Presentation to the Portfolio Committee on Public Enterprises:

1. Presentation to the Portfolio Committee on Public Enterprises: Progress on Job Creation and Skills Development Second Term: 28 June 2011

2. PROGRESS ON JOB CREATION AND SKILLS DEVELOPMENT • The purpose of this presentation is to report on the Transnet progress against targets as per the initiatives as indicated below: • Job Creation; • Skills Delivery; • Skills Development; and • Employment Equity

3. THE SKILLS STRATEGY Capacity Building • Increase on the delivery of artisans; • Pursue funding opportunities to upgrade training facilities; • Sponsor HET initiatives to ensure continuous development of Engineers; • Allocate full-time bursaries to Engineering Students • Support Engineering Technicians by providing vocational work opportunities; • Afford opportunities for gaining workplace experience through various Graduate-in-Training programs; • International partnerships to develop and deliver on sector-specific skills; and • Alignment with quality assurance bodies for vocational disciplines at national level. A Competent Workforce Build and maintain feeder pipelines to grow internal and national skills base; Implement high quality, business aligned training for priority and critical skills; Fill vacancies quickly and with the right people; Align skills planning to attraction and retention of key skills Strengthen supervisory, management and leadership capability; Develop and maintain succession and talent pools aligned to transformational objectives; and Build strong and competent HR business partners. through Talent Management • Ensure succession plans for key positions in management categories; • Ensure business continuity through retention strategy; and • Conduct talent forums to create talent pools. Leadership Development • Deliver on customised leadership development programs from executive leaders to emergent leaders; and • Build capacity on FLM/Coordination levels through the introduction of appropriate development programs.

4. JOB CREATION

5. JOB CREATION INITIATIVES: DIRECT JOBS • Direct job creation initiatives are focused on: • Creation of new positions as per OD requirements; • Establishment of operator pools to assist in the terminal operations; • Filling of vacancies through a robust recruitment plan per Operating Division; • Establishment of skills pools to address co-ordination and supervisory skills; • Appointment of critical skills; and • Appointments through trainee programs.

6. HEADCOUNT PROJECTIONS Actual Permanent Actual Contractor • Headcount includes both permanent and contractors. • Over the 5 years a total of 5,395 permanent employees will be added to Transnet headcount • to support the increase in activities as reflected in the plans. • The increase in the employees contributes to the job creation objective contained in the NGP.

7. NEW APPOINTMENTS: APRIL – MAY 2011 The table below depicts a summary of the appointments per Operating Division for the past two months. This resulted in an increase of total workforce to 56 208 in May 2011. The majority of the appointments were from the Trainee and Artisan categories: • Trainees - 37.8% of total new employees predominantly in TFR and TRE • Artisans - 11.4% of total new employees • TRE recruited 56 Trainees from the SANDF • The objective is to employ + 200 • Although 797 were appointed, the real growth in permanent employees is adversely impacted by employee turnover In order to support Transnet and NGP growth for 2011/12, Transnet plans to increase permanent jobs from actual March 2011 47,763 to 51,894 projection for 2011/12.

8. JOB CREATION • YTD estimates are annualised [1] The 1st column represents the impact for the 2010/11 year, while the second reflects the planned outputs for 2011/12. The jobs created figures include existing jobs and new jobs. [2] Direct and Indirect Jobs for Transnet Opex plus Capex minus Transnet Employees.

9. DELIVERY OF SKILLS

10. Technical and functional skills training accounts for 76% of all training undertaken by Transnet

11. SKILLS DELIVERY: TRAINING CENTRE THROUGHPUT • Current functional training and planned intakes of the various schools are as follows: • School of Port Terminals currently have no dedicated training facilities, with the majority of training being delivered in the workplace, but anticipate increasing delivery by 48% over the next 5 years. • * School of Rail Engineering excludes Apprentice training that will maintain an average of 2,600 learners in the system, and will accelerate outputs by the year 2014 when the first group of additional 1,000 learners complete their qualification.

12. DELIVERY OF SKILLS IN TRANSNET • Transnet currently has six training schools delivering technical and operational training as follows: School of Ports TNPA School of Port Terminals TPT School of Rail TFR School of Pipelines TPL School of Leadership Development School of Engineering TRE • 1 Campus in Durban • Port authority training e.g: • Marine Pilot • Tug-master • Vessel Traffic services • Marine Global Best Practice • 1 Campus in Durban • Port operations training e.g: • Operators of Lifting Equipment • Cargo Coordination • Drivers • 8 Campuses Nationally spread • Rail operations training e.g: • Train Drivers • Train Control • Yard operations • 1 Campus in Durban • Pipeline operations training e.g: • Pipeline Controllers, Coordinators and Planners • Virtual school operating from Transnet Corporate Centre • Co-ordination and governance of first line, supervisory and leadership development • 19 Campuses Nationally Spread • Custodian for Artisan training for Transnet • Technical rail engineering training e.g: • Artisans • Trade Hands • Process Workers The current average utilisation of the training schools is 66%

13. SKILLS DELIVERY – REQUIREMENT TO UPGRADE TRAINING FACILITIES • Training facilities need to be upgraded to improve the quality of training delivery and increase the intake of learners. The total requirement amounts to R 424m and is distributed per Operating Division as follows: • Port Terminals – R 50m; • Ports – R 38m; • Rail – R 197m; and • Rail Engineering – R 139m. • The funding will be utilised as follows: • Creation of a pool of operators that is continuously available to terminals to increase productivity, and in turn increase of port traffic in South African and the resultant increase in jobs; • An increase of 1,000 apprentices in 2012 and maintaining an average capacity of 2,600 learners in the system; and • Accelerate the delivery of training of staff in train movement, yards, train control, operational and professional support.

14. SKILLS DEVELOPMENT

15. SKILLS DEVELOPMENT TARGETS

16. PARTNERSHIP WITH OTHER STATE OWNED ENTERPRISES • Transnet participates in the DPE Skills Development Forum. This forum engages on skills development matters related to all SOEs such as: • coordination and participation of SOEs in the Technical Skills Business Partnership; • participation in the Human Resource Development Technical Working Group; • coordination of sourcing funding from the National Skills Fund; • sharing of training facilities in future; and • sharing of relevant information. • Transnet has conducted benchmarking exercises with SASOL, ESKOM and TELKOM in relation to commonalities regarding bursary schemes, study aids, tuition, allowances, student ratios and good practice.

17. EMPLOYMENT EQUITY

18. 0 0 EMPLOYMENT EQUITY – UPDATE The Transnet Employment Equity progress against targets are depicted below: Black Employees Target 2013 75% Female Employees Target 2013 25% Employees with Disabilities Target 2013 1.3%

19. EMPLOYMENT EQUITY – PEOPLE WITH DISABILITIES • The Transnet target of 1.3% was set to ensure that a significant shift is made from the current actual achievement of 0,8%.  • To enable this shift, the following interventions are in process: • Employee and Line Management engagement strategies to develop understanding of the meaning of Disability and create an environment that supports People with Disabilities; • Employees are encouraged to disclose their disabilities and where necessary provide  reasonable accommodation to employees who require it; • Identifying positions within the organization that can be allocated to employees with  disabilities; and • Accessibility audits to make the physical environment more accessible and accommodate disabilities.

20. OVERVIEW: WORKFORCE PROFILE PER AGE AND RACE Transnet Workforce Profile by age and race category • Average age of Transnet employee is 43 years • Approximately 6500 employees are above 55 years of age. The majority of these employees are semi skilled and general workers (approximately 75%) • Focused employment equity initiatives has resulted in a change in the workforce profile with young employees and new recruits being more African 19

21. MITIGATING RISKS GOING FORWARD

22. THANK YOU

23. BACK – UP SLIDES

24. CURRENT WORKFORCE PROFILE PER GRADE LEVEL Transnet workforce profile by grade and level • The low number of co-ordination and specialist skills (G and H levels) and high number of lower end skills (J, K and L) result in poor spans of control and poor discipline • High demand on limited specialist skills contribute to high overtime spend and poor safety 23

25. A B C D E F G H I J K L WORKFORCE AND SKILLS PROFILE: CURRENT AND FUTURE Current employees New employees Future Workforce Profile Current Workforce Profile New recruits will focus on co-ordination and supervisory skills Trainees & learners • First Line Manager, Specialist and Coordination Levels increase (Levels G, H & I) allowing for: • Increased capacity to drive volumes • Improved work hours : reduced overtime and safer work practices • Correct spans of control and better supervision • Career progression opportunities 24

26. ENGINEERING BURSAR PIPELINES The table below depicts the current actual Engineering Bursar pipeline in Transnet. • * Refers to Academic Year • Academic success rate assumptions are: • 86% of students progress to next academic level annually • 10% of students redo academic year • 4% drop out per annum • Academic throughput of 70% over a 5 year period is in line with national benchmark • New Intakes across academic years 25

27. ALLOCATION OF ENGINEERING PIPELINE PER OPERATING DIVISION • Allocation % dependent on business requirements per Organizational Division (OD) • Actual as on 31 March 2011

28. Partnerships with External Institutions 27

29. Partnerships with External Institutions 28

30. Partnerships with External Institutions: Sector - Specific 29

31. Partnerships with External Institutions: Sector Specific 30

32. Partnerships with External Institutions: Sector Specific 31

33. Partnerships with External Institutions: Sector Specific 32

34. Partnerships with External Institutions: Sponsorships 33

35. TRANSNET TRAINING CENTRES Esselenpark TC 6 6 centres centres : Rail operations, : Rail operations, OHTE & substations, OHTE & substations, Mechanical, Mechanical, Perways Perways , Cross , Cross Functional, Signals Polokwane TFR TC ( Incl 4 Functional, 9 TPD, 6 4 Functional, 9 TPD, 6 TFR Esselen Park) EL&P, 1 OHTE, EL&P, 1 OHTE, Saldanha Saldanha functional functional TFR Centres 12 Traction, 7 wagons, 12 Traction, 7 wagons, Migrated to TRE Saldanha Saldanha technical technical Koedoespoort TRE TC TC 7 technical training 7 technical training centres centres Pretoria Nelspruit Port Academy Johannesburg Kimberley Bloemfontein Empangeni Pinetown Durban Bayhead Saldanha East London Uitenhage Salt River Bellville Port Elizabeth Mossel Bay Cape Town Transnet has a nationwide training centre network Richards Bay 34