transnet local public procurement feedback: portfolio ... · diesel locomotives • graph 2...

Transnet Local Public Procurement Feedback:

Portfolio Committee on Trade and Industry

September 2017

Transnet is the custodian of South Africa’s rail, ports and pipelines

• 16 Cargo Terminals

operating across 7

SA ports

• Volumes: 4 396

(000’ TEUs)

• Revenue R11,1

billion

• CAPEX: R1,2 billion

• Assets R18,3 billion

• 8 891 employees

• 8 Commercial ports

along 2 798 km of

coastline

• Volumes: 4 466

(000’ TEUs)

• Revenue R10,3

billion

• CAPEX: R2 billion


• 4 188 employees

• 30 400 km of railway

track. General

freight & 2 heavy

haul export lines

• Volumes: 219,1 mt

• Revenue: R39,1

billion

• CAPEX: R15 billion

• Assets R175,8

billion

• 30 305 employees

• Support TFR for

rolling stock and

TPT for lifting-

equipment

maintenance

• Revenue R9,3

billion

• CAPEX: R945

million

• Assets R17 billion

• 12 164 employees

• 3 800 km of

pipelines, mainly

• Volumes: 16 978

(Mℓ)

• Revenue R4,3

billion

• CAPEX: R1,7 billion


• 686 employees

Transnet Group Capital

Transnet Foundation

Transnet Property

Transnet Pipelines

(TPL) Transnet

Engineering(TE)

Transnet Freight Rail

(TFR)

Transnet Port

Terminals

(TPT)

Transnet National

Ports Authority

(TNPA)

Supporting Pipelines Rail Ports

• Invested R145

billion on MDS

initiatives over past

five years and will

invest further

R229,2 billion.

• CSI: R234 million

• Property

Management

3

Background and context

Local Content verification and the funding thereof Various sectors in the South African Economy have been designated to drive the creation of capacity in the economy by

setting various levels of local content.

In the Rail sector the following key items have been designated: Diesel Locomotives Electric Locomotives Components:

Locomotive assembly Wheels Couplers Bearings Bogies Braking systems Axles

Transnet has implemented contract management controls and processes which are being used regarding the OEM

reporting of local content delivery. Transnet has appointed appropriate resources for the execution and oversight of these contract management controls and processes.

According to Transnet’s’ understanding SABS has been appointed as the official Independent Local Content Verification

Agency and as such it is understood that SABS would be suitably funded by the fiscus to be able to perform their function.

The legislation and National Treasury Instruction notes are silent as to whom should carry the costs. To ensure that SABS as the Independent Verification Agency is “seen and is” independent they should funded by the fiscus and not by parties directly or indirectly affected by the verification.

4

Local Content engagement with DTI prior to the RFP for 1064 closing

During the RFP preparation stages Transnet engaged with DTI on a continuous basis to ensure that the RFP was compliant with the local content requirements.

The designations were fairly new and Transnet wanted to ensure that the RFP complied in all aspects regarding local content.

DTI provided Transnet with the local content documents (PDF versions) that were required to be included in the final RFP. These documents, as received from the DTI and were included in the final RFP.

Once the tender was complete these local content documents which the bidders had to include in their responses were provided to DTI as agreed.

The general understanding was that DTI would manage and monitor the local content reporting by

the supplier, including the verification thereof and thus also the consequence management of non-compliance by the supplier to the legislation.

5

1064 Locomotive acquisition

Post Award and Reporting • In August 2016 Transnet, DTI, DPE, SABS and the OEM’s came to present to the Portfolio Committee on the localization progress.

• At this meeting Transnet reported that local content documents for 1064 locomotive build program have been submitted to DTI as required for monitoring and auditing by SABS;

• It was also reported that SABS were engaging OEMs regarding the monitoring and verification process. However, there was a challenge with regards to who should pay for the verification cost.

• Transnet continues to receive local content updates from OEMs whilst they await the local content audit.


6


Freight Rail transports ~15% of the nations freight tonnage annually

Owns and maintains a network of ~22 000 route km and ~30 000 TrackKm

Moved 219.1 million tons in the 2016/17 financial year Record 226.5 million tons in 2014/15

Operates ~1 200 trains per day

Serves ~450 key accounts

Transports ~4.7mt per week

Employs ~27 679 people

The largest Railway in Africa and the Middle East

7

Supplier Development and Local Content

Supplier Development (SD): Aims to increase the competitiveness, capacity and capability of the South African supply base where there are comparative advantages and potential for local or regional supply. This can be achieved through the following: • Industrialisation • Capability and Capability Building

(Localisation) • Sustainability/ Technology and IP Transfer ) • Skills Development • Job Creation and Preservation • Small Business Promotion • Down Stream Supplier Development (Rural

Development) SD is reported monthly and verified on a quarterly basis. OEMs provide a comprehensive verification schedule that should balance to the monthly reports as submitted to TFR.

Local Content (LC): The portion of the bid price which is not included in the imported content, provided that local manufacture does take place. The Locomotives Build Programme fall under the Rail Rolling Stock Designation. Electric Locomotives 60% Diesel Locomotives 55% The locomotives specifications were drafted in accordance with Transnet operational requirements also taking into account the adherence to designated sector.

8

OEM Geographic Allocation and Production Volume

Koedoespoort

Bayhead

OEM Locomotive production no.

Locomotive type

233 Diesel

359 Electric OEM Locomotive

production no.

Locomotive type

240 Electric

232 Diesel

9

Locomotives Accepted

OEM Locomotive Total Locos

Accepted FY 15/16 FY 16/17 FY 17/18

No. of locos

assembled in SA

CRRC E-Locomotive Supply

(CSR)

359

116 0 80 34 76

Bombardier Transportation

South Africa (BT)

240 0 0 0 0 0

General Electric South Africa

Technologies (GE)

233 153 14 85 51 147

CRRC Dalian Locomotive &

Rolling Stock (Pty) Ltd (CNR)

232 0 0 0 0 0

• Breakdown of financial year within which locomotives were manufactured and accepted.

10

Local Content expenditure percentages for Electric

and Diesel Locomotives

Electric locomotives (%) 1 Diesel locomotives (%) 2

Total Local Content Target

Total Local Spend to Date (Designated

components)

Total Local Spend to Date (Designated

components)

Total Local Content Target

Number of locomotives

116

359 153

233

Notes: Electric Locomotives • Graph 1 illustrates the current

status in terms of reporting figure 116 accepted locomotives of the 359 electric locomotives.

Diesel Locomotives • Graph 2 illustrates the current

status in terms of reporting figure 153 accepted locomotives of the 233 diesel locomotives.

• OEMs report monthly on their

local procurement which is inclusive of designated and non-designated components.

• The performance on designated components by the OEMs can only be confirmed once SABS has audited. Local Content

Relative to # of Locos

Accepted

Local Content Relative to #

of Locos Accepted

Sub-Systems and Other Components

Assembly of Locomotives

Assembly of Locomotives

2 Car Body:

- Car body shell

- Door system

- Windows

- Seats (For coach interior)

- Lighting

- Grab pillars and rails

- Interior cladding

- Cable and wire

- Safety equipment

- Pipe works and ducts

3 Bogie:

- Bogie frame

- Motor suspension unit

- Wheel sets and wheel components

- Axle and axle boxes

- Bearings

- Bolster

4 Coupling Equipment :

- Coupler body

- Coupler hook

- Yoke

- Pin

- Draft-gear

1 Suspension :

- Shock absorbers and dampers

- Springs

6 Heat, Ventilation and Air Conditioning

- Fabrication

- Power Coating

- Heat Exchangers

- Fans

- Compressors

- Refrigeration components

- Electrical components

- Fasteners

- Insulation and liners

7 Braking System :

Braking System

8 Alternators :

Alternators

Traction Motors :

Traction Motors

Electric Systems :

Electric Systems

9

10

5

DESIGNATED COMPONENTS

11

Local Suppliers

12

No SA Supplier Name BBBEE Status

Black

Ownership

Black Women

Ownership EME QSE Large

1 Aero Service (Pty) Ltd 2 0.00% 0.00% x x

2 Alstom Ubunye 3 68.33% 68.33% x x

3 Ansys Limited 2 43.84% 19.33% x x

4 Benkling CC 2 51.00% 51.00% x x

5 Booyco Engineering (Pty) Ltd 4 26.00% 26.00% x x

6 DCD Rolling Stock (Pty) Ltd 4 47.81% 5.35% x x

7 EMS Industries (Pty) Ltd 2 0.00% 0.00% x x

8 Eqstra (Pty) Ltd 7 19.38% 9.57% x x

9 IEC Holden (Pty) Ltd 2 51.00% 25.87% x x

10 Janse Van Rensburg (Pty) Ltd 4 0.00% 0.00% x x

11 Kare Sheet Metal Products (Pty) Ltd 4 0.00% 0.00% x x

12 Knorr Bremse SA (Pty) Ltd 2 25.01% 15.01% x x

13 Laser Junction 4 26.00% 26.00% x x

14 Marble Gold (Pty) Ltd t/a Proseat 4 42.55% 0.00% x x

15 Microelettrica Power (Pty) Ltd 2 100.00% 15.00% x x

16 Minus 40 (Pty) Ltd. 4 0.00% 0.00% x x

17 MTU South Africa (Pty) Ltd. 4 0.00% 0.00% x x

18 Delberg Engineering (Pty) Ltd 2 51.00% 0.00% x x

19 Pacific Beach Trading CC 2 51.00% 0.00% x x

20 Pamodzi Unique Engineering 3 98.56% 29.86% x x

21 Penbro Kelnick (Pty) Ltd 4 26.00% 8.00% x x

22 Profibre 4 0.00% 0.00% x x

23 Radel (Pty) Ltd 2 0.00% 0.00% x x

24 RCK Rail Supplies (Pty) Ltd 1 52.00% 52.00% x x

25 Scaw South Africa (Pty) Ltd 2 73.20% 21.49% x x

26 SIGMA Logistic Solutions (Pty) Ltd 2 25.10% 0.00% x x

27 Siyahamba Engineering (Pty) Ltd 2 90.00% 10.41% x x

28 Swasap (Pty) Ltd 2 25.10% 15.01% x x

29 Tagtronics CC 4 0.00% 0.00% x x

30 Timken SA (Pty) Ltd 5 0.00% 0.00% x x

31 Trans Fire 4 0.00% 0.00% x x

32 Transnet Engineering 2 n/a n/a x x

33 Techtronic Technology Solutions 2 51.00% 0.00% x x

34 VescoPlastics Rail (Pty) Ltd 2 0.00% 0.00% x x

35 Vortex Airflow Systems (Pty) Ltd 4 0.00% 0.00% x x

Local Supplier Letters.zip

Challenges with the Delivery Schedules

• Setting of production lines

• Training on new systems and processes

• Language barriers

• Change of Traction Motor Blower Motors due to inadequate cooling.

• Implementation of incorrect welding method on the under frame of the locomotives. Necessitated

recall of 20 already built locomotives for stress relief as well as introduction of pre-heating

methodology on locomotive manufacturing going forward.

• Longer than anticipated design period due to excessive vibration levels of the Engine/Main Alternator

combination. Resolved and tested in March

• Move to Bayhead, Durban from Koedoespoort Pretoria

• Extraordinary requirement for foundation depth where jigs and fixtures are to be situated due to

seabed geological formation.

• Inadequate provision for modifications based on the outcome of Acceptance Type Testing.

13

Rail Performance – Growth path hampered by economic and market conditions

219214227

210208201182179

0

50

100

150

200

250

2010/11 2009/10

5%

2013/14 2012/13 2011/12

+2.3%

2016/17 2015/16 2014/15

Million Tons

Global recession – rolling stock parked

Commodity market slump; Drought; Low economic

GDP growth

MDS Year 1

14

15

Reasons for Not Suspending CRRC E-Locomotives (CSR) Contract

The Locomotive Supply Agreement makes provision of a standard process that needs to be followed should the OEMs not perform according to their contractual obligations. Should Transnet wish to suspend the contract, Transnet must prove based on a tracked series of events that the contractor has failed to deliver according to the contract. To date, CSR has been delivering locomotives according to the delivery schedule and Transnet has issued delay penalties where the OEMs have failed to deliver in accordance with planned delivery. Similarly for SD, non-compliance penalties are issued to the OEMs should they delay on their SD obligations. A view of OEM performance in terms of Local Content will only be determined once SABS conducts an audit, as the appointed DTI Local Content Auditor.

Local Suppliers

CRRC E-Locomotive Supply (Pty) Ltd

16

Local Suppliers

CRRC Dalian Locomotive & Rolling Stock (Pty) Ltd

17

Local Suppliers

Bombardier Transportation South Africa (Pty) Ltd

18

Local Suppliers

General Electric South Africa Technologies (Pty) Ltd

19

Contents

1 2 Transnet Engineering History, Capacity & Capabilities

TE’s Centre of Excellence 3 Locomotive Build Program (TE Scope) 4 TAL – Trans-Africa Locomotive 5

TE’s Response to Parliamentary questions

LC Challenges and Engagements with DTI 6

NALEDI INHLANGANISO AND STATUS OF FORGED

21

Ports

• Naledi was awarded a 5year contract in 2014

(with an option to extend to a further 2 years)

• The award was for forged wheels which were not designated at the time and Naledi was importing them from Valdunes in France

• The wheel supplied was subject various tests

which includes a lab test, and 2 years in-service testing

• Approval process was concluded in March

2017

• Wheels ordered in line with anticipated demand from TFR and for stock replenishment

Sample ordered

Lab tests are conducted

Wheel is delivered with

data sheets

Orders are place in line

with requirements

More tests are done on safety

critical components

Approval granted on meeting all

the required standards

Approval Process

STATUS OF FORGED IN SA • Currently TE is not aware of any wheel forging plant in South Africa • TE is only aware of one plant that machines imported black forged wheels

TE’s mandate to enable the South African Industry

Manufacturing

• Components are procured from Industry • Industry is supporting TE’s customer

requirements • Industry is supporting TE’s operation in

terms of development • All R&D innovations are done with

industry’s engagement

Commodities

• Steel • Bearings • Wheels • Valves • Braking

System…etc

Types of Contracts

• Long and short term contracts • Orders are based on required

volumes aligned to delivery dates / customer requests

• All tenders and contracts are in line with PPPFA / PFMA requirements

Growth of TE is Growth to the RSA Industry

Competitiveness is Growth

TE Over the years has worked with Industry to further its manufacturing and remanufacturing objectives

Industry Sessions • Annual

Engagements Stakeholders • DPE • DTI • DST • Funding Institutions • Customers

TE enablement means

Industry Feedback on Local Content

• FY14/15 • FY15/16 TE has held

engagements with its suppliers to communicate its plans.

MDS was launched with the industry capabilities in mind

Supplier Development Initiatives were communicated to the SMME’s

Prior to the CSD website TE advertised all its tenders on newspapers

All of TE’s tenders are advertised on the National Treasury Website

All designated components TE ensures that they are evaluated as per the NT Instruction Note

Expensive to localize Lack of technical support

from DST / DTI leaving only TE to support

Funding takes too long and not readily available

The volumes do not justify investment to localize.

TE manufactures on customer requirements

Interpretation challenges on the ramp-up period based on the instruction Note

The drive to include stakeholders in the engagements was motivated by the fact that TE is strategic to the NDP

30 August 2016 TE hosted the Trade and International Relations& Economic & Business Development to KDS for a tour on the line

Transnet Challenges on Local Content

Difficult to localize on the legacy fleet parts as these are locomotives to be phased off in the next 3 years.

Unscheduled maintenance have unpredictable volumes which makes it impossible to forecast

Contents


TE’s Centre of Excellence 3 Locomotive Build program (TE Scope) 4 TAL – Trans-Africa Locomotive 5

TE’s Response to questions directly impacting its existence


25

Continuous technology advancements and improvements

Running Maintenance

Remanufacturing & Conversions Locomotives,

Wagons, Coaches, Components

Heavy Maintenance

Upgrades

Locomotives, Wagons, Coaches,

Components

New Builds

Locomotives, Wagons

Leasing

1859 – Landing of the first railway locomotive in South Africa at Cape Town Running maintenance was first established

TE brings over 150 years of experience to the Transnet Engineering sector and has built substantial expertise...

TE’s evolution and transformation of the SA transport industry1

1950s – Koedoespoort plant established to remanufacture steam locomotives 1970s – Started refurbishing electric locomotives

1999 – Expanded capability to upgrade locomotives starting with 6E1 to 17E 2007 – Upgrading of diesel locomotives

2008 – Entered the new build market

SOURCE: Team analysis

1: Evolution of locomotive capability illustrated

http://en.wikipedia.org/wiki/File:0-4-2_Hawthorne_Leslie_Blackie.jpg

26

We have a wide range of services across the manufacturing value chain per product offering

TE product and service offering within the manufacturing value chain


TE is strongly positioned along the manufacturing value chain, partnering with leading OEM’s and component manufacturers to provide a broad set of quality products

Research & Design Manu-facture

Assembly / Kits

Re-build / Re-man.

Refurbish & Upgrade

Maintain & Repair

Locomotive

Wagon

Coach

Port

Wheel

Rolling Stock

Equipment

Rotating

Machine

Foundry

Pro

du

ct

Bu

sin

ess

Ce

ntr

es o

f E

xce

lle

nce

TE boasts 6 modern manufacturing facilities, equipped with the latest technology, worth over R8bn

27

TE manufacturing infrastructure


Technological highlights

▪ Precision Laser Cutting Equipment

▪ Precision CNC Machining and Bending Equipment

▪ Robotic Welders

▪ 3D Measuring Machines

▪ AC Testing Equipment and Facilities

Efficiency Processes & Tools

▪ Lean Manufacturing Tools

▪ Lean Transactional Protocols

▪ Six Sigma Certified Employees

Koedoespoort Germiston Bloemfontein Durban Uitenhage Salt River

Locomotive

Wagon

Coach

Wheel

Rolling Stock

Rotating Machine

Ports

Foundry

TE has 6 manufacturing centres across the country, with specific product support...

...and each plant utilizes modern plant technology and employs efficiency practices

Businesses

Transnet Engineering Consolidated Capacity

28

Products/Business Capacity

Wagon Business:

• Has capacity to manufacture more than 4500 new wagons a year from three plants i.e. Uitenhage, Bloemfontein and Germiston

Plants

• Has capacity to refurbish more than 5000 wagons per year

• In South Africa TE has capacity to provide maintenance services for a fleet of more than 80 000 wagons.

Types of Wagons:

• Gondola Type Wagons; Tank Wagons (Fuel, Chemicals, Gas & Cement) ; Flat Wagons (Container, Rail Carrier & Sleeper Wagons)

; Closed Top Wagons (Car Carriers, Food & Packed Grain); Bottom Discharge Wagons (Hopper, Ballast & Grain Wagons) and

General Purpose Wagons (Drop Side & High Sided) amongst others.

Locomotive Business

Locomotive Business:

• Has capacity to remanufacture more than 300 locomotives a year ranging from Diesel Locomotives to Electric locomotive.

• TE is currently building capacity to assembly more than 500 new locomotives per year in partnership with other OEMs in two

factories, Durban & Pretoria

• In South Africa TE has capacity to provide maintenance services for a fleet of more than 2200 locomotives

• TE has launched its first African Locomotive Manufactured and assembled at Koedoespoort Pretoria

Coach Business

• Coach Business:

• Capacity to Overhaul & remanufacture more than 350 coaches per year from three factories i.e. Durban, Cape Town & Pretoria

plants

• Capacity can be built to manufacture more than 200 new coaches a year

• Types of Coaches:

• Main line coaches sitters, sleeper coaches, restaurant/catering cars & power cars

• Metro motor & trailer coaches

• Health services trains & Government Services Trains

Transnet Engineering Capacity/Assembly/Manufacturing & Remanufacturing

30

Provide maintenance support services through our extensive geographic network of depots and sound maintenance strategies TE’s Locomotive Business maintenance support capability

TE Manufacturing Facilities

Transnet Engineering’s Offering

Contents


TE’s Centre’s of Excellence 3 Locomotive Build Program (TE Scope) 4 TAL – Trans-Africa Locomotive 5



Locomotives Business

36

Locomotive Business – Leading supplier of locomotive manufacturing and maintenance services in Southern Africa


General Information

The business has an annual capacity of: ~1681 new builds ~2601 upgrades /

remanufacturing ~3921 overhauls ~42001 maintenance

The Locomotive Business refurbishes, converts, upgrades and remanufactures in accordance with globally-accepted railway codes of practice, technical specifications and all factories have ISO 9001:2008 certification

Overview

Key Products and Service

The Locomotive Business is the leading supplier of maintenance, repair, upgrade and manufacturing services in Southern Africa for AC, DC and diesel-electric units. The Locomotive Business consists of 5 factories for new builds and remanufacturing, 1 heavy maintenance facility, a power electronics workshop and other support functions

New builds: 39200, 43 class, 44 Class, 20E, 21E,22E , 45 Class & TAL 2001

Upgrades: 7E1, 9E, 11E, 18E, 34/37 GM, 34 GE diesel electric locos

Minor Overhaul Programs (MOPs) DC type: 6E1, 8E, 10E, 10E1,

18E AC type: 7E, 7E1, 7E2, 7E3,

7E4, 11E Rebuilds: Diesel electric locos;

Electric DC locos; Electric AC locosv

By designing and Manufacturing Trans-

Africa Locomotive (TAL) which was launched in April

2017, TE has become the only African

Locomotive OEM in Africa

37

Locomotive Business – Leading supplier of locomotive manufacturing and maintenance services in Southern Africa


TE’s Locomotive Business capability across the value chain

Technology and Infrastructure

Testing & Commissioning

Maintenance & Upgrade

Assembly & Fitment

Mechanical Fabrication & Manufacture

Design & Manufactured

Electrical Fabrication & Manufacture

TE’s current capability

TE has capability to: • Heavy metal

engineering fabrication and manufacture

• Casting of various steel components

• Rebuild of all high voltage and electronic/electrical cubicles and equipment for locomotives

TE has designed: • 18E Locomotive • Trans Africa

Locomotive 2001 • Diesel upgrades • Locomotive

modifications to counter obsolescence

• Upgrades/redesigns to inherent design defects on the locomotive fleet

• Total cab design and manufacture

• Power electronic cubicle and rebuilds

TE has capability to: • Assemble and fit all

locomotive types completely: 3kVDC, 25kVAC, 50kVAC, 3kV/25kV and Diesel-Electric locomotives

TE has capability to: • Perform type testing,

commissioning testing and in-service testing of all locomotive types: 3kVDC, 25kVAC, 50kVAC, 3kV/25kV and Diesel-Electric locomotives

TE has capability to: • Perform all levels of

maintenance (scheduled, unscheduled, wreck repairs - light and heavy) on all locomotive types: 3kVDC, 25kVAC, 50kVAC, 3kV/25kV & Diesel-Electric

• Maintenance also includes general & minor overhauls

• Upgrades currently include GE34, GM34, GM37, 18E, 7E1 and will be expanding to include 10E, 10E1, 10E2, 7E2, 38Class

The Locomotive Business manufactures, converts, upgrades and remanufactures in accordance with

globally-accepted railway codes of practice, technical specifications and all factories have ISO 9001:2008

certification

Strategic Centres of Excellence that function as independent business units ensuring high product quality

38

TE’s specialised Centres of Excellence within the Locomotive Business


Centres of Excellence

… Fully fledged business units, which may have satellite businesses throughout the country … Supported by Product Development and Engineering departments … Continuously building skills and expertise to ensure high quality products are produced … Certified by the applicable OEMs. Power Electronics process is the only facility in SADC certified by Siemens … Capable across a number of functions across the value chain from new build, repair, refurbish and testing

Centres of Excellence are…

Power Electronics

High Voltage Cubicles

Low Voltage Cubicles

Recovery & breakdown

Locomotive Bogies

Locomotive Brake

Systems

Electronic Cards

Wagon Business

Wagons Business – Original Equipment Manufacturer (OEM) and Wagons maintenance services in Africa

40

General Information

The business has an annual capacity of: ~4500 new builds ~4000 re-manufacturing/

remanufactures ~16000 maintenance

The Wagons Business builds new, refurbishes, converts, upgrades and remanufactures in accordance with globally-accepted railway codes of practice, technical specifications and all factories have ISO 9001:2008 certification. All four manufacturing factories are AAR certified and approved

Overview


The Wagons Business is the leading supplier of New Build, Upgrade and Remanufacturing services for Wagons Africa. The Business consists of 4 Major factories for new builds and re-manufacturing, and maintenance depots across South Africa

The Wagons Business offers:

Manufacturing of all types of freight wagons cars

Maintenance & Remanufacturing of all types of freight and infrastructures wagons cars cars

Manufacturing and remanufacture of all types of intermodal solutions

TE Wagons Offerings

Ports Business

Port Business – Offers engineering and manufacturing services to various Ports

Overview


General Information

The Port Business offers engineering services to South African Ports and Harbours which includes maintenance, new build, remanufacture and repairs of ports and marine related equipment. The Port Business operates primarily from the Durban main centre and in various client premises to ensure on-site availability and support services

The Port Business offers:

Manufacturing of Bath tub trailers, Skips and Containers

Remanufacture of Dolley Trailers, Ship-to-Shore Carriers and Hoppers

Repair of Grabs, Skips and Electrical Motors

Maintenance of Haulers and Straddle Carriers

The business has capacity to manufacture 176 bath tub trailers and refurbish 88 straddle carriers per annum

The business has 47 employees and is in a process of filling 81 additional positions

Operational efficiency is measured through adherence to production delivery plan, number non-conformances reports, degree of operational waste in the process and customer satisfaction levels

TRANSNET ENGINEERING: MANUFACTURING –Coach Business

Coach Business

Coach Business product offerings

Overview


The Coach Business is responsible for the Maintenance, Remanufacture and Upgrades of both motor and trailer coach wagons. The business operates out of three of TE’s manufacturing centres (Durban, Salt River and Koedoespoort) while conducting maintenance on coaches out of three depots country wide

The Coach Business offers: Upgrading and overhauls of the

10M5 and 10M3 motor and trailer coach wagons

Upgrading and overhauling of specialised coach wagons (health services and luxury transport)

Heavy and Light maintenance of specialised motor and trailer coaches

Manufacturing of several components for coach wagons ranging from bogies to car bodies, amongst others

1 Based on current single shift, capacity increases significantly through inclusion of additional working shifts

General Information

The Coach Business has the capacity to upgrade and overhaul 751 motor coaches and 2251 trailer coaches annually

All facilities are ISO 9001:2008 certified

Responsible for the Phelophepa Health Train, the most advanced basic health train in the world

TE’s Coach Business facilities are strategically located to service the needs of the local and international coach market (in terms of maintenance, repairs and overhauls)

46

COACH BUSINESS

Manufacture, Repairs, Upgrade and

Maintains Railway Cars

Versatile & Cost Effective Solutions:

Design, build, customise

OEM

World class manufacturing

COE: Subcomponents manufacturing

internally centralized (in progress) (Kds)

Astonishingly versatile, this business has built everything from PRASA’s suburban commuter coaches to kitchen, sleeper, sitter, conference, baggage, dining cars, road knowledge (driver

training)and Business Express coaches catering for the business class/tourist.

STATUS - COACHES

Results Announcement 2016

STATUS - COACHES

CURRENT STATUS: The Coaches business has the capacity repairs, remanufacture, upgrades and manufactures more than 250 to 300 mainline coaches and suburban electric coaches annually. Coach business has also the capability to maintain all the different type of coaches’ fleet it manufactures.

1990 1950 - 1990 1948 1890 1860

Upgrade of 5M2A Motor Coaches to Micro processor traction control

The 4M series Motor in South Aftrica

The 3M series Motor in South Aftrica with two Pantographs

The Motor Coach in South Aftrica

The First Passenger in South Africa

2016 2006 2007 2002 1997

Develop and build first Unibody Main line Coach

Design and Build the 10M5 Modular design 3CR12 Body Structure

Upgrade of Shosholoza Myle to Premier Class

Upgrade of 5M2A chopper control to 10M3 Modular body structure to accomadate the latest Chopper upgrade (water cooled)

Upgrade of standard 5M2A Motor Coaches & Plain Trailers to 10M standard

Contents





Locomotive Build Program

1064 TE Scope of Work

50

Note: TE overall Scope = 15% Material = 45% of which local suppliers are used Assembly and Labour Cost = 55%

Description Volume TE Subcontracting

Scope % Facility

Locomotives Build Projects 1064 15%

Class 22E Electric Locomotives 359 17% Koedoespoort

Class 23E Electric Locomotives 240 6% Durban

Class 44D Diesel Locomotives 233 17% Koedoespoort

Class 45D Diesel Locomotives 232 22% Durban

Locomotive New Build Sales (incl. 1,064) relative to total TE sales

10,177 8,535

3,641 526

3,115

2016/17 2015/16

10,734 557 9,380

846

2017/18 Actual Year to Date (5 months)

Locomotive New Builds

Other TE sales

Ran

d M

illio

ns

%

95% 91% 86%

14%100%

2017/18 Actual Year to Date (5 months)

2016/17

5%

2015/16

9%

TE Spend with Local Industry

Vendor Name 2014 Spend 2015 Spend 2016 Spend Black Ownership Black Woman Ownership Commodity

512123 SCAW SOUTH AFRICA R 580 024 891.11 R 558 096 383.41 R 194 726 905.41 73.2% 21.5% Wheels , Couplers and Bogies

525943 GE SOUTH AFRICA TECHNOLOGIES R 363 160 463.44 R 293 393 770.27 R 352 977 836.19 44.7% 21.9% Various Locomotive Parts

520277 DCD GROUP R 343 255 786.53 R 206 577 675.50 8 582 714.28R 49.2% 7.4% Brake Blocks, Gibson and rings and Tyres

527648 TIMKEN SOUTH AFRICA R 226 047 354.05 R 221 176 964.10 R 204 283 627.17 0.0% 0.0% Bearings

524940 GLOBAL RAILWAY AFRICA R 203 946 027.00 R 0.00 R 0.00 51.0% 0.0% Bogie Castings

513323 SWASAP R 189 467 748.23 R 157 692 759.95 R 23 849 900.08 26.8% 7.8% Axles

526482 SCHENKER SOUTH AFRICA R 172 919 495.47 R 85 532 057.87 R 29 722 187.43 25.0% 6.9% Shipping

513030 KNORR BREMSE SA R 152 531 400.20 R 130 004 661.94 R 101 021 584.24 25.0% 15.0% Braking systems

527525 REELIN INVESTMENTS R 108 620 240.42 R 128 937 744.06 R 69 857 405.05 100.0% 60.0% Bearings

514259 ACTOM TRANSPORT EQUIPMENT AND PROJE R 100 599 556.94 R 34 708 603.66 15 125 722.43R 36.3% 10.4% Various Electrical Locomotive parts

520381 CONBRAKO R 85 293 810.20 R 64 926 664.01 R 29 187 688.15 0.0% 0.0% Valves

512267 AVENG TRIDENT STEEL R 66 163 285.66 R 42 158 090.83 R 48 323 089.49 67.9% 19.4% Steel

524890 AFRI GUARD R 63 965 536.94 R 65 608 548.15 R 23 969 339.96 51.0% 0.0% Security Services

509529 AFRICAN OXYGEN R 63 288 906.92 R 64 944 403.09 R 37 669 832.93 65.0% 13.2% Gas and Welding Wire

521428 MICROELETTRICA POWER R 57 740 517.00 R 31 495 103.73 13 405 443.13R 26.0% 15.0% Various Electrical Locomotive parts

525315 AMERICAN EXPRESS CARD R 42 734 791.96 R 54 208 891.87 R 34 070 673.53 37.6% 17.4% Travel

524514 ACTON REPAIR SERVICES R 38 251 536.05 20 004 035.70R 11 109 820.08R 30.2% 9.8% Various Electrical Locomotive parts

518804 AJM SALES AND SERVICES R 37 489 334.37 R 21 201 324.68 14 170 175.62R 51.0% 0.0% Cranes

506559 KANSAI PLASCON R 37 172 471.36 R 27 497 706.97 R 32 780 659.89 32.2% 9.7% Paint

510093 REID AND MITCHELL R 35 966 524.64 R 41 449 136.73 14 111 310.64R 36.3% 10.4% Various Locomotive parts

521990 FUMANANG ENTREPRENEURIAL PROMOTIONS R 35 900 038.89 R 70 840 545.06 8 805 367.04R 51.0% 0.0% Machinery and Equipment

517911 NUSTART HOLDINGS R 29 761 420.72 R 45 447 266.06 R 24 405 186.76 90.0% 11.4% Windows and Doors

517805 BENKLING R 29 101 678.41 R 31 550 545.24 13 117 195.25R 51.0% 51.0% Couplers

520214 VANRAIL SUPPLIES R 27 333 209.84 R 24 353 359.81 R 16 568 846.17 51.0% 0.0% Valves

23E BT Fabrication Line

53

TE SCOPE

Bogie material

Bogie Fabrication

Bogie Assembly material

Locomotive assembly

Locomotive test and commission

23E BT Assembly Line

54

22E CSR Cab Manufacturing

Cab Left Sidewall Cab Front Sidewall

Cab Rear Sidewall welding

Jig for Building the Main cab of the carbody, where they combine all sides , front and rear walls to make a cab

Dressing, Cleaning and final QC approval before fitting on the carbody frame.

send to Loco

Fitting and Complete Welding the Cab on the jig

Cab Rear Sidewall preparation

22E CSR Carbody Fabrication and Manufacturing

Aligning and welding of side frame, bolster and traction beam

Underframe components

manufacturing

Underframe floor fitting and

complete welding

Carbody straightening using gas flame heating torch

Carbody dressing after side

straightening and installation

Final weld and QC Approval

22E CSR Manufacturing and Assembly Line

57

TE SCOPE

Carbody material

Carbody fabrication

Bogie material

Bogie Fabrication


Locomotive assembly material

Locomotive assembly


22E CSR Car Body Fabrication

58

22E CSR Bogies Fabrication

Side rail alignment on jigs and after they go for welding in a rotator.

Weld H-Frame on the jig with side rails and all transoms

1.Measuring bogie and send to oven 2. measure bogie before sending to machining from oven.

3. measure bogie after machining delivery and send to Loco if approved by QC.

Traction transom welding on the jig

Machining of bogies after complete welding

Oven for bogie were heat treatment process is done

44D GE Scope

60

TE SCOPE

Platform material

Platform fabrication

Bogie material

Bogie Fabrication


Traction motor assembly

Wheel assembly

Combo assembly

Aux cab fabrication

Aux cab assemble and test

CA1 fabrication

CA1 assemble and test


Locomotive assembly


61

44D GE CA1 Fabrication and Assembly

44D GE Auxcab Fabrication

Roof Jig assembly, bulkheads, filter box and centre box

Floor assembling

Door frame assembly of the aux cab

final Assembly jig Aux cab is being assembled from all other parts assembled above.

cleaning, do manus and water test of the aux

cab

Final paint cleaning and send to loco after Quality

control approval

send to Loco

44D GE Platform Fabrication

I-Beam manufacturing (I-Beam manufacturing from

assembling to final weld)

Aligning of I-beams and fit traction pin, side bolsters, walkways, endplates and fuel tank

Final welding. fit sump sheets, Engine mounting, Top

plates, small parts and complete welding the platform.

GE Loco Assembly

45D CNR Scope

65

TE SCOPE

Platform material

Platform fabrication

Bogie material

Bogie Fabrication


All cab fabrication

Traction motor assembly

Combo assembly

Engine Alt combo assembly


Locomotive assembly


45D CNR- Line setup and Bogie Fabrication

66

45D CNR Line Set up

67

Contents





Trans-Africa Locomotive

AN UNIQUE AFRICAN SOLUTION BY TRANSNET ENGINEERING

• A diesel locomotive designed and build by Transnet Engineering

• Branch line / shunting locomotive which can also be used as a mainline locomotive in neighbouring countries

where rails can only accommodate low axle loads (16 ton / axle)

• Rail gauge compatible with that of African countries using cape gage lines (1067mm)

• Built to negotiate sharp curves

• Built to withstand dust African conditions

• Good visibility in both direction of travel without need to turn the locomotive around

• Can operate both air brakes as well as older vacuum brake system still in use in many parts of Africa

• Built for ease of maintenance: removable hoods, doors lift off hinges, etc.

• Ideal for passenger trains due to low noise and ability to provide power to the train from the locomotive

• Copper power cables not visible from outside (eliminating the theft problem)

TRANSNET ENGINEERING’S TAL DEVELOPMENT

• Designed and built using TE’S Research and Development capability:

o Design a locomotive “train control monitoring system” including:

Hardware

Software

o Testing the locomotive according to international standards

• TAL is not in competition with locomotives currently built by various OEM’S for the 1064 project

• 1064 locomotives are all “heavy haul” locomotives

• TAL’S focus is a light axle load, cape gauge, niche market largely ignored by international OEMS

• Over time TE wishes to expand the TAL into a family locomotives derivatives largely dictated by the South African

and African Market needs

BUILDING OF LOCOMOTIVE UNDERFRAME AND

COMPONENTS

MANUFACTURING OF UNDERFRAME

TRAIN CONTROL MONITORING SYSTEM DESIGNED AND BUILT IN HOUSE

CONTROL SYSTEM – HARDWARE & DRIVERS DISPLAY UNIT

STIMULATING THE INDUSTRY

BRAKE RESISTOR

RADIATOR, RESERVOIRS

& PIPING

ENGINE & MUFFLER TRACTION CONVERTER TRACTION MOTOR BOGIE GEAR

BRAKE SYSTEM

GEARBOX & WHEELSET

CONTROL SYSTEM AUXILIARY EQUIPMENT

VENTILATION BLOWERS

THE TRANS AFRICA LOCOMOTIVE

Contents



TE’s Response to Parliamentary questions


Local Content engagements and resolutions

• TE is in constant engagements with the dti to address local content related challenges

• Some of the local content challenges include the following

• Number of Request for Quotations issued to the market for designated items. • 3 quotes system an issue for suppliers especially if they are repetitive and the

parts are designated. • Turnaround times for exemptions applications too long resulting in tender closing

date extensions • Suppliers interpretation of Local procurement vs Localization vs Local Content • Difficult to localise on the legacy fleet parts as these are rolling stock fleets to be

phased off in the next few years • Difficulties to forecast, especially on unscheduled maintenance based on the

nature of this procurement activity. • Interpretation challenges on the ramp-up period from the Instruction Note.

• Based on the engagements that the resolutions below have been agreed with dti

• Consolidation of demand to avoid numerous RFQs on designated components

– which Transnet has done. We have a number of long term events in the pipeline which will be supplemented by short contracts as agreed

• Split of legacy vs new fleet – Transnet has done the split. • Unscheduled maintenance – Transnet has highlighted the challenge of

unscheduled maintenance which is unavoidable when operating rolling stock. That will require much quicker response to bring assets back into service, but difficult to predict compared to scheduled maintenance.

• Turnaround times – Agreed 15 working with dti is not working for TE, however it is difficult to measure as they are many variables affecting this (capacity to understand the market)

Legacy fleet vs new fleet

CHALLENGES

TE required a complete exemption regarding staged locomotives and b-fleet locomotive as the the red legacy fleet that will be non operation beyond 2021 and the green legacy fleet that will still remain active.

Fleet

Purchase Date/ Upgrade Date

Av AGE

20

17

/1

8

20

18

/1

9

20

19

/2

0

20

20

/2

1

20

21

/2

2

20

22

/2

3

20

23

/2

4

B-Fleet Declaration

GE34D 1975 42 180

150 104 50 25 0 0 Declare B-Fleet as at Apr 2019 - all major program stopped

GM34D 1975 42 81 50 25 0 0 0 0 Declare B-Fleet as at Apr 2018- all major program stopped

7E 1978 39 0 0 0 0 0 0 0 Declare B-Fleet as at Apr 2016- all major program stopped

7E1 1980 37 40 20 0 0 0 0 0 Declare B-Fleet as at Apr 2016- all major program stopped

9E 1980 37 0 0 0 0 0 0 0 Fleet Staged

GM37D 1982 35 50 30 0 0 0 0 0 Declare B-Fleet as at Apr 2017- all major program stopped






10E/10E2 1987 30 54 54 25 0 0 0 0

Declare B-Fleet as at Apr 2016- all major program stopped

10E1 1989 28 80 80 50 20 0 0 0

Declare B-Fleet as at Apr 2016- all major program stopped

38EDE 1993 24 10 6 0 0 0 0 0 Declare B-Fleet as at Apr 2017- all major program stopped

18E 2007 10 650 650 600 550 500 450 400 Declare portion as B-Fleet as at Apr 2020- all major program stopped

NB: though the 18E is on the green legacy fleet, it will be gradually phased out once the new BT locomotives are being bought in service

Thank You

transnet local public procurement feedback: portfolio ... · diesel locomotives • graph 2...

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