PUBLIC ENTERPRISES

PROGRAMME - TRANSPORT

ENTERPRISES

2008-2011 STRATEGIC PLAN AND

FINANCIAL OVERVIEW

27-29 FEBRUARY 2008

2Strictly confidential

Sub-Programme

Activity / Project Critical Path Activities Output

Investment Oversight

Corporate Plan (Submitted by Feb 08)

Assess progress with implementation of strategy,Assess alignment of budget with strategyAnnual review of financing and funding plansProposals/Recommendations for corrective measures.

Briefing Memorandum:A critical assessment of the business planLetter to Chairman of Board

Transnet Shareholder Compact

SOE team to drive the process of putting an annual updated compact into place:Review the strategic intent statementReview and benchmarking of SKPI’sApproval of SKPI’s for the Shareholder CompactEnsure signoff from GovernanceSigned Shareholder Compact

Decision Memorandum:Agreed Shareholder Compact

SOE Dashboard: Monitoring of Transnet Performance

Quarterly update of Transnet Dashboard Database

Updated Transnet Dashboard(latest information)

Annual Report Analysis and assessment of annual report Memo to DG and Minister on assessment

Review of Board strength Analyse board strength and make recommendations in respect of new challenges faced by organisation

Memo to DG and Minister

Quarterly Report (Q1) Submission by Transnet of its 2008Q1 Report by Aug 2008

Briefing Memorandum:Critical assessment of performance including major risks

Quarterly Report (Q2) Submission by Transnet of its 2008Q2 Report by Nov 2008

Briefing Memorandum:Critical assessment of performance including major risks

3Strictly confidential

Activity/Project Critical Path Activities Output

Quarterly Report (Q3) Submission by Transnet of its 2008Q3 Report by Feb 2009

Briefing Memorandum:Critical assessment of performance including major risks

Dashboard development Engagement with SOE and development of indicators

Functional Dashboard

Industry Impact

Ports Financial impact of corporatising Transnet National Port Authority (TNPA)

Review Transnet and TNPA financial statements; Prepare scenarios and modelling exercise; Finalize memo

Memo to DG and Minister on financial impact of corporatising TNPA and recommendations to mitigate risk.

Compliance with National Ports Act, 2005

Review validity of Port Regulations vs port limitsPreparations for corporatisation of TNPA (Minister to instruct)Determination of conversion date (in terms of NP Act)

Memos to DG and Minister on - Resolution of port limits issue following legal opinion;- Recommended date for conversion process and corporatisation of TNPA

Ngcura (Coega) PSP Receive transaction proposal from TransnetReach alignment with TransnetEngage DOT and get alignment on transactionMin of Transport to issue public guidelinesNPA to issue RFP in terms of guidelines

Memo to DG and Minister on assessment of Transnet proposalFinal memo to DG and Minister on progress with transaction

Rail Branchlines strategy / position paper

Develop statement of intent for TFR, incorporating branchlinesReceive TFR,s branch line strategy; reach alignment with TFR/ TransnetEngage DOT & NT and get alignment on strategy/approachMonitor execution of strategy by TFR/Transnet

Presentation to DG on TFR branch line strategy; Memo to DG and Minister on branch line strategy and letter to Minister of Transport

Railway Supplier study Develop Terms of Reference for the studyUndertake tendering process Conduct sector studyPrepare final recommendations

TORs signed off by DG ; Memo on tender award approved by bidding committee; Final report and memo to DG and Minister

4Strictly confidential

Activity/Project Critical Path Activities Output

Pipelines Pipeline tariff study Assessment of NMPP revenue and tariff structure

Report on NMPP business case, tariff levels and policy issues

NMPP policy process Interaction with DME , NERSA and Transnet to refine policy and regulation issues

Clear obstacles and address constraints to implementation of

Enterprise Assessment of Transnet’s level of capitalisation

Review Transnet financial statements and corporate planPrepare scenarios and modelling exerciseFinalize memo

Report on Transnet’s income over next 3 years and possible shortfall;Memo to DG and Minister including scenario schedules

Transnet infrastructure sustainability model

Phase two of infrastructure funding studyAssessment of TFR’s future viability and sustainabilityProposal on alternative sustainability model

Phase 2 report and recommendations memo to DG and Minister

NCPM and key freight customer analysis

Undertake customer surveyRefine terms of reference and scope of projectDevelop TOR, Appoint consultant, Develop IT platform and supply chain performance per major national corridor.

Leading to long range transport sector study in 09/10.

Integrated port and rail master plan + cabinet approval

Transnet/DPE to present integrated master plan to Eco cluster depts.Depts. to critically assess and commentRevised master plan tabled and agreed in cluster; cabinet memo to obtain approval to engage provinces, cities and industry stakeholders

Economics cluster buy-in, Submission of memo into cabinet process.

Monitor Transnet Build programme

5Strictly confidential

Activity/Project Critical Path Activities Output

Ad Hoc

Cabinet memoranda – DPE generated and responding to externally generated Cab Memos

Assess and prepare responseDraft cabinet memoInterdepartmental consultations (DPE cab memos)

Memo to Minister and DG on Department comments on external cab memosMemo and cab memo submitted to DG and Minister

Press articles One article per annum Written response to relevant unit (Communications)

Parliamentary questions

PFMA Section 52.2 applications

Assess request and provide response;Participate in project team discussions re recommendationsProvide written inputs to be consolidated into memo to DG and Minister

Written inputs to project leader (LGRS) to be incorporated into final memo to DG and Minister

Referrals from Minister and DG

6Strictly confidential

Sub-Programme/Project :

Aviation (SAA)

Sub-Programme

Activity / Project Critical Path Activities Output

Investment Oversight

Corporate plan review (to be received end of February 2008

Assess progress with implementation of strategy,Assess alignment of budget with strategyAnnual review of financing and funding plansProposals/recommendations for corrective measures.

Briefing Memorandum:A critical assessment of the business plan

SAA Shareholder Compact SOE team to drive the process of putting an annual updated compact into place:Review the strategic intent statementReview and benchmarking of SKPI’sApproval of SKPI’s for the Shareholder CompactEnsure signoff from GovernanceSigned Shareholder Compact

Decision Memorandum:Agreed Shareholder Compact

Annual Report Analysis and assessment of annual report Memo to DG and Minister on assessment, including letter to Chairman of the Board and MoF

Review of Board strength Analyse board strength and make recommendations in respect of new challenges faced by organisation

Memo to DG and Minister

Attend monthly restructuring updates and accounts meetings

Receive presentations, discuss, respond and report as applicable

Decision memos

Quarterly Report (Q1) Submission by SAA of its 2008Q1 Report by Aug 2008 Briefing Memorandum:Critical assessment of performance including major risks

Quarterly Report (Q2) Submission by SAA of its 2008Q2 Report by Nov 2008 Briefing Memorandum:Critical assessment of performance including major risks

Quarterly Report (Q3) Submission by SAA of its 2008Q3 Report by Feb 2009 Briefing Memorandum:Critical assessment of performance including major risks

7Strictly confidential

Activity/Project Critical Path Activities Output

Redesign SAA reporting package Develop, discuss and implement as applicable Redesigned SAA reporting package

SAA dashboard development Monitor development and input information as applicable SAA dashboard

Industry Impact

Long range strategy, ownership, scale of operations and funding alternatives emerging from Seabury process

Research, discuss and develop positionsScale of operations review

Long range aviation strategy

Funding of SAA restructuring package

Agree form of guarantee,Monitoring conditionsAnalyse gap in funding and options and produce supporting memos

SAA has sufficient capital for its needs

Strategic repositioning of SAAT (South African Airways Technical)

Visit of MRO facilities Funding of urgent Capex requirements Establishment as independent entityDevelop and fund restructuring planProperty master plan Provisional identification of SEP (Strategic Equity Partners)

Restructuring planFundingProperty planDecision memo

Resolve Medium Term Fleet requirements and plan

Fleet plan options Decision memo

Aerospace project (JPF) / African aircraft leasing company

Discuss possible options with interested parties Decision memo

Voyager business plan and liability Development of a standalone business plan,Establishment of a standalone business (commercialisation),Corporatization of Voyager and liability mitigation strategies

Decision memo

8Strictly confidential

Activity/Project Critical Path Activities Output

Strategic repositioning of Mango Assess SAA proposals and review fundingDetermine DPE view on positioning and future of Mango Respond to Minister of Finance/National Treasury letter

Decision memoNational Treasury funding request

Strategic reposition of SAA Cargo Assess SAA proposals Review constraints on belly freight cargo DPE view on positioning and future of all freighter operations

Decision memo

SAA ATL Guarantee Annual review of ATL Revised ATL guarantee

SAA bilaterals and code share with Emirates

Review code share agreement Review 2010 proposal Monitor foreign visitor traffic flow PFMA applications

Briefing memoDecision memo on PFMA

Role of SAA in airlift implementation plan

Follow-up on Minister discussions Develop proposals re AirliftInputs to Strategy Strategic Planning Committee (SPC) on BASAs

Briefing memo

Statistical analysis of traffic volume data

Develop framework and ToR Report, recommendationsBriefing memo

Major costs driver review Review of fuel pricing, airport charges, aircraft leasing charges, navigation costs, etc

Report, recommendationsBriefing memo

9Strictly confidential

Sub-Programme/Project :

Aviation (SAX)

Sub-Programme

Activity / Project Critical Path Activities Output

Investment Oversight

Corporate plan review (to be received end of February 2008

Assess progress with implementation of strategy,Assess alignment of budget with strategyAnnual review of financing and funding plansProposals/recommendations for corrective measures.

Briefing Memorandum:A critical assessment of the business plan

SAA Shareholder Compact SOE team to drive the process of putting an annual updated compact into place:Review the strategic intent statementReview and benchmarking of SKPI’sApproval of SKPI’s for the Shareholder CompactEnsure signoff from GovernanceSigned Shareholder Compact

Decision Memorandum:Agreed Shareholder Compact

Annual Report Analysis and assessment of annual report Memo to DG and Minister on assessment, including letter to Chairman of the Board and MoF

Review of Board strength Analyse board strength and make recommendations in respect of new challenges faced by organisation

Memo to DG and Minister

Quarterly Report (Q1) Submission by SAX of its 2008Q1 Report by Aug 2008 Briefing Memorandum:Critical assessment of performance including major risks

Quarterly Report (Q2) Submission by SAX of its 2008Q2 Report by Nov 2008 Briefing Memorandum:Critical assessment of performance including major risks

Quarterly Report (Q3) Submission by SAX of its 2008Q3 Report by Feb 2009 Briefing Memorandum:Critical assessment of performance including major risks

Design SAX reporting package Develop, discuss and implement as applicable Redesigned SAA reporting package

10Strictly confidential

Activity/Project Critical Path Activities Output

SAX dashboard development Monitor development and input information as applicable

SAX dashboard

Industry Impact

Recapitalisation of SAX Obtain pre-approved fundingRestructuring of inter-company account

National Treasury requestDecision memo

Commercial agreement between SAA and SAX SAA & SAX implementation programme for new commercial arrangement

Decision memo

Expansion and Growth plans – Domestic operations – African operations

Consider business plansAssess cooperation agreements with other airlines Demand schedule, aircraft sizing and fleet plan requirements

Briefing memo

SAX ATL Guarantee Review of ATL requirement ATL guarantee

Ad Hoc (SAA and SAX)

Hedging policy and s66 approval Develop policy, respond as applicable Approved SAA and SAX hedging policiesFull s.66 approval fro SAA and SAX

Cabinet memoranda – DPE generated and responding to externally generated Cab Memos

Assess and prepare responseDraft cabinet memoInterdepartmental consultations (DPE cab memos)

Memo to Minister and DG on Department comments on external cab memosMemo and cab memo submitted to DG and Minister

Press articles One article per annum (each for SAA and SAX) Written response to relevant unit (Communications)

Parliamentary questions Assess and prepare response Drafted responses

PFMA Section 52.2 applications Assess request and provide responseParticipate in project team discussions re recommendationsProvide written inputs to be consolidated into memo to DG and Minister

Written inputs to project leader (LGRS) to be incorporated into final memo to DG and Minister

Referrals from Minister and DG Assess and prepare response Drafted responses

THANK YOU