Terminal Operation

1. Transnet Port Terminals
DPE Site visit to Ngqura Container Terminal
- Container Strategy, Benchmarking & Viability
06 June 2013
Text

2. PAGE
TABLE OF CONTENTS
TPT CONTAINER STRATEGY
NGQURA CONTAINER TERMINAL VIABILITY
BENCHMARK TERMINAL HANDLING CHARGES
IMPACT OF PRIVATE OPERATOR ON NGQURA
BENCHMARK OPERATIONAL EFFICIENCY

3. TPT CONTAINER STRATEGY
- Southern Hub for World Shipping Routes
The position of South Africa’s ports system enables it to access to South-
South trade, Far East trade, Europe & USA, East & West Africa regional trade
2
Shortest Trade Route between Shanghai and Santos is via South Africa 10,972nm = 21 days @ 21 knots
via Panama Canal12,967nm = 26 days + transit fee
via Suez Canal 13,544nm = 28 days + transit fee
Source: http://www.searates.com/reference/portdistance/

4. 3
COMPLIMENTARY PORT SYSTEM
delivering freight reliably
Bulk – Iron Ore
Containers - Refrigerated
Bulk – Coal & Minerals
Containers - Gateway
Cars – Mercedes Benz
Containers - Transhipment
Bulk – Manganese
3

5. COMPLIMENTARY PORT SYSTEM IN PRACTICE
2009/10 2010/11 2011/12 2012/13 2013/14
People Training NCT
staff in
Durban
Moved
planners to
support
NAVIS
Moved
planners to
support
NAVIS
Moved OLE’s
from PE to
NCT
Equipment OLE Training
Simulator at
NCT
Divert STS
cranes from
CT
Moved RTG’s
from Durban
Ships/Cargo Divert
transhipment
cargo to NCT
Divert
transhipment
cargo to NCT
Divert
transhipment
cargo to NCT
Divert cargo
from Durban
(berths out)
National
Planning
Centre
Commercial CTOC CTOC CTOC CTOC for
port system
CTOC for port
system
4

6. 5
NGQURA ROLE AS A HUB PORT FOR TRANSSHIPMENT
TRAFFIC IS TO ENABLE REGIONAL INTEGRATION
Monrovia
(Liberia)
Lome
(Togo)
Port Louis
(Mauritius)
Toamasina
(Madagascar)
Takoradi
(Ghana)
San Pedro
(Côte d'Ivoire)
Lagos
(Nigeria)
Cotonou
(Benin)
Walvis Bay
(Namibia)
Tema
(Ghana)
Abidjan
(Côte
d'Ivoire)
Cape Town
(SA)
Dar es Salaam
(Tanzania)
Tanga
(Tanzania)
Mombasa
(Kenya)
Nacala
(Mozambique)
Beira
(Mozambique)
Maputo
(Mozambique)
Richards Bay (SA)
Durban (SA)
East London (SA)
Ngqura (SA)
Libreville
(Gabon)
Pointe Noire
Matadi (Congo)
Douala
(Cameroon)
Source: Team analysis
Port Elizabeth (SA)
Lobito
(Angola)
Luanda
(Angola)
1 m
TEU
85,000
230,000
25,000
50,000
20,000
60,000
5
70,000
250,000
80,000
60,000
20,000
20,000
350 th
TEU
100,0000300,000
Other

7. 6
Integration
into the
Supply
Chain
Global
Operations
TPT NEW STRATEGIC DIRECTION
Terminal
Operations
Defending the
Home Turf
Innovative
Value Adding
Services
Expanding the
Horizon

8. 1. GROW AND DEFEND OUR HOME TURF
- Containers, Bulk, Automotives, Break Bulk
Operational
Excellence
(Efficiency,
Safety) &
Customer
Service
B
Develop
and grow
a highly
effective
workforce
D
Innovation
E
7
Grow and
defend
local turf

9. Expand
the
Horizon
2. GLOBAL EXPANSION
- Africa & Beyond
• Support the regional integration
agenda by promoting Ngqura as
Transhipment Hub for Sub Saharan
Africa
• Target the SADC ports (Tanzania,
Mozambique, Namibia & Angola) +
include Kenya and Ghana which
support the 3 main corridors with
Container & Bulk operations
• Follow & Support DBSA/IDC
technical partners for port and rail
opportunities
• Offer Port Consulting and Advisory
Work when needs arises to either
Port & related businesses in Africa
• Promote the sale of our IT system
(GCOS) enterprise 3 to terminals in
Africa and the rest of the world
• Consult on Planning methodologies
for African Ports
Expand into
global
operations
Port Consulting
&
Advisory Services
Regional
Transhipment
Hub for Sub
Saharan Africa
Geographic
expansion of
Container & Bulk
Ops in Sub
Saharan Africa
Training &
Development
through Maritime
Centre of
Excellence
8

10. Expand
into
logistics
services
3. FORWARD AND BACKWARD INTEGRATION
INTO THE TRANSPORT VALUE CHAIN
9
 TPT must expand its active role by forward and backwards integration into the transportation
value chain
 Potential businesses areas to support a fully integrated supply chain solution are:
1) Short Sea Shipping
2) Inland depots/external distribution warehouses (Value Adding Services
- Stuffing & De-stuffing)
3) Container lifecycle management (Pre Trip Inspection, Repairs, Modifications)
4) Cargo support (Stevedoring, Freight Forwarding)
5) Equipment Maintenance (In-sourcing, Outsourcing to other clients/countries)

11. PAGE
TABLE OF CONTENTS
TPT CONTAINER STRATEGY
NGQURA CONTAINER TERMINAL VIABILITY
BENCHMARK TERMINAL HANDLING CHARGES
IMPACT OF PRIVATE OPERATOR ON NGQURA
BENCHMARK OPERATIONAL EFFICIENCY

12. 11
SOURCE: World Bank, Cost of doing business, 2009
1 Current exchange rate based on 1 USD = 7.8 HKD = 85.6 JPY = 31.9 TWD = 7.3 ZAR, 2009 exchange rate 1 EUR = 10.6 ZAR, 1 USD = 7.6 ZAR
- Port and terminal handling costs
USD per export TEU, 2009
COMPARATIVE PORT COSTS
Excluded from study
Included in study
758585
135
165
181190
225
260265
284
316
350350360
400
430
450
600
Saudi
Arabia
ChinaThai-
land
Malay-
sia
Indo-
nesia
Taiwan,
Pro-
vince of
China
BrazilGer-
many
Ne-
ther-
lands
Hong
Kong
South
Africa
ItalyAus-
tralia
BelgiumUnited
Kingdom
United
States
Nami-
bia
Argen-
tina
Cana-
da
Ports Regulator’s Cost benchmarks was not comparing like for like

13. 12
TRANSNET IS A SELF FUNDING, TAX PAYING SYSTEM
SOURCE: World Bank, Cost of doing business, 2009
1 Current exchange rate based on 1 USD = 7.8 HKD = 85.6 JPY = 31.9 TWD = 7.3 ZAR, 2009 exchange rate 1 EUR = 10.6 ZAR, 1 USD = 7.6 ZAR
- Port and terminal handling costs (containers)
USD per export TEU, 2009
758585
135
165
181190
225
260265
284
316
350350360
400
430
450
600
US (Long Beach)
Financially self-
supporting; receives little
operating and capital
grants
South Africa:
Fully self-funding
system, incl. expansion
Belgium:
Receive income
subsidies, mainly from
the Flemish region under
the terms of the Port
Decree
Netherlands:
Recognises operating grants as
income, also receives grants on
investments
Germany:
Pricing based on
depreciated asset base
China:
Significant subsidies
from government, e.g.,
funding Yangshan port
expansion (Shanghai)
(~ 3 bn EUR)

14. TABLE OF CONTENTS
TPT CONTAINER STRATEGY
NGQURA CONTAINER TERMINAL VIABILITY
BENCHMARK TERMINAL HANDLING CHARGES
IMPACT OF PRIVATE OPERATOR ON NGQURA
BENCHMARK OPERATIONAL EFFICIENCY

15. BENCHMARK OPERATIONAL EFFICIENCY
- Moves per Gross Crane Hour
14
Commentary
Over and above previous articles on
benchmarks that have been distributed in
the past (all indicating a benchmark in
the region of 30 + GCH), an interesting
article has emerged on the average GCH
on Maersk Vessels
Study only for Maersk Vessels
internationally – published on 25 Feb
2012:
▪ Average of Top Performers
internationally reflect an average of
32 moves per hour
▪ Lesser performers reflect an average
of 23 moves per hour
▪ TPT Container Terminals currently
reflect GCH targets of between 28
and 32.
▪ Port size, ship size, labour restrictions
and other factors do not fully explain
the differences.
▪ Roger Kerr, CEO New Zealand
Business Roundtable
26
242424
222221
0
5
10
15
20
25
30
Ø 23,3
USA West
Coast
Sri LankaNorth EuropeAustraliaIndonesiaIndiaNew Zealand
272828
323334
42
0
10
20
30
40
50
MalaysiaThailandJapan
Ø 32,0
Singapore South KoreaChina Taiwan
Benchmarking Exercise (2011)
Benchmarking Exercise (2011)
Benchmarking against other terminals
Source: Roger Kerr, New Zealand Business Roundtable – Information from Maersk New Zealand (25 Feb
2011)

16. PAGE
TABLE OF CONTENTS
TPT CONTAINER STRATEGY
NGQURA CONTAINER TERMINAL VIABILITY
BENCHMARK TERMINAL HANDLING CHARGES
IMPACT OF PRIVATE OPERATOR ON NGQURA
BENCHMARK OPERATIONAL EFFICIENCY

17. 16
PRIVATISATION OF NGQURA?
- CONTAINER TRANSHIPMENT HUB

18. Ngqura – Fastest Growing Terminal in the World
• According to Drewry, February year on year figures puts Ngqura as the fastest growing port in the world.
• Ngqura more than doubled its container volumes (up 129% year-on-year) thanks to an upsurge in
transhipment.
17
Source: Drewry report April 2013 (for period ending Feb 2013)
17

19. 18
18
ACCOLADES FOR EASTERN CAPE TERMINALS
- Client Recognition

20. 19
19
Terminal Operator
2011 Total
Throughput
‘000 TEU
2011 Equity
Throughput
(‘000 TEU)
Equity TEU as
% of Regional
Throughput
1 Transnet 4,403 4,403 18.07%
2 APM Terminals 7,640 4,236 17.39%
3 Bolloré Africa Logistics 3,348 1,671 6.86%
4 DP World 2,094 1,193 4.89%
5 Port Said CCHC 922 922 3.79%
6 Damietta CCHC 809 809 3.32%
7 CMA CGM/Terminal Link 1,218 661 2.71%
8 Cosco Pacific 3,247 649 2.67%
9 Hutchison Port Holdings 949 548 2.25%
10 Alexandria CHC 517 506 2.08%
Source: Drewry on Africa
Transnet’s hold on the top ranking for terminal owning/operating companies in Africa will make
them an ideal partnership candidate for bigger, international companies.
TRANSNET REMAINS ATOP AFRICA’S RANKINGS
- Independent study done by University of Illinois

21. NGQURA PRIVATISATION
- IMPACT ON TPT
TPT OPERATED
Part of complimentary port system;
Support SA as a link between SSA and BRICS
countries;
Commitment to job creation, skills, enterprise &
supplier development, etc.;
Historical evidence of lowering cost of doing
business;
Guarantee of providing common user facilities;
Capacity planning are aligned with other
Transnet business units such as TFR.
PRIVATELY OPERATED
Stand alone terminal;
No obligation to BRICS or Africa
development agenda’s;
No allegiance and obligation towards
government’s NGP;
Possible problems related to Transnet
recovering of its investment in NCT;
TFR efficiency not private operator’s
concern.
20

22. NGQURA ARTICLE 79 APPLICATION
- TPT Value Proposition
TPT offers a tried and tested, yet unique, low risk & innovative proposal to operate the NCT
Integrate Ngqura as a
complementary port in the SA
integrated container port
system
Enhance developmental role
for the Port of Ngqura in the
Eastern Cape
Provide non-aligned
independent port
operator status, with an
excellent operations
record
Strengthen the position of
Ngqura as a transhipment
terminal
South-East Asia
1 2
3 4
Fourfold value proposition from TPT

23. TABLE OF CONTENTS
TPT CONTAINER STRATEGY
NGQURA CONTAINER TERMINAL VIABILITY
BENCHMARK TERMINAL HANDLING CHARGES
IMPACT OF PRIVATE OPERATOR ON NGQURA
BENCHMARK OPERATIONAL EFFICIENCY

24. 23
NGQURA VIABILITY
- CONTAINER TRANSHIPMENT HUB STUDY PwC
The outcome of the case studies demonstrate the following:
• Cases show the strong position of Cape Town and Port Louis.
• Case for Durban may be slightly under-represented as Durban is a must port of call.
Its larger call sizes will continue to improve its position.
• Strongest case found for Ngqura is MOL relay Santos/Singapore,
but competition is high limiting upward tariff potential.
• The tariff reduction as applied for MSC effectively strengths the position of NCT on
the Europe trade route (Rotterdam).
• BUT: Increases in call size which go hand in hand with increases in vessel size,
typically on the Asia trade route re-order the attractiveness of the hubs:
• Port Louis shifts from 1st to last,
• Ngqura shifts to 1st position with large vessels and large call sizes, with
differences in TPT ports mainly influenced by handling tariff (see following
slide)
• The lower handling tariff plays a substantial role in shifting Ngqura among
TPT ports to 1st position.
• Shipping lines control the bigger vessels as well as the bigger call sizes
through transhipment volumes.

25. 24
NGQURA VS PORT LOUIS
- CONTAINER TRANSHIPMENT HUB STUDY PwC
Unit Cost of Santos-NCT Sea leg
Port calling cost at NCT - Arrive
Transhipment cost in NCT per TEU
Port calling cost at NCT - Depart
Unit Cost of NCT-Shanghai Sea leg
Total cost per 20ft (ZAR) with MSC LUCIANA (11,660 TEU)
Total cost per 20ft (ZAR) with MSC LUCY (8,089 TEU)
Example:
Singapore – Walvis Bay
Example of increase in ship size on Asia-leg

26. 25
357
261
297
2012/13
1006
223
344
2022/23
NGQURA PRIVATISATION
- IMPACT ON TPT
267
1979
1074
2012/13
423
3792
1469
2022/23
NCT
DCT
Other
NCT Growth in Transhipment 2012/13 to 2022/23
- in thousands of TEU’s
DCT Growth in Import/Export 2012/13 to 2022/23
- in thousands of TEU’s

27. 26
NGQURA VALUE PROPOSITION
- Baseline Scenario over 20 years
Volume – 27.8 Mill TEUs
PV Revenue – R5.45 bil
PV Cost – R8.22 bil
IRR – 10.24%
NPV – (R200,156,002)
Payback – 20 yrs
Volume – 31.1 Mill TEUs
PV Revenue – R5.7 bil
PV Cost – R8.34 bil
IRR – 14.12%
NPV – (R92,788,585)
Payback – 19yrs
Volume – 33.9 Mill TEUs
PV Revenue – R5.8 bil
PV Cost – R8.3 bil
IRR – 16.0%
NPV – (R15,895,947)
Payback – 19yrs
Base Case
Base Case with
TPT budget
Base Case with
TPT budget and
new service