Presentation to the Portfolio Committee on Public Enterprises:

Progress on Job Creation and Skills Development Second Term: 28 June 2011

1

PROGRESS ON JOB CREATION AND SKILLS DEVELOPMENT

The purpose of this presentation is to report on the Transnet progress

against targets as per the initiatives as indicated below:

•Job Creation;

•Skills Delivery;

•Skills Development; and

•Employment Equity

2

THE SKILLS STRATEGY

1. Build and maintain feeder pipelines to grow internal and national skills base;

2. Implement high quality, business aligned training for priority and critical skills;

3. Fill vacancies quickly and with the right people;

4. Align skills planning to attraction and retention of key skills

5. Strengthen supervisory, management and leadership capability;

6. Develop and maintain succession and talent pools aligned to transformational objectives; and

7. Build strong and competent HR business partners.

A Competent Workforce

•Increase on the delivery of artisans;•Pursue funding opportunities to upgrade training facilities;•Sponsor HET initiatives to ensure continuous development of Engineers;•Allocate full-time bursaries to Engineering Students •Support Engineering Technicians by providing vocational work opportunities;•Afford opportunities for gaining workplace experience through various Graduate-in-Training programs; •International partnerships to develop and deliver on sector-specific skills; and •Alignment with quality assurance bodies for vocational disciplines at national level.

•Increase on the delivery of artisans;•Pursue funding opportunities to upgrade training facilities;•Sponsor HET initiatives to ensure continuous development of Engineers;•Allocate full-time bursaries to Engineering Students •Support Engineering Technicians by providing vocational work opportunities;•Afford opportunities for gaining workplace experience through various Graduate-in-Training programs; •International partnerships to develop and deliver on sector-specific skills; and •Alignment with quality assurance bodies for vocational disciplines at national level.

• Ensure succession plans for key positions in management categories;

• Ensure business continuity through retention strategy; and • Conduct talent forums to create talent pools.

• Ensure succession plans for key positions in management categories;

• Ensure business continuity through retention strategy; and • Conduct talent forums to create talent pools.

• Deliver on customised leadership development programs from executive leaders to emergent leaders; and

• Build capacity on FLM/Coordination levels through the introduction of appropriate development programs.

• Deliver on customised leadership development programs from executive leaders to emergent leaders; and

• Build capacity on FLM/Coordination levels through the introduction of appropriate development programs.

Capacity Building

Talent Management

Leadership Development

through

3

JOB CREATION

4

JOB CREATION INITIATIVES: DIRECT JOBS

Direct job creation initiatives are focused on:

•Creation of new positions as per OD requirements;

•Establishment of operator pools to assist in the terminal

operations;

•Filling of vacancies through a robust recruitment plan per

Operating Division;

•Establishment of skills pools to address co-ordination and

supervisory skills;

•Appointment of critical skills; and

•Appointments through trainee programs.

5

48,955 47,763 48,110 51,895 52,565 54,417 54,564 54,351

7,734 7,756 8,097 7,359 7,266 7,232 7,205 7,169

2010/11 March 2011 May 2011 2011/12 2012/13 2013/14 2014/15 2015/16

Estimate Actual Actual Budget Projections

Contractor 8 619

Permanent 46 593

56,689 55,519 56,207

59,253

59,831

61,649

61,769

61,520

• Headcount includes both permanent and contractors.

• Over the 5 years a total of 5,395 permanent employees will be added to Transnet

headcount

to support the increase in activities as reflected in the plans.

• The increase in the employees contributes to the job creation objective contained in

the NGP.

Actual Permanent

Actual Contractor

HEADCOUNT PROJECTIONS

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NEW APPOINTMENTS: APRIL – MAY 2011

EMPLOYEE GROUP TOTAL

Management 23

Engineering 31

Artisan 91

Train Driver / TCO 19

Trainee 301

Other 332

Total 797

• Trainees - 37.8% of total new employees

predominantly in TFR and TRE

• Artisans - 11.4% of total new employees

• TRE recruited 56 Trainees from the SANDF

• The objective is to employ + 200

• Although 797 were appointed, the real

growth in permanent employees is

adversely impacted by employee

turnover

The table below depicts a summary of the appointments per Operating Division for the past two months. This resulted in an increase of total workforce to 56 208 in May 2011.

The majority of the appointments were from the Trainee and Artisan categories:

In order to support Transnet and NGP growth for 2011/12, Transnet plans to increase

permanent jobs from actual March 2011 47,763 to 51,894 projection for 2011/12.7

[1] The 1st column represents the impact for the 2010/11 year, while the second reflects the planned outputs for 2011/12. The jobs created figures include existing jobs and new jobs.[2] Direct and Indirect Jobs for Transnet Opex plus Capex minus Transnet Employees.

JOB CREATION

Baseline Plan

2010/11Total Direct Jobs Created (Transnet Employee Numbers)[1] 56,689 56,208 59,831 59,831 61,649 61,769 61,520

Jobs in supplier industries[2] 118,336 120,778 151,087 144,777 152,367 138,501 143,067 Total direct and Indirect jobs created 175,025 176,986 210,918 204,608 214,016 200,270 204,587 Jobs in operations: PORTS (Annualised estimates including Suppliers)

25,833 30,502 29,453 32,187 34,202 36,114 37,505

Jobs in Operations: RAIL (Annualised estimates including Suppliers)

74,983 84,020 85,492 93,427 99,274 104,825 108,863

Jobs in construction based on the current capital plan (Direct and Indirect Jobs)

65,421 66,924 78,260 74,190 75,996 70,135 70,741

Economy Wide Impact on Jobs from Operations Only

225,375 261,446 256,967 280,816 298,392 315,076 327,214

Economy-Wide Impact on Jobs from Operations and Capital Expenditure

325,403 339,309 387,552 385,714 404,939 389,984 400,008

2,063 2,366 Jobs in Operations: PIPELINES (Annualised estimates including Suppliers)

1,420 1,620 1,771 1,882 1,987

TARGETS

YTD MAY (2011/12)

2012 2013 2014 2015 2016

• YTD estimates are annualised

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DELIVERY OF SKILLS

9

Technical and functional skills training accounts for 76% of all training undertaken by Transnet

75.9%

5.6%0.9%2.2%1.5%

1.2%

1.5%

1.9%

9.3%

Technical and functional

Health and safety

Leadership and management

Supervisory

Administrative

Customer service andcommunication

IT

ABET

Other

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SKILLS DELIVERY: TRAINING CENTRE THROUGHPUT

• Current functional training and planned intakes of the various schools are as follows:

• School of Port Terminals currently have no dedicated training facilities, with the majority of training

being delivered in the workplace, but anticipate increasing delivery by 48% over the next 5 years.

* School of Rail Engineering excludes Apprentice training that will maintain an average of 2,600 learners

in the system, and will accelerate outputs by the year 2014 when the first group of additional 1,000

learners complete their qualification.

School Learner types 2011 Baseline

2012 2013 2014 2015 2016

Port Terminals

Artisans, Lifting equipment, Planners, Cargo Co-ordinators

3,628

3,737

3,849

3,964

4,083

4,205

Ports Marine, commercial, support services

2,275

2,343

2,413

2,485

2,560

2,637

Rail Range of Train Movement, operations and professional support staff

5,849

6,024

6,205

6,391

6,583

6,780

Rail Engineering

Artisans and Technical 6,500*

6,695

6,896

7,103

7,316

7,535

TCP  Perway, Safety, Track Master 2,014

2,074

2,136

2,200

2,266

2,334

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DELIVERY OF SKILLS IN TRANSNET

Transnet currently has six training schools delivering technical and operational training as follows:

The current average utilisation of the training schools is 66%

School of Rail

TFR

• 8 Campuses Nationally spread

• Rail operations training e.g:

• Train Drivers

• Train Control

• Yard operations

School of Port Terminals

TPT

• 1 Campus in Durban

• Port operations training e.g:

• Operators of Lifting Equipment

• Cargo Coordination

• Drivers

School of Ports

TNPA

• 1 Campus in Durban

• Port authority training e.g:

• Marine Pilot• Tug-master• Vessel Traffic

services• Marine

Global Best Practice

School of Pipelines

TPL

• 1 Campus in Durban

• Pipeline operations training e.g:

• Pipeline Controllers, Coordinators and Planners

School of Engineering

TRE

• 19 Campuses Nationally Spread

• Custodian for Artisan training for Transnet

• Technical rail engineering training e.g:

• Artisans• Trade Hands• Process

Workers

School of Leadership

Development

• Virtual school operating from Transnet Corporate Centre

• Co-ordination and governance of first line, supervisory and leadership development

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SKILLS DELIVERY – REQUIREMENT TO UPGRADE TRAINING FACILITIES

• Training facilities need to be upgraded to improve the quality of training delivery and

increase the intake of learners. The total requirement amounts to R 424m and is distributed

per Operating Division as follows:

• Port Terminals – R 50m;

• Ports – R 38m;

• Rail – R 197m; and

• Rail Engineering – R 139m.

• The funding will be utilised as follows:

• Creation of a pool of operators that is continuously available to terminals to increase

productivity, and in turn increase of port traffic in South African and the resultant

increase in jobs;

• An increase of 1,000 apprentices in 2012 and maintaining an average capacity of 2,600

learners in the system; and

• Accelerate the delivery of training of staff in train movement, yards, train control,

operational and professional support.

13

SKILLS DEVELOPMENT

14

SKILLS DEVELOPMENT TARGETS

Actual March 2011

ActualYTD May 2011

Target11/12

Target2012

Target2013

Target2014

Target2015

All Apprentices in system 1029 1869 1412 1412 1412 1412 1412

Apprentices new intake 840 500 500 500 500 500

All Technicians learners 356 289

Technicians learners new intake 152 180 180 180 180 180

All Engineer bursars 375 398

Engineer bursars new intake 60 60 60 60 60 60

Number of Sector Specific Critical* New entries

1,305 768 1,500 1,500 1,500 1,500 1,500

Percentage of total workforce undergoing all training

36% 28% 36% 39% 39% 39% 39%

Percentage of training spent 3.0% 2.2% 3.5% 3.5% 3.5% 3.5% 3.5%

Total Direct Jobs Created[1]

(Transnet Employee Numbers)55,519 56,208 59,254 59,831 61,649 61,769 61,520

* Sector Specific refer to core skills in Rail, Marine and Port•2011 baseline targets have been set as stretch targets, hence no difference in 2011 figures for stretch targets•Total training spent is based on total labour costs •Funding to upgrade facilities/resources could increase Artisan intake to 1000-2000 annually•Average spent per employee is R7,745 annually

15

PARTNERSHIP WITH OTHER STATE OWNED ENTERPRISES

• Transnet participates in the DPE Skills Development Forum. This forum

engages on skills development matters related to all SOEs such as:

– coordination and participation of SOEs in the Technical Skills

Business Partnership;

– participation in the Human Resource Development Technical Working

Group;

– coordination of sourcing funding from the National Skills Fund;

– sharing of training facilities in future; and

– sharing of relevant information.

• Transnet has conducted benchmarking exercises with SASOL, ESKOM

and TELKOM in relation to commonalities regarding bursary schemes,

study aids, tuition, allowances, student ratios and good practice.

16

EMPLOYMENT EQUITY

17

EMPLOYMENT EQUITY – UPDATE

Black Employees

Female Employees

Employees with Disabilities

Target 201375%

Target 201325%

Target 20131.3%

The Transnet Employment Equity progress against targets are depicted below:

18

EMPLOYMENT EQUITY – PEOPLE WITH DISABILITIES

The Transnet target of 1.3% was set to ensure that a significant shift is made from the current actual achievement of 0,8%. 

To enable this shift, the following interventions are in process: • Employee and Line Management engagement strategies to develop

understanding of the meaning of Disability and create an environment that supports People with Disabilities;

• Employees are encouraged to disclose their disabilities and where necessary provide  reasonable accommodation to employees who require it;

• Identifying positions within the organization that can be allocated to employees with  disabilities; and

• Accessibility audits to make the physical environment more accessible and accommodate disabilities.

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OVERVIEW: WORKFORCE PROFILE PER AGE AND RACE

0200400600800

10001200140016001800

17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65

White

Indian

Coloured

African

Transnet Workforce Profile by age and race category

• Average age of Transnet employee is 43 years• Approximately 6500 employees are above 55 years of age. The majority

of these employees are semi skilled and general workers (approximately 75%)

• Focused employment equity initiatives has resulted in a change in the workforce profile with young employees and new recruits being more African 19

MITIGATING RISKS GOING FORWARD

21

Identified Risks Mitigating FactorsLoss and insufficiency “high-end” technical skills

Institutionalise the Technical skills strategy that seeks to address risks in regard to engineering, technician and artisan skills

Loss of operational critical skills • Comprehensive skills analysis and planning• Monitoring of “critical skills pipelines”

development against delivery plan• Upgrade training facilities to accelerate

learner outputs and quality

• Ageing workforce;• Lack of workforce flexibility and;• Lack of career paths• Cross-divisional “skills poaching”

Introduction of a outcomes-based modular learning approach that facilitates establishing a competency-based reward model that promotes:-•Labour flexibility and multi-functional utilisation;•Career pathing;•Single grading structure and enhanced parity across ODs

• Lack of basic managerial competencies on coordination and first line management levels

• Introduction of development programmes at appropriate levels

THANK YOU

22

23

BACK – UP SLIDES

CURRENT WORKFORCE PROFILE PER GRADE LEVEL

• The low number of co-ordination and specialist skills (G and H levels) and high number of lower end skills (J, K and L) result in poor spans of control and poor discipline

• High demand on limited specialist skills contribute to high overtime spend and poor safety

L

K

J

I

H

G

F

E

D

C

B

A

Transnet workforce profile by grade and level

Grade Level

No of Employe

es

A 13

B 99

C 117

D 408

E 1,107

F 2,971

G 3,649

H 3,141

I 11,371

J 12,616

K 6,357

L 6,201

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• First Line Manager, Specialist and Coordination Levels increase (Levels G, H & I) allowing for:

• Increased capacity to drive volumes• Improved work hours : reduced overtime and safer work practices• Correct spans of control and better supervision• Career progression opportunities

Future Workforce ProfileCurrent Workforce Profile

LKJI

HGFEDCBA

Current employeesNew employees

LKJI

HGFEDCBA

WORKFORCE AND SKILLS PROFILE: CURRENT AND FUTURE

New recruits will focus on co-ordination and supervisory skills

Trainees & learners

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ENGINEERING BURSAR PIPELINES

Engineering Disciplines

1st Year 2nd Year 3rd Year 4th Year Total

Civil 13 26 44 44 127

Chemical 1 2 1 4

Electrical 18 21 23 21 83

Electronics 3 9 14 25 51

Industrial 3 4 12 11 30

Mechanical 14 18 14 6 52

Metallurgy 1 1 1 1 4

Mechatronics 0 0 2 3 5

Total 48 77 118 132 375

The table below depicts the current actual Engineering Bursar pipeline in Transnet.

* Refers to Academic Year

Academic success rate assumptions are:

• 86% of students progress to next academic level annually

• 10% of students redo academic year

• 4% drop out per annum

• Academic throughput of 70% over a 5 year period is in line with national benchmark

• New Intakes across academic years

* Refers to Academic Year

Academic success rate assumptions are:

• 86% of students progress to next academic level annually

• 10% of students redo academic year

• 4% drop out per annum

• Academic throughput of 70% over a 5 year period is in line with national benchmark

• New Intakes across academic years 25

ALLOCATION OF ENGINEERING PIPELINE PER OPERATING DIVISION

27

OD Civil %

Chemical %

Electrical %

Electronics/

Mechatronic %

Industrial %

Mechanical %

Metallurgy%

TFR 61 51 61 73 32 100

TRE 11 11 27 37

TNPA 19 25 5 3

TPT 1 6 11 20

TPL 75 3 4

TCP 19 24 17 4

• Allocation % dependent on business requirements per Organizational Division (OD) • Actual as on 31 March 2011

Partnerships with External Institutions

Field Progra

m

Type Provider Numbe

r

Custodian

Engineering Degrees

9 Fields

Full-time

Bursary

Universities with Engineering Faculties:

Cape Town, Johannesburg, Kwazulu Natal;

North West, Pretoria, Stellenbosch,

Witwatersrand

398 Group

People

Developmen

t

Engineering

Technician

Diplomas

9 Fields

Learnershi

p

Universities of Technology: Central, Durban,

Johannesburg, Mangosuthu, Nelson Mandela,

Cape Peninsula, Tswane, Vaal, Walter Sisulu

289 Group

People

Developmen

t

Artisan

Training

14

Artisan

Trades

Trade

Certificate

s

Midlands College Uitenhage, PE College (Port

Elizabeth), East London FET College,

Mangosuthu FET College (Durban), Coastal

FET College (Durban), Swindon FET College

(Durban), Catomanor FET (Durban), Pretoria

West, Tshwane South FET College, Centurion

FET College, Central Johannesburg College,

Ekurhuleni West College (Germiston), Good

Wood FET College, West Lake College, West

Coast FET College Saldanha, Motheo FET

College (Bloemfontein), Northern Cape FET

College (Kimberley)

331 Transnet

School of

Rail

Engineering

27

Partnerships with External Institutions

Field Program Type Provider Number Duration

Custodian

Leadership

Executive Leadership development

Contracts

Gordon Institute of Business StudiesINSEAD

6 12 weeks Group People Development

Innovative Leadership Competence for Rail Industry

No contract

International Railway Strategic Management Institute, Paris

Snr Mgt16

6 weeks in total on an annual

TFR

Navigator:Strategic OperationalEmergent

Contract Connemara Consulting Services 956 12 mnths until March 2012

Group People Development

28

Partnerships with External Institutions: Sector - Specific

Sector

Program Type Provider Number Custodian

Cargo Port Worker Development Worker Short Courses

License Fees

International Labour organization (ILO)

100 TPT

Mentorship & Operator Training

Contract Port management Container Services –Sri Lanka

37 TPT

Planner Training: Bulk & Break Bulk

Contract Hamburg Port Training Institution (HPTI)

30 TPT

Capital Projects

Contract Training

Contract Engineering Contract Strategies (ECS)

600 over period of 4 years

TCP

Trackmen & Track Master

Contract TSD Consulting Services (Pty) Ltd

45 TCP

Construction Industry Development Board (CIDB) Training

Contract Soderland and Schutter (Pty) Ltd

300 over period of 4 years

TCP

Driver Risk Assessment & Training: Transnet Vehicles

Contract Loribiz (Pty) Ltd t/a Enigma Training

350 TCP

29

Partnerships with External Institutions: Sector Specific

Sector Program Type Provider Number Custodian

Rail Engineering

Locomotive Systems Performance Maintenance

Contract University of Pretoria 60141 completed

TRE

ABET Contract Corporate College International

267 TRE

Soft Skills Training

Contract Bathopele Human Capital

1842 (operational levels)

TRE

Range of computer end user training &Education & Training Practitioner Development (ETDP)

Contract Mogale Solutions 1660 (operational levels)

TRE

30

Partnerships with External Institutions: Sector Specific

Sector Program Type Provider Number Custodian

Properties Property and facilities Mgt Training

Contract

Wits Enterprise (SAPOA- Property Education Training)

340 TProp

Procurement

Transnet Procurement Academy

Contract

Chartered Institute of Purchasing and Supply (CIPS)

70 Group Supply Chain Management

Marine Cadet Contracts

• Unicorn• SAMTRA• Marine Crew Services

33733

TNPA

31

Partnerships with External Institutions: Sector Specific

Sector Program Type Provider Number Custodian

Rail Operations

Logistics Contract University of Johannesburg 870 TFR

Railway Operations Qualifications Programme

Confinement of contract

Glasgow University & University of Johannesburg with Institute of Railway Operators

Initial 150 TFR

Business Simulation

Contract Business Today 30 TFR

32

Partnerships with External Institutions: Sponsorships

Field Program Type Provider Number Custodian

Engineering

Systems Engineering

Sponsorship University of Witwatersrand 1 Group People Management

Railway Engineering

Sponsorship University of Pretoria 1 TFR

Port and Coastal Engineering

Sponsorship Stellenbosch University 1 TNPA

Port management

Sponsorship of Seminars

Antwerp Flanders Port Training Centre (APEC)

76 TPT

33

Transnet has a nationwide training centre network

Richards Bay

Cape TownPort Elizabeth

Durban

Saldanha

East London

Johannesburg

Kimberley

Nelspruit

Polokwane

Bellville

Bayhead

EmpangeniPinetown

Mossel Bay

Pretoria

Koedoespoort

Uitenhage

Bloemfontein

Salt River

TRANSNET TRAINING CENTRES

Port Academy

TRE TC

TFR CentresMigrated to TRE

TFR TC ( Incl TFR Esselen Park)

Esselenpark TC

7 technical training centres

12 Traction, 7 wagons, Saldanha technical

4 Functional, 9 TPD, 6 EL&P, 1 OHTE, Saldanha functional

6 centres: Rail operations, OHTE & substations, Mechanical, Perways , Cross

Functional, Signals

TC 7 technical training centres

12 Traction, 7 wagons, Saldanha technical

4 Functional, 9 TPD, 6 EL&P, 1 OHTE, Saldanha functional

6 centres: Rail operations, OHTE & substations, Mechanical, Perways , Cross

34