst worldwide recession since the Great Depression. • Expectations of a quick resolution to the credit crisis have not been realised • The IMF has revised its global GDP 2009 forecast to 0.5%, from 2.2% in November 2008 08/09 CP = 4% 5.0% 0.2% -1.8% -6.4% The global recession cause both commodity prices and inflation to ease further on the back of weak demand • Commodity prices have fallen sharply since September 2008. • Oil has fallen more than 60% from its peak and is forecast to increase to an average of $60 -$70/barrel in 2009. • Iron Ore price had declined by almost 70% before recovering slightly. • Thermal coal price has fallen by more than 50% since July 2008 Baltic Dry Bulk Index $000/Tonne 11.5 11.5 11.6 11.4 Week 8 Week 9 Week 10 Week 11 International trade is projected to decelerate sharply, with global trade volumes falling by 2.8% in 2009. • The Baltic Dry Index has fallen over 90% in the past 6 months • Drewry forecasts container growth of only 2.8% in 2009 • Container volumes through US ports have been negative for 17 consecutive months • Lower ocean freight rates benefit SA GFB Volumes (mt) -9% -20% Q2 Q3 Q4 Containers (000TEUs) Transnet’s short term focus will shift towards sustaining the business • Transnet is well equipped to weather the storm • The growth strategy will continue to provide the strategic framework • The timing of the implementation of the growth strategy will be delayed as a result of revisions to volume forecasts • The short term focus is on protecting volumes and preserving cash +4% -14% Q2 Q3 Q4 9

  11. CONTENT OF THE PRESENTATION • Introduction • Overview – Achievements • Changes in Economic Environment • Transnet Strategy • Regulatory Environment • 2009/10 Corporate Plan • Risks and Mitigating Plans • Conclusion - Strategic Priorities 2009/10 10

  12. 6.5 • 4 • 2 • 3 • 1 GROWTH STRATEGY: THE NEXT HORIZON OF THE TRANSFORMATION PROCESS Transformation horizon • Three turnaround horizons • Grow Integration: • Accelerated rollout of operational improvements • Integrated business model • End-to-end corridor view • Integrated customer view • Achieve world class performance • Optimise • Stabilise Interactions: • Leveraging benefits of an intermodal business • Effective commercial management of the network business • Operational and functional teams jointly optimise their interaction areas • Individual programme focus: • Getting the basics right • Stabilising operations • Four-point turnaround strategy • Four-point growth strategy • 2005 • 2007/2008 • 2010 • Corporate governance and risk • Balance sheet restructuring Growth through : Reengi-neering – integration, productivity and efficiency Capital optimisa-tion and financial manage-ment Safety, risk and effective governance Human capital execution • Redirect and re-engineer • Human capital development Positioning the Company for growth in the future 11

  13. TRANSNET’S GROWTH STRATEGY Client orientated planning and execution through integrated commercial management Growth through Governance and performance management Re-engineering, integration, productivity and efficiency Capital optimisation and financial management Safety, risk and effective governance Human capital execution • Financial strength and sustainability • Enterprise wide performance management linked to benchmarked operating KPIs • Risk and safety management • Transnet culture charter • Focusing on 5 key corridors, providing end-to-end logistics services to customers • Focus on key commodities • Productivity and efficiency improvements Investment plans • Replacement and expansion of existing infrastructure to support growth • Integrated investments of R80bn across rail, ports and pipelines • Maintenance of core asset base • Disposal of non-core properties (e.g. hostels/houses) 12

  14. GOVERNANCE – MEDIA REPORTS • Article attempted to conflate two different issues both apparently the subject of leaks from employees with their own agendas • Succession • Totally incorrect and without foundation • Capital Projects Report has neither served at Board or provoked discussion at prior Board meetings therefore has of course no bearing on succession discussion • Acting CEO, Chris Wells informed Board in January 2009 that he was not available to be appointed as CEO. This also is in Public Domain. • Board united on process. • Capital Project Internal Audit Report • Alleged evidence of financial mismanagement • Transnet Internal Audit outsourced to Ernst & young • Strong control environment in line with best international practice • Audit report in question was the result of a normal audit and evidence of proactive and very thorough governance processes • Senior Ernst & Young partner responsible issued press release saying that issues are “not material” and are part of normal process. • Normal forensics in place to find source of leaks as this was a breach of Transnet’s ethics and employment contract and sought to bring harm to Transnet • Other • Transnet has an independent tip-offs line for any anonymous reports of alleged corruption or malpractice. 13

  15. STRATEGY IMPLEMENTATION THROUGH CORRIDOR APPROACH Benefits of corridor approach NOC Procurement • Transnet as a network business needs to operate in an integrated manner throughout the logistics corridor • Provide a common transformation and long-term planning backbone • Maximise growth opportunities across all operating divisions (rail, port, pipeline) • Capture operational and functional synergies across operating divisions through integrated solutions • Improve efficiency and effectiveness of logistics supply chain • Providing an end-to-end logistics service to customers • Provide optimal capital base for network infrastructure evolution • Focus on key commodities and aligning capital investment to high-growth potential corridors Maintenance Functions Yards Projects Sentrarand Yard Kaserne Depot Corridors Newcastle Example Port Danskraal Durban DCT Beit Bridge Messina Louis Trichardt Soekmekaar Ellisras Thabazimbi Pietersburg Drummondlea Vaalwater Chroomvallei Phalaborwa Zebediela Hoedspruit Naboomspruit Middelwit Nylstroom Steelpoort Northam Graskop Marble Hall Roossenekal Rustenburg Plaston Cullinan Komatipoort Witbank Belfast Mafikeng Pretoria Rayton Ogies Machadodorp Krugersdorp Lichtenburg Baberton O/fontein Welgedag Sentrarand Welverdiend Coligny J’burg Hawerklip Breyten B/plaas Vermaas Bethal Lothair Potchestroom Ottosdal Orkney Klerksdorp Wolwehoek Standerton Hotazel Schweizer-Reneke Vierfontein Makwassie Pudimoe Charlestown Ancona Newcastle Vrede Westleigh Erts Golela Utrecht Kroonstad Hlobane Warden Sishen Manganore Naroegas Warrenton Vryheid Arlington Whites Nakop Glen H Palingpan Postmasburg Glencoe Harrismith Virginia Upington Bultfontein Bethlehem Theunisen Ladysmith Kimberley Marquard Kakamas Winburg Bergville Empangeni Nkwalini Douglas Eshowe Bloemfontein Kranskop Richards Bay Moorleigh Ladybrand Sannaspos Koffiefontein Greytown Maseru Belmont Prieska Howick Stanger Hilton Network Copperton Underberg Richmond Donnybrook Mid Ilovo Springfontein Durban Mandonela Matatiele Bethulie Franklin Kelso De Aar Aliwal North Kokstad Harding Simuma Sakrivier Port Shepstone Bitterfontein Dreunberg Barkley East Jamestown Noupoort Maclear Kootjieskolk Calvinia Rosmead Schoombee Hutchinson Hofmeyer Umtata Queenstown Tarkastad Qamata Beaufort West Seymour Klawer Somerset East Amabele Cookhouse Blaney Klipplaat Porterville Fort Beaufort Saldanha East London Prins Alfred Hamlet Touwsrivier Kirkwood Ladysmith Atlantis Calitzdorp Alexandria Worcester Uitenhage Oudtshoorn Patensie Port Alfred George Avontuur Franschhoek Port Elizabeth Riversdale Cape Town Stellenbosch Knysna Mosselbaai Protem Simonstad Strand Bredasdorp 14

  16. KEY OPERATIONAL AND FINANCIAL STRATEGIC INITIATIVES Growth through Growth Strategy Reengineering integration, productivity and efficiency Capital optimi-sation and financial management Safety, risk and effective governance Human capital execution 3 4 1 5 2 Key Focus Areas • Revenue optimisation- Deliver on committed volumes for export coal and iron ore • Domestic coal • Containers on rail Optimise Capex on value creating growth and sustainability Targeted cost reduction including introducing shared services & procurement review Improve key productivities and operational efficiencies Implement funding plan at cost effective rates Financial Value Creation Proactive cash management Gearing to remain <47% and cash interest cover >3 times over 5 year plan Target coal (74mt) and iron ore (60mt) volumes by 2013/14 R80,5 billion Capex spend over five years on key corridors Maintain operating cost increases below revenue increases over the 5 year plan Drive KPI’s to benchmark levels 15

  17. CONTENT OF THE PRESENTATION • Introduction • Overview – Achievements • Changes in Economic Environment • Transnet Strategy • Regulatory Environment • 2009/10 Corporate Plan • Risks and Mitigating Plans • Conclusion - Strategic Priorities 2009/10 16

  18. REGULATORY ENVIRONMENT • The following Acts impact on the operations of the business • National Port Act (2005) – Transnet National Ports Authority responsible for ensuring safety efficient and effective functioning of the ports. Setting of tariffs. • Ports regulatory body appointed • Petroleum Pipelines Act (2003) – to licence petroleum pipelines and storage facilities and to set tariffs • Nersa as regulated body • Port directives/regulations not finalised as yet which makes it difficult to manage and plan future revenues • Pipeline regulations /directives issued but principles inconsistently applied between years • Significant uncertainty on future revenues do not allow for alternative funding options • No policy on funding for capital work in progress Regulation in its current form and application is not conducive for investment in major infrastructure projects.

  19. CONTENT OF THE PRESENTATION • Introduction • Overview – Achievements • Changes in Economic Environment • Transnet Strategy • Regulatory Environment • 2009/10 Corporate Plan • Risks and Mitigating Plans • Conclusion - Strategic Priorities 2009/10 18

  20. SALIENT FEATURES: TRANSNET CORPORATE PLAN 2009/10(as submitted to Shareholder) • Economic recession put Transnet volumes under pressure (-4.7% average growth against 2008/09) and lower volumes specifically in: • General Freight • Containers • Export volumes (excluding iron ore and coal) • Revenue growth 8.8% y-o-y • Cost containment to keep cost increases to 8.4%, notwithstanding sharp increases in input costs such as electricity, fuel and other input costs. • Profitability (EBITDA) of the Group increases by 9.6% y-o-y • The 5 year capital investment program remains on a R80bn level and approximately R21bn to be invested in 2009/10 • Cash from operations will remain a healthy R10.6bn in 2009/10 • Gearing and cash interest cover remain within set limits over the 5 years 19

  21. 0 All numbers reflected as per Corporate Plan KEY COMMODITY VOLUMES AND TARIFF INCREASES: 5 YEAR PLAN Commodity Volumes Average Tariff increases Containers (000 TEUs) 4,059 5.9% 3,710 3,666 • Average tariff increase impacted by underlying product mix (Containers & GFB) • Including negotiated contract tariffs (export coal and iron ore) to: • Increase infrastructure capacity to meet customer demand, and • Service requirements of clients Average 3,315 09/10-13/14 08/09 09/10 10/11 11/12 Export Iron Ore (mtpa) 7.4% Average 09/10-13/14 08/09 09/10 10/11 11/12 Export Coal (mtpa) 9.7% Average 09/10-13/14 08/09 09/10 10/11 11/12 6.3% GFB (mtpa) Average 08/09 09/10 10/11 11/12 09/10-13/14 20

  22. 8 INCOME STATEMENT – CORPORATE PLAN 2009/10 All numbers as per Corporate Plan 33 615 2 682 8.0 (21 569) (11.5) (2 477) 12 046 1.7 205 (17.3) (5 329) (921) 6 717 (10.7) (716) Budget Operating Profit Margin (%) Critical to maintain profitability to be able to fund major component of capex plans through internal funding sources 20,8 19,7 17,1 16,5 15,0 09/10 10/11 11/12 12/13 13/14 21

  23. s EXTERNAL REVENUE CONTRIBUTION BY DIVISION – 5 YEAR VIEW All numbers as per Corporate Plan Specialist Units TPL TRE 6% 1% 8% TPT 14% 53% TFR 33.6 TNPA Budget 22

  24. r OPERATING COST CONTRIBUTION – 5 YEAR VIEW All numbers as per Corporate Plan Materials & Other 30% 21.6 56% Personnel 6% Electricity Fuel Budget • Labour cost increase over 5 year period on average 6% (reduction in numbers 3%) • Electricity cost increases by 158% from 2008/09 to 2013/14 23

  25. 3 BALANCE SHEET All numbers as per Corporate Plan Budget 100 967 8 454 109 421 54 216 12 661 41 555 41 988 13 217 109 421 Must maintain headroom to be able to withstand unforeseen economic circumstances Gearing (%) 50 46,8 46,4 44,6 43,1 39,3 09/10 10/11 11/12 12/13 13/14 24

  26. 4 CASH FLOW : CORPORATE PLAN 2009/10 All numbers as per Corporate Plan * Excluding the redemption of current loans Cash Interest Cover (times) Critical ratio for investors to ensure sufficient cash to service and repay loans 4,4 3,6 3,6 3,3 3,5 3,1 09/10 10/11 11/12 12/13 13/14 25

  27. SALIENT FEATURES OF FIVE YEAR CAPITAL INVESTMENT PLAN • The 5 year capital investment plan approved in the 2008/09 Corporate Plan amounts to R80.5bn • Latest approved 5-Year Investment Plan amounts to R80.5bn. • Projects in plan have been reviewed and re-prioritised as well as rescheduling of cash flows over 5 years to - Remain within the financial parameters - Ensuring that revised customer demands are still met - Capacity is created on time to meet future volume demands • Of the planned Capital Investment of R80.5bn spending will be as follows: • 32% in rolling stock (R25.8bn) • 59% in Infrastructure related projects (R47.5bn) • 9% in Acquisition of machinery & equipment and floating craft (R7.2bn) • The capital expenditure over the next three years of R57.7bn will be funded by borrowings of R28.4bn and cash from operations of R29.3bn. 26

  28. 5 TRANSNET 5 YEAR CAPITAL HISTORICAL SPEND AND INVESTMENT PLAN Average investment per annum 2000/01 – 2004/05 R billion 80.5 2006/07 2007/08 2008/09 Cumulative 3 yr Actual 2009/10 2010/11 2011/12 2012/13 2013/14 5 yr plan Invested cumulatively the last 4 years more than the previous 15 years 27

  29. CAPITAL INVESTMENT: 5-YEAR PLAN R80.5bn 7,718 Annual Capex (Rbn) Capex per Division Expansion Sustaining Sustaining vs Expansion (3 year view) 21,912 19,442 16,336 9,071 8,121 13,331 42% 7,180 9,480 58% 9,439 12,841 11,321 7,718 9,156 3,892 1,762 09/10 10/11 11/12 12/13 13/14 Other R1.2bn TPL R11.1bn Capital spending will be closely monitored during year to ensure that financial metrics are maintained 14% TPT R6.3bn 1% 8% TFR R43.5bn 54% 20% TNPA R16.3bn 3% TRE R2.1bn

  30. All numbers as per Corporate Plan CAPITAL INVESTMENT: PLANNED SPENDING PER CORRIDOR Capex spread over the Country 29

  31. MAJOR EXISTING PROJECT TNPA: DURBAN HARBOUR ENTRANCE CHANNEL WIDENING Overview The Durban Harbour Entrance Channel Widening and Deepening project is essential in enabling the Port of Durban to accommodate larger vessels through its entrance and to improve the safety of navigation. The widening of the entrance to 330m will enable the super post panamax container vessels to enter the port without any constraining factors. Current Status Excavation of the North revetment continues and is progressing well. Armouring of the new north grove and the south breakwater is making good progress. Design of the sand bypass system at A-berth is nearing completion while commissioning of the temporary bypass system is scheduled for June 2009. The project has reached a 60% stage of completion. Investment Criteria Cost Time Quality Local Content Safety Risk 30

  32. MAJOR EXISTING PROJECTS FREIGHT RAIL: ORE LINE EXPANSION TO 47mtpa Overview The aim of the ore line expansion project is to increase the ore carrying capacity on the Sishen to Saldanha corridor from 41mtpa to 47mtpa. The project entails the upgrading of infrastructure and the procurement of rolling stock to enable the increase in the conveyance of the additional tonnages. The Ore Line is an expansion project aimed at increasing capacity for ore exports. A project to further increase capacity to 60mtpa to address client demand has been approved with the feasibility having been completed and the early stage of execution of the project in progress. Current Status New control software to improve reliability of tipplers, conveyors and reclaimers has been successfully implemented. Passing loops are handed over to operations after completion on a continual basis. Various contracts for the power upgrade and material acquisition are underway. The project is 56% complete. Investment Criteria Cost Time Quality Local Content Safety Risk 31

  33. MAJOR EXISTING PROJECTS FREIGHT RAIL: COAL LINE EXPANSION TO 78 mtpa Overview The aim of this project is to increase the coal carrying capacity of the line from the mines in Mpumalanga to the Port of Richards Bay. This is an expansion project and of major economic importance as it affects exports. The expansion of the Coal line entails the upgrade and building of new infrastructure as well as the acquisition of rolling stock. Current Status Rail and power infrastructure work is progressing well and is progressing well. Locomotive upgrades and wagon refurbishments are progressing according to plan. Investment Criteria Cost Time Quality Local Content Safety Risk 32

  34. MAJOR EXISTING PROJECTS TNPA: NGQURA CONTAINER TERMINAL Overview Ngqura Container Terminal is a Greenfield project with the objective of providing a full service container terminal together with rail links to the port. The scope is to develop a 4 berth container terminal and further extending the port infrastructure for a small craft basin, tugs, buildings and other landside infrastructure for the functioning of a container terminal. The project will provide 700 000 TEUs/a capacity when complete. Current Status 30 hectares of paving have been completed behind the first 2 berths while work on the trailer park and admin buildings is progressing well. The terminal handled its first two vessels in September 2008. Transformers for Eskom and cargo handling equipment for Port Terminals were offloaded from these vessels. Investment Criteria Cost Time Quality Local Content Safety Risk 33

  35. MAJOR EXISTING PROJECTS TPL: NEW MULTI-PRODUCT PIPELINE Overview The aim of this project is to build a 550 km new trunk line from Durban to Jameson Park (Gauteng), 24 inch in diameter, addressing the increased demand for fuel in Gauteng and surrounding areas. The trunk line will connect an inland and coastal terminal with significant storage capacity. The existing pipeline is 40 years old and needs replacing. With the front-end engineering design phase completed, Transnet was granted licence to construct the NMPP by NERSA. It also entails the replacement of two northern network pipelines that have outlived their sustainable life. Given the energy problem facing South Africa, the Board has granted unconditional approval to commence construction in February 2008. This project is considered a strategic project for the Company, and is of national importance. Current Status In May 2008 a R3.3 Billion contract was awarded to Spiecapag Group 5, a South African French Consortium for the construction of the NMPP. Favorable Environmental Approvals for the project scope has also been received. Manufacturing for the 16” pipe commenced in April 2008 and all 105 000 tons of steel for the main 24” pipe has arrived in South Africa. As at end March 2009, the first 6 out of a total of 170 km of 16” pipe had been laid in the Kendall/Waltloo area. It is expected that the last phase of this project will be completed at the end of 2011. Investment Criteria Cost Time Quality Local Content Safety Risk

  36. COMPETITIVE SUPPLIER DEVELOPMENT PROGRAMME (CSDP) 1.0 551 • The aim of the Transnet Competitive Supplier Development Programme (CSDP) is to localise Transnet supply chain to a reasonable level and to promote South Africa as an off-shore source of goods and services for Original Equipment Manufacturers (OEM’s). • This will secure source of supply, provide industrialisation opportunities for national businesses and reduce lead times • Initially, the programme is being piloted over three years with rolling stock and port equipment purchases as its focus. The following is the progress to date: 35

  37. All numbers reflected as per Corporate Plan 5-YEAR FUNDING REQUIREMENT PER 2009/10 CORPORATE PLAN * Excluding the redemption of current loans More than 50% of the funding requirements for the 2009/10 financial year has already been raised to date on the strength of Transnet’s balance sheet. 36

  38. TRANSNET FUNDING SOURCES TO TAP INTO • The following funding sources have been initiated. The amounts are indicative & subject to market conditions • Domestic bonds (TN17, TN23 and T27 Bonds)(±R6 bn) Currently tapping R1 bn per month and plan to launch at least 1 new bond & increase the size as liquidity increases • ECA Supported Funding (R2 bn) 1st transaction with Finvera to be concluded by early April 2009. • Development Finance Institutions (R4bn) • JBIC loan agreement signed 26 March –first drawdown mid April 2009 approximately R2 bn and balance (R2bn) in line with project payment dates • AfDB at due diligence stage expected to conclude end May 2009 • Domestic Loans (R7 bn) Rand Bilateral loans from banks(8) and other financial institutions(2) • International Bond (±R5 bn) Close to concluding documentation & update with year-end financials, if not implemented will replace with domestic bonds • Other International Initiatives AFLAC Loan (±R1.5 bn) – legal documentation finalized - still negotiating pricing levels • Commercial Paper Bi-weekly issues of CP varying between R500m and R750m – plan to replace maturities with bonds. • Pipeline Financing Considering a ring-fenced financing structure to align with regulatory environment. Transnet has committed banking facilities in excess of R4 billion that can be utilised when required

  39. CONTENT OF THE PRESENTATION • Introduction • Overview – 2008/09 Preliminary Results • Changes in Economic Environment • Transnet Strategy • Regulatory Environment • 2009/10 Corporate Plan • Risks and Mitigating Plans • Strategic Priorities 2009/10 • Conclusion 38

  40. GROUP’S KEY RISKS (as at May 2009) • Strategic residual risks heat map 1 • Revenue/Volume Growth • Non compliance with Safety and Standard Operating Procedures (SOPs) • Economic Regulation (Ports Regulator and National Energy Regulator of South Africa) • Funding/Liquidity Risk • Delivery of capital projects on time and within budgets and affordability thereof • Asset Performance and Maintenance Regime • Human Resources Capability to deliver on growth strategy • Environmental Risks • Input costs including: Energy (electricity), Fuel, Steel, Pricing & Supply • Commodity & Concentration Risks (Third Party Supplier Risks) 1 2 3 9 2 6 3 10 4 7 5 8 Likelihood Rating 4 5 6 7 Consequence Rating Priority I risk – Transnet Group CE and Board level Priority II risk - Operating Divisions’ CEOs Level Priority III risk - General Managers’ level Priority IV risk – Managers’ level Priority V risk – Employees’ level 8 9 10 Mitigating plans are in place to manage the key risks 39

  41. Performance • Assessment • and Rewards • Strategy • and • Targets • EPM • Creating • Realistic • Budgets • and plans • Performance • interactions • Track and • monitoring Where we are? (measurement) Dynamic Process Corrective measures (action) Where we planned to be? (evaluation) IMPLEMENTED A DYNAMIC MANAGEMENT FRAMEWORK WITHIN EPM OPERATING MODEL Dynamic Management Framework to actively assess performance and plan/reallocate resources to achieve goals Weekly Activity Reporting Focus on weekly trends volume trends, year end estimates and impact analysis on Group Revenue 80% 90% Monthly assessment of performance, success of cost cutting and capex initiatives and updated year end estimates Monthly Performance Assessment 95% 100% Quarterly Performance Assessment Quarterly workshop (Ext. Exco) on year-to-date results, year-end estimates and effectiveness of initiatives 105% Corporate Plan 40

  42. 8% Budget Actual Comments Week 11 Results – Key Commodities Global Bulk Indicators June 2009 Estimate Level 1 Extract of Week 11 Report 2009/10EXECUTIVE SUMMARYWEEKLY ACTIVITY REPORTING Previous year Budget -9,5% Current Estimate -17% +9% 4,1% -3,6% 1.1% 1,37 0.83 66,644 1,41 1,35 61,102 1,24 -1,0% 1.0% 0.69 7.39 6,1 3.72 3.68 5,8 5,1 271 5.89 5.95 268 2.50 251 Export Coal (mt) GFB (mt) Export Iron Ore (mt) Containers (TPT) Containers (000 TEUs) GFB (mt) Export Coal (mt) Export Iron Ore (mt) -49% -34% -3% 872 166,613 369,753 358,376 109,400 447 Current Year Prior Year Liquid Bulk (TNPA) Break Bulk (TPT) Other Bulk (TPT) Analysis of Volume and Revenue Variance - Year end Estimate (2009/10) Revenue contribution to Group Size Iron Ore (TPT) Iron Ore (TNPA) Petroleum Baltic Dry Bulk Index $/Tonne Spot Price $/Tonne Coal Spot Price $/Tonne Iron Ore Iron Ore (TFR) • The Transnet weighted volume variance estimate for 2009/10 is negative 1.4% (estimated 2.5% negative for June 2009). • Group revenue (all commodities) is estimated to be 4.7% below budget for the 2009/10 year, mainly due to limitation on petroleum tariff increases, container volumes and negative price mix, export coal volumes and other bulk commodities. • The Group revenue variance for 2009/10 would only be 2.0% below budget if the impact of TPL’s tariff increases are excluded. GFB Liquid Bulk % Volume Variance Coal (TFR) Coal (TNPA) Containers Other Bulk Automotives Negative 4.7% revenue variance, including TPL tariffs TRANSNET STATUS Gas Negative 2% revenue variance, excluding TPL tariffs -42% -10% -8% -6% -4% -2% 0% 2% 4% 6% 41 % Revenue Variance

  43. CONTENT OF THE PRESENTATION • Introduction • Overview – 2008/09 Preliminary Results • Changes in Economic Environment • Transnet Strategy • Regulatory Environment • 2009/10 Corporate Plan • Risks and Mitigating Plans • Conclusion - Strategic Priorities 2009/10 42

  44. Cost savings • Whilst most divisions have made good progress on committing to cost savings initiatives, we have only managed to obtain plans to substantiate R1bn savings compared to the R1.4bn (level 1) required. • It is essential that the cost structures must be reduced through efficiency improvement and elimination of non-revenue related costs. • The Group minimum requirement remains R1.4bn reduction in costs and operating divisions will be measured monthly against these targets going forward. Capital optimisation • Focusing on the execution of the capex plans with optimal phasing • Committed to investing R80.5bn over the next 5 years • The objective is to reduce the number of incidents and the cost of losses by 33% from 2009/08 actual levels (approximately R200m reduction at Group level). • Environmental compliance has been elevated as a key priority in Transnet and we agreed to perform the following at all main areas of operations: • Review of maintenance and implementation of proper and structured maintenance programmes • Getting housekeeping up to standard and comply with all environmental requirements • To start with a compliance review/audit to identify areas of non-compliance/unsatisfactory standards Safety and environment Operational efficiencies • We will drive to achieve “a world-class” (otherwise known as best-in-breed) operational performance in each key area of operations, in the near future. Accordingly, the KPI project will be driven hard this year with the focus on at least achieving the KPIs set out in the Corporate Plan CONCLUSION - 2009/10 STRATEGIC PRIORITIES Volume and revenue opportunities • Increasing export iron ore volumes by 11.6% above the budget to contractual levels (47.9mt compared to budget of 43mt); • Increasing current throughput in domestic coal to at least achieve the budgeted volumes of 21.5mt; • Containers on rail to increase by 10% above the current budget of 544 460 TEUs to 600 000 TEUs; • To maintain at least the current trends in magnetite and cement volumes which are on average 70% and 20% in excess of budgets respectively. 43

  45. END OF PRESENTATION THANK YOU

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