Presentation Outline

March 2013

1 INTRODUCTION

• Transport is a catalyst for economic growth,

development, connecting firms, sources of raw

materials and production nodes as well as markets in

the domestic and international environments

• The Coal Industry heavily depends on the transport

capability to operate- land transport systems and

maritime

• Coal volumes moved by road are gradually increasing

• In SADC region road transport carries +/-80% of

regional traffic

• Given the significant role of transport in the domestic

and regional economies and coal industry, there’s need

for an effective and efficient transport system

Challenges and mechanisms to improve productivity

and sustainability in coal transportation by road

2 ROLE OF COAL IN THE (SOUTH AFRICAN)

ECONOMY

Power generation Energy to industry

Liquid fuels

Foreign earnings

Employment

3 THE ROLE OF ROAD TRANSPORT IN THE COAL

VALUE CHAIN

• Road transport facilitates physical

transportation of coal along the value chain

• Road transport is important in connecting

inland coal fields to production nodes

• Road transport links coal fields to rail

networks

• Road transport provides a faster alterative

to coal transportation-ideal in case of

emergencies

• Role of road transport gained momentum

post the deregulation of road transport in

South Africa in 1988 (Act 80 of 1988)

• Road transport is becoming popular not

only in the coal industry but in the

(domestic and regional) freight sector in

general, due to flexibility (routes and

volumes) and lower capital investment

compared to rail (immediate alternative)

However, road transport faces a number of

challenges

March 2013

4 CHALLENGES AFFECTING COAL TRANSPORTATION

BY ROAD

• The road infrastructure and capacity of the network restricts axle loads

• Poor road conditions emanating from lack of maintenance (sometimes there isn’t clarity on road ownership between mines and transport ministries/ departments) impacting on road investment

• There are missing links on the network which increases the distances travelled

• Vehicle capacity limitations restricts payee loads- limited mass

• For any given task, there are higher chances of more trips due to limited vehicle capacity

• Overloading of vehicles

• In-transit handling equipment and spillages (road safety)

• Cost and missing efficiencies

• Inefficient regulatory mechanisms

• In case of cross border traffic, thick border posts and corridors

• Pricing and payment models sometimes impacts cash flows

Some Challenges

5 APPROACH TOWARDS ENHANCING

PRODUCTIVITY AND SUSTAINABILITY

Coordinated Approach by government and industry towards rolling out balanced regulatory control, infrastructure investment, and road transport movement facilitation

Government need to create enabling regulatory and legislative environment to enable industry to do what they do best: building efficient vehicles, increasing productive time, network preservation, safety

6 MECHANISMS TO ENHANCE ROAD TRANSPORT

PRODUCTIVITY

HEY…HOW CAN WE GET IT

RIGHT?

• Investment in infrastructure (new roads, expansion and

maintenance)

• Implementation of fit-for-industry regulatory framework and

legislation that promotes:

• Vehicle technological advancement

• Risk based regulation of coal transport industry-

accreditation

• Performance Based Standards

• Optimising loading capacity

• Greater cooperation among transporters for consolidation of

loads as need arises

• Reducing constraints and NTBs on major corridors linking coal

fields to ports including regulatory inefficiencies

• Reforming border post management systems and process,

CBM, OSBP, NSBP

7 AN INTERMODAL APPROACH TOWARDS

TRANSPORTATION OF COAL

• Looking at rail and road as complementary

• Strategic development of rail and road network

• Road serving as feeder system to rail and market end on certain

corridors

• Road on its own where rail is not economic to construct

• Achieving the right intermodal mix at any given time based on

economic sense, need for efficiency and infrastructure needs

8 OPTIMISING COAL TRANSPORTATION

The Power of Fit-for-Purpose

Vehicles and right mix of regulations

Through the right regulations, transport

operators will be able to introduce high mass

trailer designs which

• Increases load capacity

• Fuel efficiency

• Cost effective

• Reduces fleet requirements

• Reduces trips

• Reduces road damage

9 THE FUTURE OF COAL TRANSPORTATION BY

ROAD

Advancing the road transport industry for

efficient coal transportation

To ensure sustained role of road transport in the

coal industry, it is recommended that there be:

• Sustained infrastructure investment

• Creation of a fit-for-purpose regulatory space

and establishment of flexible regulations to

encourage innovation in vehicle design

• Risk based accreditation schemes for

transporters in the coal industry

• Application of Performance Based Standards

coupled with Intelligent Access Programs

• Elimination of NTBs on corridors and border

posts

• Improving payment turn around times.

March 2013