Transnet Online Integrated Report 2017
Market Demand Strategy (MDS) themes
  • Financial sustainability
  • Capacity creation and maintenance
  • Market segment competitiveness
  • Operational excellence
  • Human capital
  • Organisational readiness
  • Sound governance and ethics
  • Constructive stakeholder relations
  • Sustainable developmental outcomes
Sustainable Developmental Outcomes (SDOs)
  • Employment
  • Skills development
  • Industrial capability building
  • Investment leveraged
  • Regional integration
  • Transformation
  • Health and safety
  • Community development
  • Environmental stewardship
The Capitals
  • Financial Capital
  • Manufactured Capital
  • Intellectual Capital
  • Human Capital
  • Social and Relationship Capital

Material stakeholder interests impacting on value creation

The Shareholder: The Department of Public Enterprise (DPE)
  • Our Shareholder mandates us to deliver on the National Infrastructure Plan through responsible capital investment, thereby enabling the competitiveness, growth and development of the South African economy. We achieve this through the reliable delivery of transport logistics infrastructure and handling services.
  • As Transnet’s sole shareholder, the DPE is concerned with Transnet meeting its performance targets, as agreed in the annual Shareholder’s Compact, which relate to commercial and developmental performance outcomes as enabled through the MDS. These outcomes span all six capitals.
How we engage
  • Regular scheduled engagements between the Minister and the Board Chairperson.
  • Quarterly bilateral and issue-specific meetings between the DPE and Transnet’s executive management.
  • Detailed quarterly reports submitted to the DPE on the Company’s performance against targets.
  • DPE is involved in Transnet’s annual infrastructure capacity planning.
  • Strategic engagements between the DPE and Transnet management inform the development of the annual Corporate Plan.
Material interests
  • Outcome-based approach – risk management, performance management
  • Policy and regulatory uncertainty
  • Shareholder’s Compact
  • Strategy execution
  • Reduction of cost of logistics
  • TE sustainability
  • Transnet integrated approach
  • Jobs and community development
  • Supplier and Enterprise Development
  • Engagements with communities and Government
  • Disposal of properties in line with Government policies
  • Timeliness of reporting
  • Health and environmental hazards
  • Reduction of safety incidents
Investors, commercial partners and credit rating agencies
  • Key sources of funding to support Transnet’s business activities.
  • The global economic situation is putting increasing pressure on public-sector funding. Innovation through commercial partnerships is an essential mechanism for maintaining the quality and scope of services while reducing costs.
  • Credit rating agencies assess Transnet’s creditworthiness. Transnet has a standalone investment grade and raises funds on the strength of its balance sheet and receives no funding or guarantees from the fiscus.
How we engage
  • Quarterly investor briefings
  • Roadshows
  • Bi-annual reporting
  • Commercial networks and business interactions
Material interests
  • Liquidity and sustainability
  • Capital project execution
  • Volumes and efficiencies
  • Impact on the community
  • Policy and regulatory uncertainties
  • Contribute to our revenue through their use of Transnet’s rail infrastructure to transport volumes.
  • Impacted by pricing and tariff structures agreed with regulatory bodies.
  • Expect service value commensurate with tariff increases.
  • Value is provided in the form of infrastructural enablement and transport infrastructure as well as service support.
How we engage
  • Customer-specific operational meetings
  • Roadshows
  • Seminars and conferences
  • Industry networks
Material interests
  • Operational efficiency and productivity
  • Sharing of long-term plans
  • Competitive pricing
  • Development of small, medium and micro-enterprises
  • Security of goods and services
  • The principal human capital needed by Transnet to enable its business.
  • Transnet remunerates employees commensurate with industry remuneration standards and invests in their upskilling and development.
How we engage
  • Regular staff meetings and roadshows
  • Newsletters
  • Staff communiques
  • Team building
  • Strategic planning sessions
Material interests
  • Changes in terms and conditions of service
  • Standardisation of processes and operating procedures
  • Health and safety of employees
  • Involvement in community upliftment projects
Suppliers and service providers
  • Provide products and services that span the various capitals.
  • Suppliers both impact and are impacted by Transnet’s procurement processes and supplier development programmes as well as the contracting terms contained in procurement agreements.
  • Ethical conduct.
How we engage
  • Monthly and quarterly meetings
  • Scheduled supplier summits
  • Supplier contracting process
  • Electronic supplier communication to assess ease of engagement with Transnet and priority concerns
Material interests
  • Transparency of procurement processes
  • Information about tendering and contracting
  • Information about enterprise and supplier development programmes
  • Operational inefficiencies within supply chain management – contract management
Organised labour
  • Transnet engages with organised labour through recognition agreements.
How we engage
  • Engagement through recognition agreements which provide for monthly and/or quarterly meetings
  • Collective bargaining takes place regularly through the bargaining council
Material interests
  • Compliance with employment equity
  • Increase in wages aligned with inflation
  • Problem of unrecognised labour unions
  • Gender representation
  • Transnet’s activities impact the lives of communities in and around our operations. We actively promote community well-being in and around our operations through the Transnet Foundation.
How we engage
  • Regular meetings and workshops
  • Communication and engagement campaigns
  • Roadshows
  • Career expos
  • Implementation and management of CSI projects
Material interests
  • Socio-economic impact on communities
  • Relationships with community representatives
  • Cable theft
  • Level-crossing safety
  • Criminal activities
  • Tariffs for two of our divisions, the National Ports Authority and Pipelines, are set by the Ports Regulator of South Africa (the Ports Regulator) and the National Energy Regulator of South Africa (Nersa) respectively. Freight Rail is free to set market-related tariffs without economic regulation.
  • Sharp escalations in safety permit fees charged by the Rail Safety Regulator are a critical consideration for the Company’s revenue planning.
How we engage
  • The annual applications processes
  • Ongoing meetings and joint planning sessions
  • Scheduled strategic planning sessions
  • Written comments and workshops
Material interests
  • Company performance and pricing strategy
  • Security of supply of goods and services
  • Regulatory uncertainty
  • Impact on the economy
  • Payment of permit fees
  • Transnet collaborates with both National and Provincial Government departments in the planning and management of freight infrastructure.
  • Provincial and national priorities extend to the upliftment of local communities and businesses. Government is invested in Transnet’s ability to facilitate employment and business opportunities, particularly for historically disadvantaged South Africans.
  • Local Government is concerned with Transnet’s management of the Company’s property and equipment and the impact of these capitals on surrounding communities and the public. Impacts include the safety within the proximity of Transnet property and equipment, e.g. accidents at level crossings and the theft of equipment, such as cables and other assets.
How we engage
  • Regular issue-specific meetings
  • Joint planning sessions
  • Strategic Integrated Programme co-ordination structures
  • Written comments and workshops
  • Meetings with a variety of local structures
  • Joint planning sessions
  • Regular feedback to the relevant Parliamentary Portfolio Committees
  • Annual presentation to the Parliamentary Portfolio Committee on Public Enterprises on Transnet’s results and Shareholder’s Compact performance
Material interests
  • Collaboration in planning of freight management
  • Alignment with provincial programmes and objectives
  • Community development, jobs and supplier development
  • Environmental compliance
  • Alignment between Government infrastructure plans and Transnet’s planning
  • Transnet’s servitude agreements with landowners
  • Crime in and around Transnet properties
  • Utilisation of unused Transnet property
  • Municipal rail siding infrastructure
  • Access to Transnet land, assets and facilities
Non-Governmental Organisations (NGOs) and international bodies
  • Transnet partners well-established NGOs to further common conservation or developmental goals through financial, human or infrastructural support for existing initiatives. Other NGOs include those concerned with broad environmental stewardship, animal and biodiversity conservation, and community upliftment in and around Transnet’s operations.
How we engage
  • Engagement through various associations
  • Environmental Impact Assessments consultation processes
  • Local CSI projects
Material interests
  • Transnet’s impact on the environment
  • Transnet’s impact on the communities where operations are located
Media and the general public
  • The print, broadcast and electronic social media are concerned with transparent access to information relating to Transnet’s performance, including large-scale economic and developmental achievements and potential failures.
How we engage
  • Group and Operating Division media relations
  • Online archive of Transnet press articles
  • Regular media briefings and press releases
  • Communication and engagement campaigns
  • Media roadshows
  • Participation in sector-specific and trade publications
  • When required, engaging through written comments
Material interests
  • Perceived lack of transparency and information availability
Academic institutions
  • Important contributors to Transnet’s research and development initiatives, as well as adding a body of technical skills and capacity to augment the Company’s own engineering and project management capabilities.
  • Partnerships include joint environmental monitoring activities and projects to address significant techno-disciplinary challenges, such as developing a feeder stream of highly qualified and contributing engineers.
How we engage
  • Engagements with academic and scientific institutions based on project interests and requirements
  • Formal partnerships with key academic institutions
Material interests
  • Collaboration on research, technology and innovation
  • Community development