SARCC Strategic Plan and Budget: 2008/09

1. SARCC Strategic Plan and Budget: 2008/09 Portfolio Committee on Transport “Accelerating the Momentum for Change” 12 March 2008

2. Table of Contents • Introduction • Key Features of SARCC • Strategic Focus of Consolidation • Key Highlights for 2007/08 • Challenges facing Commuter Rail • Turning Rail Passenger Transport Around • Strategic Initiatives • MTEF Allocation and Budget • Conclusion

3. INTRODUCTION • Stabilisation Phase well on course • Visible improvements due to Turn Around Strategy • Public investment in rail on the increase • Well functioning rail passenger transport critical • growing economy • congestion • rising fuel costs

4. Key Features of SARCC • 2 860 km of the rail network (15%) • owns over 470 stations countrywide • Total fleet is 4 638 coaches (409 train sets) • only 3 060 coaches (270 train sets) available • 2.2 million passenger trips per weekday • Five Regions: • South Gauteng (Wits) • Northern Gauteng (Tshwane) • Durban • Eastern Cape (PE & East London) • Western Cape • Book Value of Assets about R8 billion

5. Strategic Focus of Consolidation • Cabinet decision of December 2004 to consolidate passenger rail entities in two phases: • Successful completion of SARCC & Metrorail merger – 1st May 2006 • Shosholoza Meyl transfer to SARCC due on 1st April 2008 • Consolidation process culminates this year in the establishment of an integrated passenger transport company

6. Strategic Focus of Consolidation Cont… • The National Passenger Transport Company will play the following strategic roles: • Provide integrated transport solutions • Be a lever to drive Public Transport Strategic Goals • Integration • Accessibility • Affordability • Safety • Plan, Develop and Invest in Rail Infrastructure • Owning and Managing Rail Assets • Contribute to land use integration

7. Strategic Focus of Consolidation Cont… • The Integrated Passenger Transport Company will provide the following services: • Commuter Rail (Metrorail) will remain at the core of the business • Regional & Long distance rail services (SMeyl) • Property and Station Development • Feeder & distribution services in the form of buses

8. Critical Path • Amendments to Legal Succession Act • Conclusion of Definitive Agreements between SARCC and Transnet on Shosholoza Meyl • Funding and Turn Around Plan for SMeyl • Approval of an Investment Plan for Public Transport

9. Key Highlights for 2007/08 • 415 refurbishedCoaches back into service • Passenger trips: • 12.4% above target • Metro Plus Passenger trips 17% above target • Fare Revenue: 7.6% above target • Punctuality: – (April 07 – January 07): • Average Performance: 86.21% • WC = 91. 63% • Wits= 87.97% • Eastern Cape = 96.96% • Tshwane = 81.26% • Durban = 78.08% • Train Cancellations reduced to less than 2% • Launched the Khayelitsha Express Service and Soweto Business Express

10. Key Highlights for 2007/08Cont… • Customer Satisfaction at 70% • Security: crime related incidents at levels far lower than 2006/07 • incidents at end of January 2008 33% below target for 2007/08. • Roll out of Railway Police: 1 814 deployed in Metrorail Regions • Safety Incidents: • Train Collisions • Derailments • Level Crossing Incidents • BEE: 83% of value of contracts placed were to BEE companies. • Capex Budget: 85% spent – 93% spent on Rolling Stock

11. Key Highlights for 2007/08Cont… • 2010 Projects: • Accelerated the implementation of 2010 Projects • R700m of R1.3bn committed to projects • 12 of the 24 planned contact points completed and operational • Approval Moloto Rail Corridor by Cabinet • first phase, 113 kilometres, Tshwane to Siyabuswa - R8.6bn • Launch of the Kei Rail Service • Completion of technical feasibility for CTIA Rail Link • Bridge City Development – R1.2bn: Construction has commenced

12. Construction of Bridge City Station

13. Key Highlights for 2007/08 Cont.. • Intersite • SAPS Facilities (KwaMashu, DBN, Reunion, Escombe, Gavendish) • High Commands (Park Station, DBN, Tshwane, Germiston, CT) – R45m • Phase 1 for SAPS Contact points Wits (Parkstation, New Canada, Germiston, Springs etc– R40m • Khayelitsha Extension Station 4A completed - R70m • National Station Improvement Programme (40 stations) underway - R50m • Luxury coach terminus in Tshwane - R27m

14. Challenges facing Commuter Rail • Despite visible improvements, commuter rail services remain on a ‘knife edge’ • A major incident in one region could trigger a crisis in the entire system, Tshwane Train Burnings an example • Underlying causes of Poor Performance: • Enormous Infrastructure backlog of over R25bn • Aged Assets (resulting in high failure rate) • Huge Operational Risks (overcrowding & risk of stampede) • Skills shortage

15. Challenges facing Commuter Rail Cont… • Rail System has not responded to spatial developments in the country • Customers continue to travel under difficult conditions • Fare evasion at 8.8% • Stations & Rolling Stock not accessible to people with disabilities • Customer Dissatisfaction remains high

16. SARCC Coach Age Distribution

17. Turning Rail Passenger Transport Around • Strategic approach: • Effecting significant short term improvements • Punctuality • Safety • Cleanliness • Revenue etc • Delivering long term infrastructure to secure rail as backbone of public passenger transport • Laying foundation for future growth e.g. New Generation Rolling Stock

18. Turning Passenger Rail Around Cont… The Turn Around Strategy is divided into three phases: • Stabilisation (2007 – 2010): • securing feasible short term goals by region and corridor • investments intended to make early and material impact • Recovery (2011 – 2014): • building on stabilisation phase • Increase patronage • deploying new rolling stock etc • Growth phase (2015 – 2030): • expanding the rail network significantly

19. MTEF (Incl. S Meyl)

20. Grants, Revenue & Appropriations (incl. SMeyl)

21. RATIOS

22. Key Strategic Initiatives for 2008/09 - SMeyl • Concluding Definitive Agreements with Transnet • Review services offered by Shosholoza Meyl • Determine feasibility of regional services e.g. JHB to Rustenburg, JHB to Maputo • Transfer of key assets e.g. Locomotives & Properties • Amendments to Legal Succession Act • Driving Operational Efficiencies

23. Key Strategic Initiatives for 2008/09 • Significant Improvements in Priority A Corridors as per Rail Plan • Focus investments in these Corridors by improving levels of service • 5 – 10 minutes headway during peak periods • Longer operating hours • Predictable services at 90% availability • Train availability at 96% • Safety and Security • Punctuality at 90%

24. Strategic Initiatives - Accelerated Rolling Stock Programme • The Accelerated Rolling Stock Programme aims are: • To improve reliability, availability & safety of rolling stock • To improve Rolling Stock performance • The programme will deliver 1 900 coaches into the service during this MTEF period (500 – 07/08;700-08/09;700-09/10) • Budgeted R1.5bn for 2008/09 • The Accelerated Rolling Stock Programme will cost R5 billion over the medium term (R1.270bn – 07/08;R1.456bn – 08/09;R2.274bn – 09/10)

25. Strategic Initiatives-Gauteng Nerve Centre • Work will begin to establish a fully integrated Central Train Control Centre for Gauteng – R520m over 3 years • This will include a re-signalling project • 73% of all public transport trips in Gauteng made within the Wits Metrorail area (Southern Gauteng) • Steps for the integration of the Wits and Tshwane Metrorail regions into one have begun

26. Strategic Initiatives - Preventative Maintenance Programme • Increasing level and quality of maintenance • Increased Maintenance & Materials budget by 18% to R707m for 08/09 • Implement project to Upgrade facilities, equipment & skills at Metrorail depots at a cost of R300m over 3 Years

27. Strategic Initiatives – Enhancing Operational Safety • Continuous Improvement of Safety Management System (SMS) – as required by law • Submission of Safety Plan • Retain operating license • Obtain license to operate SMeyl • Review of 2 year implementation plan • Integration of Safety Standards & Quality Management through IMS

28. Strategic Initiatives - 2010 Projects Accelerating implementation of 2010 FIFA World Cup related projects: • Station development and upgrades impacting on the event. • Operational improvements i.e. - crowd control, park and ride facilities at stations and fan parks. • Improve security and telecommunications at various stations. • Refurbishment of SMeyl coaches as well as facilities for the National Mobile Train Unit • Total allocation of R1.3bn by 2010

29. Strategic Initiatives – Skills Devt. • Establishment of an Academy for Technical disciplines (signaling, electrical etc) as well safety critical grades • Leadership Development Programme – R4.6m • Executives • Middle Management • Supervisory Staff • Early Childhood Development – R2m • Training Teachers in 60 centres country wide • Bursary Programme for students at University and Technikons • Establishment of Centre for Transport Studies with UCT – R3m • Learnerships – R10m • Train Operations • Technical Training • Protection Services • Employee Wellness Programme Approved – R9m

30. Strategic Initiatives - Optimising Asset Value • SARCC’s strategy requires Intersite to focus on the development of properties and stations in and around the rail environment • In line with our strategic objective of optimising asset value, the following flagship project have been prioritised- • Cape Town Station Redevelopment • Mabopane Station. • Durban Station. • Park Station • Berea Station • Umgeni Business Park

31. Conclusion Critical Success Factors: • Sustainability of Turn Around Strategy dependent on recapitalisation of the business • Enhanced Operational Efficiencies and Good Corporate Governance • Continued investment in Skills, Operations and Infrastructure • Effective co-ordination in implementation of Public Transport Policy