BEE at the National Ports Authority of South Africa

PresenterSiyabonga Gama, CEOPresenterSiyabonga Gama, CEO

The National Ports Authority of South Africa

The National Ports Authority of South Africa

Who Is The NPA?Who Is The NPA? The National Ports Authority of South Africa owns and manages all seven commercial ports on the 3 300-km South

African coastline. These ports are Richards Bay, Durban, East London, Port Elizabeth, Mossel Bay, Cape Town and

Saldanha.

As landlord it is responsible for overseeing all aspects of port infrastructure development, leasing of port property and

maintenance and marine activities

The company generate a profit of approx R1.9bn in profit annually

We are building the eighth port next to Port Elizabeth in the Eastern Cape…the Port of Ngqura

The National Ports Authority of South Africa owns and manages all seven commercial ports on the 3 300-km South

African coastline. These ports are Richards Bay, Durban, East London, Port Elizabeth, Mossel Bay, Cape Town and

Saldanha.

As landlord it is responsible for overseeing all aspects of port infrastructure development, leasing of port property and

maintenance and marine activities

The company generate a profit of approx R1.9bn in profit annually

We are building the eighth port next to Port Elizabeth in the Eastern Cape…the Port of Ngqura

The Business Of NPAThe Business Of NPALandlord Services

Property management

Planning and development

Safety, Health and Environment

Engineering

Security Services

Maritime Services

Marine Services

Ship Repair Services

Lighthouse Services

Dredging Services

Landlord Services

Property management

Planning and development

Safety, Health and Environment

Engineering

Security Services

Maritime Services

Marine Services

Ship Repair Services

Lighthouse Services

Dredging Services

Serving The South African Economy

Serving The South African Economy

The efficient running of ports is important to the well-being of the economy of South Africa

The ports handle 98% of the countries exports and imports (212m tons in 2003)

The ports are the primary conduit for trade, serving as the gateway of the world to the Southern African economy

2 years old organisation, with new personality, new vibrancy, new corporate footprint and fresh dedication to embrace business development challenges whilst addressing a transforming society’s needs and aspirations.

The efficient running of ports is important to the well-being of the economy of South Africa

The ports handle 98% of the countries exports and imports (212m tons in 2003)

The ports are the primary conduit for trade, serving as the gateway of the world to the Southern African economy

2 years old organisation, with new personality, new vibrancy, new corporate footprint and fresh dedication to embrace business development challenges whilst addressing a transforming society’s needs and aspirations.

Richards Bay

Durban

East London

Cape Town

Saldanha

. .

.. .

Mossel BayPort Elizabeth

Ngqura. . .

Deepwater portsDeepwater portsRichards Bay

SA’s major bulk port handling 65 million tons of coal and 30 million tons of general cargo exports

2nd largest bulk coal terminal in the world and world class operations

Also provides multipurpose and bulk metal terminals

Saldanha

Second bulk port exporting some 24 million tons of iron ore and importing around 4 million tonnes of crude oil

Other exports include base metals, finished steel products and chemicals

Richards Bay

SA’s major bulk port handling 65 million tons of coal and 30 million tons of general cargo exports

2nd largest bulk coal terminal in the world and world class operations

Also provides multipurpose and bulk metal terminals

Saldanha

Second bulk port exporting some 24 million tons of iron ore and importing around 4 million tonnes of crude oil

Other exports include base metals, finished steel products and chemicals

Hub PortsHub PortsDurban

Busiest container port moving 1.4 million TEU’s in 2002 Major handler of liquid bulks and other commodities such as

grain, fruit and forest products Its 525 000 tonnes sugar terminal is the biggest in the world Ship repair facilities are offered

Cape Town

Geographic position at crossroads of international sea routes Single major export is fruit from the Western Cape region Also boasts a significant container terminal Important base for fishing industry Multi purpose, dry and liquid bulk terminals as well as fully

serviced dry docks

Durban

Busiest container port moving 1.4 million TEU’s in 2002 Major handler of liquid bulks and other commodities such as

grain, fruit and forest products Its 525 000 tonnes sugar terminal is the biggest in the world Ship repair facilities are offered

Cape Town

Geographic position at crossroads of international sea routes Single major export is fruit from the Western Cape region Also boasts a significant container terminal Important base for fishing industry Multi purpose, dry and liquid bulk terminals as well as fully

serviced dry docks

Multi-purpose portsMulti-purpose portsPort Elizabeth Major fruit terminal Manganese ore is next biggest export commodity Entry point for the motor car industry while also an exit for fully-

built vehicles to the Far East

East London Only commercial river port in the SA port system Boasts largest grain silo in southern Africa Grain; primarily maize, is the most important single product

exported through the port

Mossel Bay Specialised port serving local inshore and deep-sea fishing

industry Offshore oilfields and inland gas refinery are serviced here

Port Elizabeth Major fruit terminal Manganese ore is next biggest export commodity Entry point for the motor car industry while also an exit for fully-

built vehicles to the Far East

East London Only commercial river port in the SA port system Boasts largest grain silo in southern Africa Grain; primarily maize, is the most important single product

exported through the port

Mossel Bay Specialised port serving local inshore and deep-sea fishing

industry Offshore oilfields and inland gas refinery are serviced here

Total Cargo Handled Per Port 2002/2003Total Cargo Handled Per Port 2002/2003

21%

3%

1%

2%

1% 19%

53%

Richards Bay Saldanha Bay Cape TownEast London Port Elizabeth Mossel BayDurban

Nature of Cargo Handled - 2002/2003Nature of Cargo Handled - 2002/2003

1%3%

74%

22%

Imports

Exports

Coastwise

Transhipments

Port development upgradePort development upgrade

Port of Ngqura R3.2b greenfield development of new port in

the Eastern Cape Key port to unlocking potential of 12ha

Coega Industrial Development Zone new addition to our deepwater port at depth

of 16 metres to handle new generation large ships

Will provide two container terminal berths and three for general and bulk cargo (phase 1)

Delivery date is September 2005

Port of Ngqura R3.2b greenfield development of new port in

the Eastern Cape Key port to unlocking potential of 12ha

Coega Industrial Development Zone new addition to our deepwater port at depth

of 16 metres to handle new generation large ships

Will provide two container terminal berths and three for general and bulk cargo (phase 1)

Delivery date is September 2005

Port development projectsPort development projectsPort of Durban R1.6bn upgrade of Container Terminal and reconfiguration of the

port Redevelopment of Maydon Wharf Widening of harbour entrance commencing during 2004 Possibility of mix-use facilities to support a passenger terminal

for the cruise ship industry

Port of East London R10m towards deepening car terminal berth

Port of Richards Bay R300m investment to extend the coal terminal to handle

additional capacity Addition of a ship repair facility (dry dock)

Port of Durban R1.6bn upgrade of Container Terminal and reconfiguration of the

port Redevelopment of Maydon Wharf Widening of harbour entrance commencing during 2004 Possibility of mix-use facilities to support a passenger terminal

for the cruise ship industry

Port of East London R10m towards deepening car terminal berth

Port of Richards Bay R300m investment to extend the coal terminal to handle

additional capacity Addition of a ship repair facility (dry dock)

Port development updatePort development update

Mossel Bay NPA is currently conducting a study to investigate the possibility of

expanding the port and ensuring infrastructure integrity, although this is intertwined with the fortunes of PetroSA in the main

Cape Town R550m towards a Container Terminal Expansion program to meet

future space demand Ship repair facility linked to the growth of oil and gas industry off

Africa’s west coast

Port Elizabeth Possibilities around the accommodation of Waterfront

developments by making the port more people and cargo friendly

Mossel Bay NPA is currently conducting a study to investigate the possibility of

expanding the port and ensuring infrastructure integrity, although this is intertwined with the fortunes of PetroSA in the main

Cape Town R550m towards a Container Terminal Expansion program to meet

future space demand Ship repair facility linked to the growth of oil and gas industry off

Africa’s west coast

Port Elizabeth Possibilities around the accommodation of Waterfront

developments by making the port more people and cargo friendly

Port development updatePort development updatePort of Saldanha R30 million infrastructure maintenance and renewal throughout

the port Recent extensions to multipurpose terminal – additional berths

to handle increased capacity Expansion of ore terminal, alterations to oil jetty as well as

infrastructure linkages to hinterland

Security upgrade R200m towards enhanced measures at all ports – retraining of

security personnel, fencing and access control, high tech installations of CCTV

Port Control - meeting AIS challenges and requirements Meeting compliance to ISPS Code of the IMO

Port of Saldanha R30 million infrastructure maintenance and renewal throughout

the port Recent extensions to multipurpose terminal – additional berths

to handle increased capacity Expansion of ore terminal, alterations to oil jetty as well as

infrastructure linkages to hinterland

Security upgrade R200m towards enhanced measures at all ports – retraining of

security personnel, fencing and access control, high tech installations of CCTV

Port Control - meeting AIS challenges and requirements Meeting compliance to ISPS Code of the IMO

Strategic DirectionStrategic DirectionNPA’s strategic direction underpinned by the National

Commercial Ports Policy and National Ports Authority Bill

The National Ports Authority Bill specifically requires NPA– To promote the achievement of equality by

measures designed to advance persons or categories of persons historically disadvantaged by unfair discrimination in the operation of facilities in the ports environment

– Promote greater representivity, in particular to increase the participation in terminal port operations of historically disadvantaged persons

NPA’s strategic direction underpinned by the National Commercial Ports Policy and National Ports Authority Bill

The National Ports Authority Bill specifically requires NPA– To promote the achievement of equality by

measures designed to advance persons or categories of persons historically disadvantaged by unfair discrimination in the operation of facilities in the ports environment

– Promote greater representivity, in particular to increase the participation in terminal port operations of historically disadvantaged persons

BEE StrategyBEE Strategy

To accelerate procurement from black-owned and empowered

enterprises to create new enterprises with the objective of

growing existing emerging entrepreneurs to produce value-

added goods and services for the industry and increase employment

To accelerate procurement from black-owned and empowered

enterprises to create new enterprises with the objective of

growing existing emerging entrepreneurs to produce value-

added goods and services for the industry and increase employment

Primary Policy ObjectivesPrimary Policy ObjectivesFacilitate access by Black suppliers to NPA

procurement activity

Ensure that an increasing portion of contracts are awarded to Black Entrepreneurs and Suppliers with a clear and evident commitment to Black Empowerment

Facilitate entry of Black entrepreneurs into port related industries

Create awareness, understanding and support for Black Economic Empowerment among NPA key stakeholders

Facilitate access by Black suppliers to NPA procurement activity

Ensure that an increasing portion of contracts are awarded to Black Entrepreneurs and Suppliers with a clear and evident commitment to Black Empowerment

Facilitate entry of Black entrepreneurs into port related industries

Create awareness, understanding and support for Black Economic Empowerment among NPA key stakeholders

Current Mechanisms Supporting PolicyCurrent Mechanisms Supporting PolicySet aside tenders to enable Black suppliers to compete

amongst themselves

Set clear targets for NPA business units to increase expenditure with Black suppliers

Give preference to traditional suppliers who implement BEE programmes

Provide early payment terms

Proactively create a bias in the process of adjudicating tenders thereby increasing the business awarded to Black suppliers

Set aside tenders to enable Black suppliers to compete amongst themselves

Set clear targets for NPA business units to increase expenditure with Black suppliers

Give preference to traditional suppliers who implement BEE programmes

Provide early payment terms

Proactively create a bias in the process of adjudicating tenders thereby increasing the business awarded to Black suppliers

Supplier Evaluation CriteriaSupplier Evaluation Criteria In supplier assessment & assessing tenders i.t.o their BEE status NPA

considers the following areas:

– Black Ownership: Equity ownership, Board Membership

– Black Management: portion of Black executive, senior and middle management

– Skills Development Programmes: implementation of mentoring and training programmes for Black workers

– Purchasing from Black suppliers: may include JV’s or partnerships with Black groups

– Other Empowerment Initiatives: Equity Ownership Schemes, bursary schemes, etc

In supplier assessment & assessing tenders i.t.o their BEE status NPA considers the following areas:

– Black Ownership: Equity ownership, Board Membership

– Black Management: portion of Black executive, senior and middle management

– Skills Development Programmes: implementation of mentoring and training programmes for Black workers

– Purchasing from Black suppliers: may include JV’s or partnerships with Black groups

– Other Empowerment Initiatives: Equity Ownership Schemes, bursary schemes, etc

Key BEE OpportunitiesKey BEE OpportunitiesConstruction projects:

– R1,2bn BEE spend expected over next 3 years (R/Bay, Durban, Ngqura & Cape Town)

Maintenance projects:– R400m BEE spend on electrical, dredging, marine

craft and equipment maintenance e.g. floating cranes

Provision of security, cleaning and catering services,70% set aside for BEE suppliers

Construction projects:– R1,2bn BEE spend expected over next 3 years

(R/Bay, Durban, Ngqura & Cape Town)

Maintenance projects:– R400m BEE spend on electrical, dredging, marine

craft and equipment maintenance e.g. floating cranes

Provision of security, cleaning and catering services,70% set aside for BEE suppliers

Key BEE Opportunities (cont..)Key BEE Opportunities (cont..)

Supply of uniform clothing R21m (100%) set aside for BEE suppliers, disabled and women groups spread in all ports

Construction of new admin buildings in Saldanha & Mossel Bay – Set aside 100% for black contractors – R21m

Oceans of opportunity for BEE entrepreneurs to participate in terminal operations over the next 5 years as we seek greater private participation in our terminals

Supply of uniform clothing R21m (100%) set aside for BEE suppliers, disabled and women groups spread in all ports

Construction of new admin buildings in Saldanha & Mossel Bay – Set aside 100% for black contractors – R21m

Oceans of opportunity for BEE entrepreneurs to participate in terminal operations over the next 5 years as we seek greater private participation in our terminals

Past AchievementPast Achievement

Total Discretionary Expenditure

BEE spend % BEE spend

R1,209,660,220,91 R479,730,619,28 40%

2002/3 BEE EXPENDITURE

The target for 2003/4 sits at 45% - this is a moving target and is adjusted annually as expenditure grows – 50% by 2005

Challenges Facing NPAChallenges Facing NPAConstruction projects remain too big and specialized

Implementation of our robust supplier development policy to achieve 50% BEE spend by 2004, and 60% thereafter

Fronting by so called “BEE” suppliers

Established white firms still prefer to deal with BEE on the basis and only for public sector work!

Entrepreneurs remain averse to access the really big opportunities, e.g. owning & running shipping lines, accessing land for value-added services

Construction projects remain too big and specialized

Implementation of our robust supplier development policy to achieve 50% BEE spend by 2004, and 60% thereafter

Fronting by so called “BEE” suppliers

Established white firms still prefer to deal with BEE on the basis and only for public sector work!

Entrepreneurs remain averse to access the really big opportunities, e.g. owning & running shipping lines, accessing land for value-added services

Assisting BEE Growth In Maritime SectorAssisting BEE Growth In Maritime Sector

Facilitate access by Black suppliers to NPA procurement activity

Ensure that an increasing portion of contracts are awarded to Black Entrepreneurs and Suppliers with a clear and evident commitment to Black Empowerment

Facilitate entry of Black entrepreneurs into port related industries e.g. warehousing, logistics park operations, stevedoring etc.

Create awareness, understanding and support for Black Economic Empowerment among NPA key stakeholders

Facilitate access by Black suppliers to NPA procurement activity

Ensure that an increasing portion of contracts are awarded to Black Entrepreneurs and Suppliers with a clear and evident commitment to Black Empowerment

Facilitate entry of Black entrepreneurs into port related industries e.g. warehousing, logistics park operations, stevedoring etc.

Create awareness, understanding and support for Black Economic Empowerment among NPA key stakeholders

Way ForwardWay ForwardCommunication of major projects and initiatives prior to

commencement (e.g. Ngqura & Durban 2005)

Entrenching a maritime culture amongst entrepreneurs to take advantage of coastal mines (Ports!)

A sharper focus on supplier development to create meaningful and enduring partnerships

Removing a culture of entitlement amongst some suppliers and ensuring they adopt a continuous improvement culture to drive down costs

Communication of major projects and initiatives prior to commencement (e.g. Ngqura & Durban 2005)

Entrenching a maritime culture amongst entrepreneurs to take advantage of coastal mines (Ports!)

A sharper focus on supplier development to create meaningful and enduring partnerships

Removing a culture of entitlement amongst some suppliers and ensuring they adopt a continuous improvement culture to drive down costs

Initiatives To Support Primary Strategic ObjectiveInitiatives To Support Primary Strategic Objective

Procure at least 60% of ALL discretionary spending from BEE suppliers within the next 5 years

Constantly explore ways of increasing the amount of discretionary spending

Aggressively support the Proudly South African (PSA) campaign - use local as opposed to foreign suppliers

Pursue the ideals of the Maritime Charter

Procure at least 60% of ALL discretionary spending from BEE suppliers within the next 5 years

Constantly explore ways of increasing the amount of discretionary spending

Aggressively support the Proudly South African (PSA) campaign - use local as opposed to foreign suppliers

Pursue the ideals of the Maritime Charter

Let us continue the dialogueLet us continue the dialogue

Call us at 011 242 4121

NPA HQ Procurement Office

Thank You!

Call us at 011 242 4121

NPA HQ Procurement Office

Thank You!