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

2. Table of Contents 1.Introduction 2.Key Features of SARCC 3.Strategic Focus of Consolidation 4.Key Highlights for 2007/08 5.Challenges facing Commuter Rail 6.Turning Rail Passenger Transport Around 7.Strategic Initiatives 8.MTEF Allocation and Budget 9.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: 1.South Gauteng (Wits) 2.Northern Gauteng (Tshwane) 3.Durban 4.Eastern Cape (PE & East London) 5.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 – 1 st May 2006 –Shosholoza Meyl transfer to SARCC due on 1 st 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 refurbished Coaches 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 2007/08 Cont… 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 2007/08 Cont… 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: 1.Station development and upgrades impacting on the event. 2.Operational improvements i.e. - crowd control, park and ride facilities at stations and fan parks. 3.Improve security and telecommunications at various stations. 4.Refurbishment of SMeyl coaches as well as facilities for the National Mobile Train Unit 5.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- 1.Cape Town Station Redevelopment 2.Mabopane Station. 3.Durban Station. 4.Park Station 5.Berea Station 6.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