DEPARTMENT: PUBLIC ENTERPRISES
REPUBLIC OF SOUTH AFRICA
NCOP
QUESTION FOR WRITTEN REPLY
QUESTION NO.: 278
DATE OF PUBLICATION: 08 June 2012
278. Mr H B Groenewald (DA-NW) to ask the Minister of Public Enterprises:
(a) What percentage of Transnetâs Capital Expenditure projects are being
outsourced and (b) how does this affect skills transfer at Transnet?
CW376E
REPLY
According to Transnet
(a) The level of outsourcing differs from project to project. Transnet
estimates that over the next seven years, the State Owned Company (SOC)
will outsource 86% of its capital projects as part of its Market Demand
Strategy, (MDS) which will invest R300 billion for the period 2012/13 to
2018/19 to create and sustain infrastructure capacity. These costs include
the expenditure on acquired materials and machinery (e.g. locomotives,
cranes) from suppliers outside of Transnet.
Transnet has defined in-sourced project expenditure as that which is
attributable to internally generated costs. The vast majority of the 14% in-
sourced capital relates to Transnet Employee costs (including contract
labour).
(b) The outsourcing of Transnetâs Capital Expenditure projects does not
negatively affect skills transfer within Transnet.
The execution plan for the MDS encapsulates the development and sustaining
of Transnetâs internal capital capabilities through the transfer of skills
and skills development in line with the objectives contained in the New
Growth Path.
Transnetâs internal capital capabilities that contribute to skills transfer
and development within Transnet are outlined hereunder:
⢠Transnet Rail Engineering is a division of Transnet that provides in-
house manufacturing capabilities in the areas of wagon, locomotive, wheel
and component manufacture (capital and operating expenditure). Through
this division a programme has been developed to provide a skills
pipeline, to support the MDS through a consistent flow of:
- Engineers (increasing from 50 to 100 per annum)
- Technicians (increasing from 55 to 100 per annum)
- Artisans (increasing from 1 200 to 2 000 per annum)
⢠Transnet Capital Projects (TCP) is a division of Transnet that rolls out
centrally focussed cross divisional projects and mega infrastructure
projects and other designated projects through the deployment of
permanent employees that have been dedicated to the roll out of a major
component of Transnetâs investment plan. Transnet enters into
partnerships with engineering, procurement and construction management
(EPCM) contractors to assist in rolling out projects. A key component of
the service level agreements is the mentoring and training of staff
involved in the projects to ensure skills transfer.
⢠Various in-house project management capabilities are also being enhanced
and developed within the operating divisions, specifically to roll out
projects that are not executed by Transnet Capital Projects. These
capabilities will reside in dedicated project management/project support
offices and are headed by senior managers who are members of Divisional
Executive Committees in certain instances. This arrangement ensures the
continued skills transfer and development within Transnet.