Presentation to Portfolio Committee on Transport

1. Presentation to Portfolio Committee on Transport Director General: Transport 08 June 2011

2. Background • The country has acknowledged the disproportionate nature of traffic between roads and rail with regards to both passengers and freight which has contributed to the massive decline and serious damage to our roads before their expected life span • Underinvestment in rail over the years has exerted a massive burden on our roads resulting in unprecedented levels of congestion in our cities • The rail, ports and aviation sectors have also been victims of underinvestment and underdevelopment over the past three decades which has led to massive infrastructure backlogs in all these areas, particularly in rail • National fiscus is overstretched, unable to comprehensively fund Transport Infrastructure projects. Social spending remains a major priority for our Government.

3. Background • The National Transport Master Plan(NATMAP) seeks to develop dynamic, long term multi modal transportation systems framework for the development of network infrastructure facilities • It envisages a scenario where by 2050, transport in South Africa will meet the needs of freight and passenger customers for accessible, affordable, safe, frequent, high quality, reliable, efficient and seamless transport operations and infrastructure • It will do so by continuously upgrading infrastructure and services ahead of demand, as well as in an innovative, flexible, economically and environmentally sustainable manner

4. Background • Outcome 6 of the Minister’s delivery agreement, “An Efficient, Competitive and Responsive Economic Infrastructure Network” • Further, in Outcome 6, the delivery agreement lists certain outputs for its successful delivery • Output 3, in particular, deals with ensuring the maintenance and strategic expansion of our road and rail network and the operational efficiency, capacity and competitiveness of our sea ports • Outcome 3 acknowledges significant backlog in infrastructure funding and underinvestment in infrastructure over the past three decades. The same outcome places emphasis on the needs to secure adequate funding for infrastructure projects

5. Investor Conference • Investor Conference, an attempt to respond to the Infrastructure challenges faced by the country, Transport sector in general and our Department in particular • Investor Conference, an attempt to assist the Minister to meet the commitments of His delivery agreement • Aimed at assisting the Department to meet its long term infrastructure plans • Finally, it is an attempt to respond to the funding challenges faced by both our government and country.

6. Objectives • To identify and package all potential projects desirous of investments in the Transport space • To showcase and present different Transport projects that are critical to the delivery of Transport Infrastructure objectives • To identify and attract the right calibre of investors for all identified projects • To allow for an interaction between investors and Government on all the proposed projects, currently and in the future • To test the Investor community eagerness to invest in our Transport projects and getting initial commitments where possible

7. Theme “Creating Winning Partnerships Through Investments”

8. Conference Details • To be hosted from the 13th – 14th of June 2011 at the Cape Town International Convention Centre • Hon President expected to open the conference • 600 participants expected drawn from domestic and foreign investors, especially Fund Managers, Asset Managers, Merchant Banks, Service Providers, International Companies and so forth. • Companies expected to Exhibit throughout the conference, exhibition space made available

9. Preparatory Work • Preparations through a joint structure with DTI, DPE, National Treasury, Economic Planning, DBSA and STB Bank • Took an all inclusive approach, focused on bringing projects from our Provinces and the Metros and thus making it a Transport wide conference as opposed to a DOT conference • Transnet engaged as a partner of the DOT • Projects drawn from all our modes, especially through our Agencies, various Units of the Department, our Provinces and some of our strategic partners, for instance Transnet • Sponsorships secured from our Agencies and some of our government Development Finance Institutions(DFIs) and private companies

10. Preparatory Work • Infrastructure Ministers invited to participate • Hon Minister Gigaba • Hon Minister Patel • Hon Minister Davis • CEOs of Transport Agencies to do presentations about their different modes • There will be a panel comprised of people from the private sector, sharing their experiences about investing in South Africa, as well as looking at funding models • A televised live discussion with all relevant Ministers will be held on the morning of the 14th • The Hon Minister of Finance will be invited to address the gala dinner

11. Criteria for Projects • Technical feasibility done • Financial feasibility done • Environmental Impact Assessment • Cabinet Approval or Provincial Cabinet Approval of Board Approval • Size of the Project • Complexity of the Project

12. Proposed Projects Projects at varying stages, some at bankable stage already • 5 projects in Rail • 5 projects in Roads • 1 Aviation project • 2 provincial projects ( E Cape/ Gauteng) • 6 Transnet projects These are A grade projects. There are also B grade projects that will still be presented at conference

13. Key Policy Considerations • Mechanism of handling Infrastructure Investments into the future • Mechanism to be established to process all proposed projects and potential investors • Institutional mechanism to be established to support this work • Consolidation of the work done by the DOT Agencies, the Department and the Transport fraternity in general

14. Issues from Consultations • Avoid duplication with Entities • Clarify investment process • Proper linkage with National Treasury • Consolidate Investments from the Transport Fraternity and create a single channel • Consistency in our approach • Clarity/ Policy on funding models involving the participation of the private sector

15. The End Thank You