ECONOMIC DEVELOPMENT STRATEGY
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
A
ECONOMIC DEVELOPMENT STRATEGY
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
CONTENTS
INTRODUCTION
2
OUR VISION
2
ED DEPARTMENT MISSION
3
TRAILBLAZING
3
BUSINESS RATIONALE FOR ED
3
ED ELEMENTS
4
LOCAL CONTENT
5
Introduction
5
Local content definition
5
Local content commitments6
Local factory
7
Local sourcing
8
Localisation approach
10
Supplier park
10
Local assembly
10
Local overheads
10
Product evolution facility
10
SKILLS DEVELOPMENT
12
Introduction
12
Training with a difference
12
Skills development initiates
12
SOCIO-ECONOMIC DEVELOPMENT
14
Introduction
14
Objectives
14
Socio-economic development strategy
14
Sed initiatives
15
EMPLOYMENT EQUITY & JOB CREATION
17
Introduction
17
17
18
18
18
19
19
19
19
19
20
20
21
21
21
21
21
21
22
23
23
25
26
26
27
28
28
29
Job creation targets
Job creation strategy
Recruitment of labour
Liaison with designated community leadership/s stakeholders
PREFERENTIAL PROCUREMENT
Introduction
Preferential procurement commitments
Preferential procurement by the project company
Preferential procurement by suppliers
Scope of the preferential procurement policy
Preferential procurement tactics
ENTERPRISE DEVELOPMENT
Introduction
Objectives
Enterprise development approach
Main business areas considered for enterprises development
Gibela business enterprise model
Enterprise development strategic requirements
Enterprise development programmes
Enterprise development initiatives
CRITICAL SUCCESS FACTOR
APPENDICES
GLOBAL SUPPLIERS LOCALISING
LOCAL SUPPLIERS
LOCAL SUPPLIERS AND FOREIGN SUPPLIERS
LOCAL SUPPLIERS WITH FOREIGN SUPPLIERS
IMPORTED COMPONENTS
GIBELA 2016. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is
complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is
subject to change without notice. Reproduction, use or disclosure to third parties, without express written authority, is strictly prohibited.
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
1
INTRODUCTION
In order to meet the company’s economic development (ED) contractual
obligations and to advance economic transformation, Gibela is committed to
becoming a trailblazer in ED by building an integrated and focused strategy
to ensure that implementation can happen in a coherent and sustainable
manner. Underpinning the strategy will be an implementation plan that
will give details of the specific initiatives that have been outlined in this
document.
The following contractual and legislative frameworks play a significant role in
informing our approach to ED:
•Manufacturing Supply Agreement (MSA)/Technical Support and Spares
Supply Agreement Contract (TSSSA)
•The Employment Equity Act
•The Skills Development Act
•The Broad-Based Black Economic Empowerment Act
•The amended Broad-Based Black Economic Empowerment Codes
Our approach to transformation, although informed by these regulatory
frameworks, is underpinned by the fundamental belief that ED is a strategic
imperative to ensure that we are able to thrive, grow and contribute to the
broader economic transformation of South Africa.
The effective execution of our ED strategy is a critical element in building for
sustainability. To this end a robust implementation plan has been developed
to support effective execution. Our implementation plans are guided by the
quarterly obligations of the contract.
OUR VISION
Gibela’s vision is to lead the
REVITILISATION of the South African
railway sector and become a CATALYST in
PRASA’s endeavours to elevate commuter
rail as a TRANSPORT MODE OF CHOICE for
ALL people in the urban areas.
“Our rationale for ED is
based on the need to support
government in its quest for
economic transformation”
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GIBELA | ECONOMIC DEVELOPMENT STRATEGY
In keeping with Gibela’s vision all ED
activities will be tested for strategic fit.
Activities will be tested to ensure they are
creating a revitalised railway value chain
at lowest cost and highest impact.
ED DEPARTMENT MISSION
BUSINESS RATIONALE FOR ED
“What we do and why we exist?”
Gibela’s rationale for ED is based on its contractual obligations to PRASA and
the need to support the government of South Africa in its quest for economic
transformation as summarised below:
•To ensure that all aspects of the ED contractual requirements are met.
•To define the ED strategy across all activities / departments.
•To anticipate/forecast ED and for the computation and consolidation
of the data mastered by all other departments of Gibela.
•To embed ED and the culture of compliance in the organisation.
•To drive ED execution by permanently challenging Gibela (including
suppliers) to define new avenues for all aspects of ED, including the
execution of externally focussed programmes.
•Promoting localisation of products and services in South Africa.
•Achieving a substantial change in the racial composition of ownership and
management structures and in the skilled occupations of existing and new
enterprises.
•Promoting access to finance for black businesses.
•Empowering local communities by enabling their access to economic
activities, infrastructure, ownership and skills.
•Promoting human resource development of black people through, for
example, mentorships, learnership and internships.
TRAILBLAZING
•Assisting in the development of the operational and financial capacity
of B-BBEE enterprises, especially small, medium and micro enterprises
(SMMEs) and black- owned enterprises.
Trailblazer noun trail·blaz·er \’trāl-,blā-zәr\: a person who
makes, does, or discovers something new and makes it acceptable
or popular: a person who marks or prepares a trail through a
forest or field for other people to follow.
•Facilitating access to economic activities, infrastructure and skills training
for existing and new enterprises owned and managed by black women.
A few perspectives follow from this definition:
•It can be argued that the contract commitments placed on Gibela
supported by the ED plans, create a requirement to be trailblazing as we are
establishing a sustainable railway industry in the country, which is very new
ground.
•The customer essentially requires a revitalised railway value chain as an
outcome, not necessarily an innovative process to get there.
•Hence the key test of trailblazing that follows from this is: “Is this activity
creating a revitalised railway value chain?”
•The implementation of these themes might in themselves not be
trailblazing, but the sum of these themes achieves the vision and
economic development intent of the customer, which is trailblazing
in nature as we are creating a local railway industry.
OUR VALUES
TRUST AND
RESPECT
TEAMWORK AND
PARTNERSHIP
FOCUS AND
DRIVE
INFLUENCE
THE FUTURE
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
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ED ELEMENTS
ECONOMIC DEVELOPMENT
PART 1, PRASA
SPECIFIC
REQUIREMENTS
1
PART 2, BASED
ON SOUTH
AFRICAN BBBEE
OBLIGATIONS
1
Local content
2
Skills development
3
Job creation
4
Ownership
5
Management control
6
Employment equity
7
Preferential procurement
8
Enterprise development
9
Socio-economic
development
Skills development
5
Job creation
Job creation is one of the imperatives of Government in the
rollout of infrastructure programmes. Government’s intention
is for the investment in infrastructure to leave more than just
trains, it must boost employment. Gibela is going to create
jobs for South African citizens, specifically black people
including black women, black youth and black people with
disabilities.
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GIBELA | ECONOMIC DEVELOPMENT STRATEGY
Management control
This element addresses the representation of black people
in top and senior management. Gibela has committed to
increasing the number of black people and black women in
top and senior management. Gibela will demonstrate genuine
participation of the designated groups in decision-making at
board, executive management and operations levels.
6
Employment equity
Employment Equity focuses on bringing about an equitable
representation of black people in all occupations and at
all levels of the organisation over a period of time. The
involvement of black people at operational and professional
levels is at the core of Gibela’s strategy.
7
Preferential procurement
In order to grow our economy, more enterprises are needed to
produce value-added goods and services, to attract investment,
and to employ more of our people in productive activities.
Preferential procurement is there to facilitate the participation
of B-BBEE-compliant suppliers, qualifying small enterprises and
exempted micro enterprises in the supply chain.
8
This relates to the contributions made to develop skills in
the railway and related local industries with the objective of
creating a sustainable and competitive local railway industry.
This may include activities such as sponsoring bursaries for
railway industry specific artisans, engineers, technologists or
technicians and building an industry-related training centre.
3
Ownership
PRASA is seeking to contribute to the railway sector and create
an industry which has significant control and management by
black people and black enterprises. Gibela has committed to
empowering black people to own and manage enterprises.
Local content
Local content means the aggregate monetary value expended
in relation to ED programme activities comprising local
sourcing, local overheads, local raw materials, local assembly,
local services, any incurred spend related to the local factory,
product evolution facility, railway-related skills development,
any other investments that aid the development of the railway
or related industries in South Africa and local taxes, excluding
any amounts in relation to the Contractor’s margins applied in
relation to the costs that it incurred.
2
4
Enterprise development
This element talks to investment in black-owned and blackempowered businesses. These investments must be real
economic benefits flowing to the recipient enterprise to enable
it to be set up and run on a sustainable basis. This should lead
to sustainable business enterprises that achieve growth, create
jobs and contribute towards economic growth.
9
Socio-economic development
Our investment programmes focus on areas where we
believe we can add the most value and make a significant
and lasting impact. Gibela has prioritised educational, health,
environmental and agricultural projects.
LOCAL CONTENT
INTRODUCTION
In light of three decades of under investment in the railwayrelated manufacturing industry, many companies which were
operating in that sector have either closed down or have, of
necessity, made investments in other areas of the manufacturing
sector in order to continue to operate.
With this reality in mind, Gibela has developed a plan to build local content in
South Africa through the main below initiatives:
•delivery of a sourcing programme which will maximise the level of local
content, with a robust industrial structure to deliver South African made
electric multiple units (EMUs) to the highest international standards.
This will contribute significantly towards revitalising railway-related local
manufacturing industries;
•establishment of a fully capacitated local factory in South Africa for the
manufacture of Rolling Stock;
LOCAL CONTENT DEFINITION
•Local Content % = Local Content Expenditure/Annual
Contract Expenditure
Local means an individual or item originating from, or domiciled
and registered within the geographical boundaries of South
Africa.
Local content means the aggregate monetary value expended in relation
to the programme activities comprising local sourcing, local overheads,
local raw materials, local assembly, local services, any incurred spend
related to the local factory, product evolution facility, railway-related
skills development, any other investments that aid the development of
the railway or related industries in South Africa and local taxes, excluding any
amounts in relation to the contractor’s margins applied in relation to the costs
that it incurred.
•delivery of a large number of local jobs created and maintained – as
part of Gibela’s mandate to contribute to PRASA’s commitment to create
sustainable jobs and in turn, aligns with the New Growth Path; and
•delivery of a robust skills development programme, which develops skills
and creates capacity at various technical levels within the railway and
associated sectors.
Gibela’s approach to local content has been built as a result of a global
expansion programme that has seen extensive investment by its main
shareholder, Alstom, in many countries around the world. To this end, Alstom
has made similar investments in a number of countries around the world,
including:
•investment in a production facility in Chennai, India;
•a joint venture partnership in Russia;
•investment in a Centre of Excellence in Brazil; and
•investment in a manufacturing facility in China.
Alstom has also re-aligned its global strategy to identify global Centres of
Excellence where certain components are manufactured in specific countries
for the use of those components in the global rollout of its operations. For
example, the production facility in Lapa in Brazil is the Centre of Excellence for
Stainless Steel.
For some components which are required but are not available in South
Africa, Gibela has identified capacity for building new and existing businesses
to manufacture in South Africa, as further described in the Enterprise
Development Plan.
The establishment of the new factory in Dunnottar will have a significant
positive impact on the local content percentage through construction activities
and investment in equipment and facilities inherent in this undertaking.
Gibela’s approach to building local content is underpinned by the objective of
revitalising the South African railway industry. The identified, and for some of
them awarded for a portion of the total contract, suppliers of the project are
enterprises currently operating in or manufacturing equipment for the railway
industry, while others will redirect their activities to focus on railway. The building
of the local factory provides the opportunity to boost the local construction
industry, and in turn contributing to Gibela’s local content commitment.
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
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LOCAL CONTENT continued
Annual Contract Expenditure means operational, capital, and taxation expenditure in accordance with generally accepted accounting practice in South Africa
(excluding any penalties, interest or additional taxes arising from or attributable to the failure by the contractor to comply with any of its obligations under this
agreement or in law) accruing in a delivery year in relation to the contractor’s performance of its obligations under this agreement, but excluding finance raised,
debt service, debt service costs, non-cash expenditure such as depreciation and any amount spent in respect of additional Items.
LOCAL CONTENT COMMITMENTS
Gibela is committed to achieve the following commitments:
MANUFACTURING SUPPLY AGREEMENT
Delivery year (DY)
Local content percentage
1&2
43.3%
3
67%
4
69%
5
69%
6
69%
7
72%
8
72%
9
72%
10
72%
11
75%
These commitments will be met through an ambitious localisation ramp-up, driven by the construction of a factory in South Africa where Gibela will manufacture
580 of the 600 trains (97%).
The localisation ramp-up will be as follows:
Local content element
Local content commitment
DY 1& 2 DY3
43.3%
67%
Local content contributors
Local factory
Construction
100%
Machinery
Employees
Local sourcing
Local assembly
Local overheads
PEF
Rail-related skills development
100%
99%
23%
99%
70%
78%
100%
99%
45.8%
99%
70%
78%
100%
DY4
69%
DY 5
69%
DY 6
69%
DY 7
72%
DY 8
72%
DY 9
72%
DY10
72%
DY11
75%
99%
50.6%
99%
70%
78%
100%
99%
55.1%
99%
70%
78%
100%
99%
56%
99%
70%
80%
100%
99%
57.4%
99%
70%
80%
100%
99%
57.4%
99%
70%
80%
100%
99%
57.4%
99%
70%
80%
100%
99%
57.4%
99%
70%
80%
100%
99%
57.4%
99%
70%
80%
100%
9
11
TECHNICAL SUPPORT AND SPARES SUPPLY AGREEMENT
Delivery year (DY)
Local content percentage
6
1
2
3
4
5
6
7
8
10
12
13
14
15
16
17
18
19
50% 85% 92% 89% 87% 84% 81% 78% 72% 76% 76% 74% 75% 72% 72% 72% 71% 71% 71%
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
LOCAL FACTORY
STAFF RECRUITMENT PROCESS
Gibela will initiate the revitalisation of local South African railway capacity
through the construction of a new factory, integrating the main manufacturing
activities required to assemble a train. This factory will integrate all Alstom
Transport’s best practices and processes already in place in reference to
Alstom Transport sites, to develop one of the largest, most efficient and fully
integrated train manufacturing sites in the world.
Job creation is defined as the creation of jobs to assist members of the local
population in securing sustainable employment. This includes both temporary
and permanent employment opportunities that are created directly from
implementing the project.
Gibela will develop the following activities in its local factory:
•stainless steel car body shell manufacturing;
•warehouse and fitting workshops;
•coupling and static test workshop; and
•dynamic tests and start of the customer acceptance cycle.
Gibela understands the need for job creation benefiting the local
communities. Recruiting preference will be given to South African citizens in
accordance with Gibela’s economic development obligations.
In order to achieve the objectives and committed targets, Gibela will
implement the following initiatives in order to create opportunities to enhance
the employability of South African citizens:
•secondments and special training focused on acquiring knowledge, skills
and experience;
•on-the-job-training;
REQUIRED STAFFING ON-SITE
•experiential learning for graduate students;
Based on the perimeter of activity of the local factory to be raised for the
manufacturing of 600 trains, the required staffing is as follows:
•learnerships;
•±300 people in site management and support functions (including shop
floor support functions);
•bursaries.
•±900 people in workshop operations (from operators to artisans, foremen
and shop floor management); and
•±200 people for support services (catering, cleaning, site security and
people transportation).
Furthermore, the entire staffing database is available in the master hiring and
training plan, considering the following:
•full workforce details striving for full-time job creation;
•people profile: citizenship, race, gender, disability and youth eligibility;
•occupational level on-site, position and grade;
•scarce skills integration identification;
•hiring planning;
•adult education and training; and
The labour for local manufacturing and construction of the local factory
will be sourced from the Ekurhuleni municipality, focusing on the following
communities but not limited to: Vosloorus, Katlehong, Kwa-Thema Thokoza,
Tsakane, Duduza, Tembisa, Daveyton, Daggafontein and Benoni.
A Recruitment Officer will be employed to execute the following tasks:
•interview and screen applicants;
•establish and maintain a register/database of general labour for
construction and local manufacturing related job seekers from the
surrounding communities;
•monitor recruitment-related movements and compile a monthly report for
submission to management; and
•develop an initial register of job seekers. Subsequent monthly updates
thereof will be submitted to management.
•business plan data: salary budget, direct or indirect (POH) repartition; and
•training planning for the initial team, described in the Transfer of Technology
section of the Skills Development Plan on page 12.
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
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LOCAL CONTENT continued
LOCAL SOURCING
Local sourcing means the procurement of local goods and services or suppliers from, permanent residents, citizens of or organisations
based and registered in South Africa.
SOURCING PROCESS
The Gibela sourcing process has been adapted to the obligations of the project such as economic development.
STEP 1
STEP 2
STEP 3
STEP 4
We identify potential
suppliers
We assess potential suppliers
We ask potential suppliers for
quotations
We audit potential suppliers
•Our search is for potential new
South African suppliers
•When you are accepted as a
potential supplier, we may do a
quick industrial assessment
•We then ask you to supply a
quotation for your product or
service
•Once we have your quotation,
we conduct audits to assess, for
example, your:
•We will visit your business for
half a day to assess its ability to
provide the product or service
we require
•To quote, we give you a pack of
documents to complete
•Apply to register as a potential
supplier on the Gibela website,
www.gibela-rail.com
•We assess your application
•We let you know if your
application has been successful
•Queries: email us at sourcing.
[email protected]
•Your business must score at least
10 out of 20 points
•If it does not but it has potential,
we ask you for an action plan to
improve the score
•If it does, we sign a nondisclosure agreement
•We ask you to answer various
questions; for example, about:
• the financial performance of
your business
• technical capabilities
• commitments to economic
development
•It is very important you provide
all of the information we require
• quality management system
• supply chain and production
process
• health, safety and
environmental procedures
• special processes – for
example: welding, painting
•You must score at least 80 out of
100 points
•If you score less than 80, we
ask you for an action plan to
improve your score
•If you score more than 80, we
move to the next step
Ongoing
2 weeks
6 weeks
12 weeks
As mentioned above, local content and ED requirements are fully integrated in the contracting process. Specific ED-related clauses have been included into the
core of the Project Purchase Agreement, to be read together with a specific appendix where commitments, obligations and penalty mechanisms for the suppliers
are detailed. Refer to Appendix 2 of this LCP.
Note that the process is supported by the fact that specific targets have been given to suppliers, commodity by commodity, for localisation, including the Specified
Component List.
To conduct this process, a dedicated Sourcing / ED team has been set up in South Africa to support local panel assessment and business awards.
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GIBELA | ECONOMIC DEVELOPMENT STRATEGY
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EASY
STEPS
STEP 5
STEP 6
STEP 7
STEP 8
We select suppliers
We finalise contracts with
selected suppliers
Suppliers start limited
manufacturing
We give the go-ahead for full
production
•We identify a short-list of
potential suppliers for each
product or service
•We finalise a contract with the
successful supplier
•This step applies to
manufacturers only
•The terms of the contract refer
to the information we required
in Step 3
•We make sure the manufacturer
has everything in place –
equipment, trained staff, etc – to
start manufacturing
•We assess the limited production
to ensure the product is being
manufactured consistently to the
standard we require
•We assess them on various
criteria, for example:
• quality
• technical competency
• cost
• commitment to economic
development
•Once the contract is finalised, we
place a purchase order with the
supplier
•If we are not happy, we ask for
an action plan to address our
concerns
•If Gibela is happy with the product
sample, this becomes the final
product version; we give the goahead for limited manufacturing
•This is an internal, impartial
assessment
•We then select the supplier we
believe is best
6 weeks
•Manufacturing begins on a test
basis to make some product
samples
•If Gibela is happy, we will give
the go-ahead for full production
•If we are not happy, we ask the
manufacturer for an action plan
to address our concerns
4 weeks
Timing depends
on complexity
2 weeks
LEGEND
SOURCING QUALITY TIMING
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
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LOCAL CONTENT continued
LOCALISATION APPROACH
The localisation approach is focused on maximising local content through the following tactics:
Category
Local companies
International companies
Alstom localisation
Creation of new
companies
Tactic
Local company increasing
capacity
Company opening operations
in SA
Alstom transferring activities to
AT South Africa
Creation of new local companies
Quality maturity development
Transfer of technology
Alstom partnering with a local
company
Developing small businesses
Training of employees
International company
partnering with a local company
Transfer of technology
Operational and business
development
Investments made e.g.
manufacturing plant, tools
Skills transfer
Skills transfer
-
The following activities support localisation:
•dedicated meetings on ED with internal teams;
•design to localisation: technical teams have adapted design to ensure
proper localisation;
•for technologies to be localised for the first time, a detailed validation plan
has been provided by the suppliers;
•major suppliers have provided a list of their potential local supplier panel
(tier-2 suppliers); and
•each supplier has deployed a dedicated team in South Africa to assess and
start its supplier panel development. Components will be localised step-bystep, depending on their complexity and availability in South Africa.
SUPPLIER PARK
Besides the local factory, Gibela will rely on a close relationship and share
of industrial activities with its main sourcing partners. In order to ease
capacity increase (with existing local partners), localisation (with international
partners willing to develop activities locally in the course of the project)
and ED (notably for new businesses to develop), Gibela intends to drive the
development of a supplier park as close as possible to the main site.
LOCAL ASSEMBLY
The local assembly activities will be performed by Gibela employees. However,
potential business opportunities for qualifying small enterprises and black
women-owned enterprises have been identified and include as examples floor
preparation, window installation, piping kitting, cable preparations, looming
and harnessing and electrical cabinets rack enclosure. Permanent analysis
is ongoing. The preferential procurement and enterprise development plans
provide further detail.
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GIBELA | ECONOMIC DEVELOPMENT STRATEGY
LOCAL OVERHEADS
The main overhead cost drivers will be the factory running costs which will
mainly consist of:
•production consumables;
•plant maintenance;
•plant insurance; and
•utilities.
The local overheads procurement will give preference, where possible, to
local suppliers in line with the Preferential Procurement Plan and Enterprise
Development Plan.
PRODUCT EVOLUTION FACILITY
Gibela will hire and train an engineering team that will
constitute the Product Evolution Facility.
The first members of this team have already been employed, with the first
South African engineers integrated into the French and Brazilian design teams.
The aim is for this team to be developed as per the project schedule so that
the intellectual property (IP) of the OEM in relation to the specific EMUs can
be managed by the team as the targeted design authority.
At least 80% of the South African people on the team will then develop
their ability to design integration of a full train. The capacitation of the
Product Evolution Facility in relation to the project and in relation to the
local employees will occur simultaneously, including the general transfer of
technology and skills development programme, as described in detail in the
Skills Development Plan.
“Our approach to localisation is to
increase local capacity, train employees
and make investments in infrastructure”
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
11
SKILLS DEVELOPMENT
INTRODUCTION
TRAINING WITH A DIFFERENCE
Gibela is committed to the development of South Africa and the revitalisation
of the railway industry. In order for this to be accomplished, Gibela, as well
as the factory contractor and Gibela’s suppliers, and their suppliers, will make
significant investments in skills development.
Skills development is not new in South African industries; however Gibela’s
differentiation factors are as follows:
Investment in skills development underpins the objective of creating
sustainable jobs which are essential for supporting the creation of a
sustainable rolling stock manufacturing industry. Gibela has made extensive
commitments with regard to job creation, management control and
employment equity for this project for the duration of the MSA.
•Training commitments are very high (+19 000 people will receive training)
and are focused on scarce skills required by the value chain. Gibela will
make a difference to a larger population and strengthen local railway
“know how”.
•Gibela will open the door of its Training Centre to community members to
capacitate unemployed people with scarce skills to improve their chance of
employment.
Gibela is committed to upskilling employees through a combination of the
following:
•To create the skills reserve for manufacturing industry at no cost to existing
industries.
•The implementation of a proven and accredited internationally accepted
skills development programme implemented and managed by Alstom,
Gibela’s technical and OEM partner.
•Attract young people to the railway industry by providing real opportunities,
such as bursaries and on-the-job training.
•Awarding bursaries to South Africans, and in particular black people
and black women, to become engineering technicians and engineering
professionals, as described on the railway industry scarce and critical skills
list and into the broader industry.
•Approximately 5% of people working in the factory (particularly for the
MSA) will be learners, whose learnerships are aligned with the relevant
SETAs and the DTI Codes of Good Practice.
•The transfer of OEM technology to build value throughout the supply
chain. As the majority of the suppliers are based in South Africa, and the
South African railway industry has been severely hampered by a lack of
investment over the past few decades, a modern Centre of Excellence in
Technology will be built by Gibela, to house the technology brought to
the project by Alstom over the period of the contract. This includes an
autonomous team of product engineering and supplier development. This
is complemented by a large training centre for new recruits as well as to
maintain and develop the qualifications of current employees.
SKILLS DEVELOPMENT INITIATIVES
TRANSFER OF TECHNOLOGY (TOT)
The purpose, principles and guidance of the technology transfer schemes are
based on the extensive experience of Alstom, Gibela’s majority shareholder.
The ToT process requires two partners:
1.The “donor” or “transferor”: the reference site managing
the transfer.
2.The “receiver” or “transferee”: the site benefitting from the
transfer.
ToT is structured in two main stages:
1.Training: implemented on a reference site for the considered
activity.
The reference site would train South Africans on the PRASA product and
specification, design and manufacturing, processing, quality, control and
testing.
•Multiple training sessions over the duration of the contract.
2.Assistance: made on the receiving site, to support ramp-up and
autonomy.
Skills development obligations are classified as:
Alstom sites would support Gibela employees with the following:
•Rail-related skills development expenditure for South African citizens which
includes training costs on all employees and non-employees.
• On-site induction after off-shore training.
•B-BBEE skills development expenditure for black South Africans as defined
in the B-BBEE Act.
Commitments
Rail-related skills development spend
(% of the contract value)
Total number of individuals skilled in
rail-related skills
B-BBEE skills development expenditure
12
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
MSA
TSSSA
1.75%
0.5%
19,527
582
1.55%
0.37%
• S upervising application of processes, procedures and other support
documentation taught during off-shore training.
The perimeter of the ToT focuses on ensuring proper knowledge of the
transferee to manufacture quality trains at the proper capacity.
OTHER BASIC SKILLS TRAINING
While ToT deals with the detailed operational requirements (product
knowledge and manufacturing know-how), this section addresses key
business-related training sessions. Railway operations require a particular
approach and know-how about support functions that even a skilled
specialist in the domain cannot gain from experience in other sectors.
MANUFACTURING TEAM COMPLEMENT INTEGRATION
Once the core team is trained, additional people will need to join the site to
guarantee its required capacity and performance. It is the integration process
– including single job basic training – which allows the newcomer to become
operational as quickly and efficiently as possible. To address the aggressive
local ramp-up targeted, additional support to complement the usual ToT
teams has been put in place.
PERMANENT TEAM DEDICATED TO TRAINING
Based on all the above, a permanent team will be dedicated on-site for
training: one experienced Training Manager (ideally from the railway sector),
supported by four Training Coordinators, overseeing the Training Centres’ daily
activity and facilitating whole training sessions organisation and logistics.
ON-SITE TRAINING CENTRE
To ensure that the required levels of training and qualification are available in
the workforce, the new factory will have its own Training Centre. It will include
not only the required number of classrooms, but also a specific training
workshop, equipped for the required qualifications, a key example being the
welding school.
to secure collaboration in the following: Project management in railway,
reliability, availability, maintainability and safety (RAMS).
APPRENTICESHIPS
Gibela relies extensively on the sustainability of knowledge and skills. One
of the core means of addressing this is to support the permanent presence
of young people within the company, to develop them internally, and
complement their academic curriculum. The usual profiles depend on each
country’s academic structure, but covers the full profile ranging from operators
to engineers.
BURSARIES
In addition to apprentices, another means to generate a reservoir of talent
is supporting their academic studies, whilst addressing existing national
competency gaps.
PEOPLE DEVELOPMENT PROGRAMME
Facilities will be dedicated to support employees showing interest in raising
their academic level through classes outside their working hours, either within
the on-site Training Centre and/or at appropriate training centres, or through
local universities.
ATTRITION RENEWAL / MANAGING WORKFORCE
TURNOVER
Human resources market benchmarks show a yearly attrition levels of bluecollar workers to be around 10%. The same amount of people need then to
be re-hired to secure the manufacturing capacity. They will follow the same
integration programme as described in “Manufacturing team complement
integration” above. Only half of the attrition is considered here, the rest is
addressed in the “Apprenticeships” section below.
QUALIFICATION RENEWAL
A certain number of special processes are required to manufacture trains.
Each of them, in addition to the training, requires that each artisan possesses
a qualification that needs to be renewed on a yearly basis.
ANNUAL TRAINING AND “RE-INDUCTION”
In order to keep new site workforce operational and to secure their skills
levels, an annual training programme of at least one week per employee will
be set. This shall include some “re-induction” after the summer break, for
specific sensitive activities.
R&D IN RAILWAYS
In order to build competencies beyond those required for the manufacturing
site, the development of a rail-related research and development (R&D)
programme is under preparation with TUT (Tshwane University of Technology)
“Gibela is committed to the
revitalisation of the railway
industry.”
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
13
SOCIO-ECONOMIC DEVELOPMENT
INTRODUCTION
Gibela’s commitments will have a positive socio-economic
impact on the communities surrounding the Dunnottar factory
site. Gibela notes that the ten-year MSA and the nineteen year
TSSSA periods afford it the benefit of taking a long-term view
of community development, and as such its socio-economic
development (SED) initiatives will focus on having a sustainable
impact and leaving a lasting social legacy.
It will seek to support programmes and projects that are legitimately
developmental, as opposed to those which are simply short term or
superficial, build unsustainable dependency or do not add lasting socioeconomic value.
Gibela’s SED core objectives:
•Improve the ability of the beneficiary communities to prepare for, compete
in, and benefit from the changing global economy including, but not
limited to its emphasis on high-level strategic and technology-driven
manufacturing.
•Increase the number of learners entering the local labour force each
year with the knowledge, motivation and qualifications needed to gain
sustainable employment, especially in higher skills sectors that add greater
economic value.
•Expand and diversify economic participation in beneficiary communities.
SOCIO-ECONOMIC DEVELOPMENT
STRATEGY
The strategy and its implementation are fully owned by Gibela. While
the selection of individual projects will be informed to a certain extent
by changing conditions amongst the communities and key community
stakeholders, the use of Gibela’s SED funding shall be inherently strategic and
specifically focussed on effecting long lasting socio-economic change: it is not
for the ad hoc funding of “pet projects”.
On the basis of the community assessment, Gibela has conceptualised and
designed a SED Strategy that:
Gibela believes that these activities promote positive interaction between
the community and the company, and promote a sense of volunteerism and
community mindedness amongst the projects’ employees. These initiatives
will be considered by Gibela on a case-by-case basis, and will be carefully
documented for the purposes of SED valuation.
•is broadly aligned with Gibela’s core business and corporate values.
In all cases, the strategic objective of Gibela’s SED investment is to promote
the empowerment and upliftment of previously disadvantaged communities
surrounding the factory site.
Gibela’s SED strategy has been designed in such way that the developmental
dividends shall extend beyond Gibela’s value chain and accrue to the wider
community.
OBJECTIVES
The strategic aim of Gibela’s SED investments is to improve the long-term
economic vitality of the beneficiary communities, as defined by their ability to
attract and retain employment and by their human resource utilisation. Gibela
believes that the key to reducing poverty and unemployment and unlocking
the community’s economic potential is enhancing their human capital, and
the SED strategy has been developed and will be implemented, with this
strategic objective in mind.
14
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
•seeks to address significant community development gaps;
•leverages the community’s inherent assets;
•dds long-term and long-lasting socio-economic value to the communities; and
Community development is a fluid exercise and the context of the
communities and the regional, national and international circumstances
around them are constantly changing. As such, Gibela’s SED strategy will
also evolve over time to best suit the changing needs of the beneficiary
community. Consequently, this strategy document is not, nor is it intended to
be, an absolute prescription for Gibela’s SED investments over the full-term
of both the MSA and the TSSSA periods. While it represents a roadmap based
on the circumstances as observed at present, those circumstances – and the
roadmap – may change over time.
Gibela’s strategy is broken into two distinct streams:
1. B roadly increasing the overall level of education: This is designed around
improving or reducing the education and training gap experienced in the
community from pre-primary level, through primary, secondary and at
tertiary education levels. Gibela takes a long-term and strategic approach
to improving communities’ human capital, focusing investments and
improving local education outcomes, improving the local skills base, and
income generation capacity.
2. Improving the overall quality of life of beneficiary communities: this stream
is designed around effecting improvement in the quality of life of the
nearby communities. This addresses health, environmental sustainability
and community development centres.
SED INITIATIVES
•Early childhood development
•Partnerships with local/
provinsial goverments to
address the country’s primary
healthcare challenges
•Maths and science saturday schools
•Teacher development
•Bursaries
EDUCATION
HEALTH
~ R300 million
•Agri-processing
•Vegetable farming
•Tree planting
ENVIRONMENTAL
SUSTAINABILITY
COMMUNITY
CENTRES
•Partnership with the local
government in development
of the community centre to
facilitate development through:
•programmes for the disabled
•small business development hub
•youth programmes
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
15
SOCIO-ECONOMIC DEVELOPMENT continued
MATHS & SCIENCE SCHOOL PROJECTS
GIBELA COMMUNITY DEVELOPMENT
DUDUZA SATURDAY SCHOOL
•Gibela appoints a coordinator
Grade
10
Grade
11
•1 Science teacher per school
Grade
12
•1 English teacher per school
•1 Mathematics teacher per school
•50 Grade 10 Learner per school
TSAKANE SATURDAY SCHOOL
KWA-THEMA SATURDAY SCHOOL
•50 Grade 11 Learner per school
Grade
10
Grade
11
Grade
12
•50 Grade 12 Learner per school
•Gibela to provide all learning aids
Beneficiaries of the programme
Grade
10
Grade
11
Grade
12
•Learners from schools in from Duduza, Tsakane, Kwa-Thema, Alra Park,
Dunnottar and Mackenziville
•Learners with potential to do well in maths and science
•Selection will be based on assessment (test)
•50% where possible of participants must be girls
ENVIRONMENTAL AND AGRICULTURAL PROJECTS
•Ownership – non-profit company for the benefit of the community
•Each project will be financially supported over 2 years
•Project to be labour intensive, keep mechanisation to a minimum
•Each project will employ a minimum of 45 people, targeting local members from the community
•By year three, the project must be managed and operated locally
•Profits generated to be re-invested in the project and other similar projects in the area
PARTNER WITH MUNICIPALITY
GIBELA FUNDS THE PROJECT
MARKET PARTNERS
•Access to land (15-20 ha)
•Identify implementation partner
•Gibela Canteen
•Beneficiaries for the programme
•NPC set up
•Springs Fresh Produce Market
•80% women participation
•Infrastructure development
•Public
•Unskilled, locally-based individuals
•Working capital
•One participant per household
•Development of managers
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GIBELA | ECONOMIC DEVELOPMENT STRATEGY
EMPLOYMENT EQUITY AND JOB CREATION
INTRODUCTION
•Job creation means the creation of sustainable jobs to assist members of
the local population in securing sustainable employment. This includes
both temporary and permanent employment opportunities that are created
directly from the project.
•Gibela fully supports the principle of promoting equal opportunities and
fair treatment in employment through elimination of unfair discrimination
and implementation of affirmative action measures to achieve equitable
representation across all occupational categories and levels.
•Gibela’s success depends on its ability to attract, motivate, and retain an
increasingly diverse pool of talent.
•A diverse workforce and inclusive employment practices ensure that we
understand and build relationships within the communities we operate in,
optimising the positive economic and social impact of Gibela’s presence.
JOB CREATION TARGETS
Commitments
MSA
TSSSA
Citizens
99.1% - 99.7%
99.6%
Black citizens
84.6% - 87.3%
93.1%
Skilled black citizens
76.2% - 78.3%
86.7%
Women
26.8% - 28.0%
40.9%
Youth (18 to 35 years old)
67.2% - 71.6%
60.7%
EMPLOYMENT EQUITY TARGETS
Commitments
MSA
TSSSA
Black disabled employees
1.2%
1.2%
Black employees in middle
management
75.9%
75.9%
Black women employees in middle
management
37.4%
37.4%
Black employees in junior management
88.8%
88.8%
Black women employees in junior
management
43.5%
43.5%
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
17
EMPLOYMENT EQUITY AND JOB CREATION continued
Preference will be given to South African citizens. Preference will
further be given to Historically Disadvantaged Individuals (HDI)
black people (Africans (A), Coloureds (C) and Indians (I) in this
order) in general and black women in particular. Gibela to align
with the Economically Active Population (EAP).
JOB CREATION STRATEGY
In order to achieve the objectives and committed targets, Gibela will
implement the following initiatives in order to create opportunities to enhance
the employability of HDIs:
•mentorship and coaching;
•career management and counselling;
•secondments and special training focused on acquiring knowledge, skills
and experience;
•training and development opportunities such as on-job-training;
•experiential learning for graduate students;
•selection of employees for learnership; and
•adult education and training.
The recruitment and promotion of HDIs will be achieved through:
•performance reviews (Key Performance Areas) to include the achievement of
employment equity objectives and targets;
•preferential recruitment of designated groups with the required skills and
competencies
•directing all advertising at a broad range of groups (especially those from
the targeted local communities) at appropriate levels (local newspapers,
community radio stations, and posting in community centres, etc.);
RECRUITMENT OF LABOUR
The labour for local manufacturing and construction of the local factory will
be sourced in the Ekurhuleni municipality, focusing on, but not limited to, the
following communities: Vosloorus, Katlehong, Kwa-Thema, Thokoza, Tsakane,
Duduza, Tembisa, Daveyton, Daggafontein, and Benoni.
A Recruitment Officer will be employed to execute the following tasks:
•establishing recruitment requirements;
•interviewing and screening applicants; and
•establishing and maintaining a register/database of general labour
for construction and local manufacturing-related job seekers from the
surrounding communities.
Priority will be given on a ‘first registered, first served’ basis.
•Where skilled labour is required (additionally to the core labour force)
a separate register will be set up and maintained as above. In addition,
individual files with professional, technical qualifications and/or job history
with references will be maintained.
•All new labour will be employed on a casual basis for a three-day probation
period, after which a formal employment contract will be finalised.
•The Recruitment Officer will monitor recruitment related movements and
compile a monthly report for submission to management by the end of the
month.
•An initial register of job seekers and subsequent monthly updates thereof
will be submitted to management.
L IAISON WITH DESIGNATED COMMUNITY
LEADERSHIP/STAKEHOLDERS
•ensuring employee retention measures are in place;
Gibela will:
•identifying employees with potential and develop career development plans
tailored to the individual and Gibela’s needs; and
•Identify and liaise with key community stakeholders relevant to the project.
•promoting a culture of ongoing employee education and development.
The following strategy will be implemented:
•A large percentage of skilled and semi-skilled employees will be sourced
from the communities surrounding the local factory.
•Labour recruitment centres will be used extensively to recruit from local
communities.
•All non-management positions that become vacant or are created based
on labour needs will be sourced from local communities.
•Where appropriate, administrative positions will be offered to
unemployed graduates.
•All advertising for vacant positions will be coordinated through Gibela’s
structure.
•All recruitment of suitable applicants to be done on a first come, first
served basis.
18
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
•Establish rapport with community leadership, including forming formal
working relationships or forums where necessary.
•Develop political risk management and containment strategies, to ensure
timeous delivery of the project.
•Continually liaise with, update, and appraise stakeholders about progress of
the project.
•Maintain vigilance to ensure that there are no resource or power
manipulation tactics by any stakeholder that may compromise the project.
PREFERENTIAL PROCUREMENT
INTRODUCTION
The Gibela Rail Transport Consortium is committed to achieving
the preferential procurement commitments as set out in Annex 4
of Schedule 4 of the MSA and Schedule 14 of the TSSSA.
This will be achieved by the Gibela, its contractors and all their suppliers, by
making economic development and B-BBEE a priority and building it into its
broader Procurement Policy in a non-negotiable manner.
Gibela has developed a Preferential Procurement Policy which will be
compulsory for all suppliers to comply to.
PREFERENTIAL PROCUREMENT
COMMITMENTS
MSA
TSSSA
69.56% 73.19%
DPB-BBEE
B-BBEE procurement spend
PP-01 procurement from all suppliers based on
the B-BBEE procurement
recognition levels as a
percentage of total measured
procurement spend.
13.30% 10.35%
DPQSE and EME B-BBEE procurement spend
PP-02 procurement from qualifying SMMEs based
on the applicable B-BBEE
(SMMEs)
procurement recognition
levels as a percentage of total
measured procurement spend.
3.46% 8.28%
B-BBEE procurement spend
DPBlack
from Black women-owned
PP-03 womenenterprises.
owned
procurement
P REFERENTIAL PROCUREMENT BY THE
PROJECT COMPANY
At a company level, Gibela commits on the overall B-BBEE status of its
suppliers. Furthermore, at the level of the Project Company, we recognise that
there is a definite shortage of companies owned by black women that are
able to support this project. For this reason, Gibela has identified a number of
procurement opportunities where new businesses can be formed. This is an
opportunity to align the Preferential Procurement Policy with the Enterprise
Development Strategy. The Enterprise Development Plan will indicate a
number of opportunities where Gibela will commit to starting up new,
greenfield businesses. It is Gibela’s strategy that more than fifty per cent of all
new businesses will be owned by black women.
PREFERENTIAL PROCUREMENT BY
SUPPLIERS
Gibela has requested all its potential suppliers (Tier 1) to identify the potential
preferential procurement for their scope of supply (at least at Tiers 2 and 3).
These figures have been included in Gibela’s overall commitments.
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
19
PREFERENTIAL PROCUREMENT continued
Suppliers for the TSSSA contract will generally mirror those as set out in the
MSA contract. Those suppliers have undertaken to match the commitments
that they have made for the MSA, in the maintenance phase.
SCOPE OF THE PREFERENTIAL
PROCUREMENT POLICY
Gibela has developed a Preferential Procurement Policy in an effort to
ensure the constructive participation of B-BBEE-compliant suppliers in the
South African railway industry and global economy. Gibela is committed
to establishing relationships with its suppliers which will contribute to the
commercial, strategic and empowerment objectives of both the company and
its suppliers.
The Preferential Procurement Policy is associated with the principles included
in Gibela’s Charter for Sustainable Development. Sustainable development is
key for Gibela and is a strong component of its strategy. It means strongly and
actively responding to Gibela’s stakeholders’ social needs and expectations
and anticipating new environmental, social and economic developments.
20
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
The Preferential Procurement Policy is intended to maximise the use of
and development of empowered suppliers, whether small, large, black or
women owned. It is also intended to increase the access of black businesses
to mainstream opportunities, as well as promote entrepreneurship and the
participation of women in business within Black communities.
PREFERENTIAL PROCUREMENT TACTICS
•Preference point system – a preference point system will be introduced
when comparing quotations to influence the suppliers to reach Level 1 - 4
B-BBEE recognition level status and to have black ownership.
•Disaggregation on contracts – where appropriate contracts will be
disaggregated into smaller items to enable the involvement of BWOs/EMEs/
QSEs.
•Set asides – certain goods and services will be ring-fenced in part or in
whole for the benefit of BWOs, EMEs and QSEs.
•Value-adding SPVs – where appropriate joint venture contracts will be
awarded between traditional and B-BBEE suppliers.
ENTERPRISE DEVELOPMENT
INTRODUCTION
MAIN BUSINESS AREAS CONSIDERED FOR ENTERPRISES
Gibela identifies itself with the growth and transformation of the
South African economy and fully supports PRASA’s ED objectives,
in assisting and accelerating the development and sustainability
of other enterprises and their financial and operational
independence.
With regard to the development of new businesses, Gibela commits to the formation
of various greenfields businesses, with the target that at least 50% of them should be
owned by black women. The following list represents a first set of possible areas for
such development:
DEVELOPMENT
Gibela acknowledges PRASA’s recognition that the Rolling Stock Fleet
Renewal Programme is inherently excellent for achieving broad socioeconomic objectives, and that various legislation and policies of government
were considered by PRASA in determining the economic development outputs
for this programme.
•Primary parts business. All the primary parts required by Gibela to weld
and assemble a component are subcontracted to a company, who cuts
and prepares them to kits. These kits are delivered “just in time” to the
assembly line. The subcontractor (a BWO company) will be assisted to invest
in laser-cutting-machines to cut the metal-sheets, but also into specific
bending and forming machines.
Gibela’s obligation to Enterprise Development is to spend 1.2% of the
contract value on development of enterprises in rail-related activities and on
enterprises in general activities. Gibela’s ultimate goal is to provide blackowned, particularly black women-owned exempted micro entities (EMEs) and
qualifying small enterprises (QSEs), with an effective platform from which they
can expand their operational and financial capacity.
•Looming business for the preparation of electrical cables. There are many
different types, which when cut to the correct length, are then assembled,
and finally bundled to so-called “cable-looms” and equipped with
connectors. These preassembled cables are then shipped to the assemblyline of the coaches and to other subcontractors preparing parts (e.g. the
driver’s cabin or electrical cupboards).
The main objective of Gibela’s Enterprise Development programme is to
create sustainable qualifying enterprises that achieve growth, create jobs
and contribute to economic growth. The programme involves investing time,
capital and material in helping people establish and expand businesses that
contribute to the economy.
•Filming business: The colours and the design as well as all inscriptions on
the train are applied with films. These films will be purchased and applied
to the trains.
OBJECTIVES
Gibela’s enterprise development objectives are split into two broad areas:
identifying and increasing the number of black-owned existing businesses,
and the creation of new black-owned businesses, as follows:
•Identify existing black and black-women entrepreneurs.
•Invest in these black entrepreneurs, so as to increase their operational and
financial capacity.
•Increase the number of black-owned EMEs and QSEs which are capacitated
to supply the rail-related industry.
•Establish a programme to increase access to markets (both in South Africa
and internationally) for existing and emerging black owned and black
women owned businesses.
•Assist with the transfer of skills and technology to black and black-women
entrepreneurs currently operating in the sector.
•Enable smaller enterprises who have the potential to be active in the core
of the rail sector to grow and develop.
ENTERPRISE DEVELOPMENT APPROACH
Gibela’s commitment to enterprise development is aligned with its Preferential
Procurement Plan, which ensures a commitment to developing and incubating
small black-owned businesses, particularly businesses owned by black women.
Gibela is committed to starting a number of new greenfields businesses, as
well as mentoring and assisting a number of other enterprise development
beneficiaries which qualify in terms of the requirements for this project.
•Piping business: The pipes (pneumatic controls, brakes, inter alia) are
preassembled. This process is comparable to the preassembly done for
cables.
•Establishment of a canteen to provide for all workers on the factory site.
•Establishment of a cleaning company to undertake all cleaning work in and
around the factory.
•Establishment of a transport company, to assist workers to get to the
factory, and to provide customized and hosted transportation solutions for
international and government guests to the project.
•Establishment of logistics and transportation business, to provide business
transportation solutions.
•Establishment of a packaging preparations business.
•Establishment of a business to make covers to protect seats, floors, driver’s
desk etc. during manufacturing.
•Site security is planned to be outsourced and enterprise developed, either
through an existing business or a newly created company.
GIBELA BUSINESS ENTERPRISE MODEL
Gibela has realised that assistance with the creation and growth of new
businesses remains one of the great economic challenges globally. There are
no simple answers to how entrepreneurs are identified, businesses are started
and what is required to ensure that they thrive and become sustainable in
the long term. Nevertheless, there are a number of key fundamentals which
Gibela has incorporated into its Enterprise Development Strategy, and these
include the following:
•New businesses, particularly start-ups, require an amount of start-up capital
in order to acquire the necessary capital goods. Start-ups also require a
certain amount of capital for the purposes of covering operating costs
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
21
ENTERPRISE DEVELOPMENT continued
for an initial period, until new work has been completed and identified
customers are able to pay, thereby introducing funds into the new business.
•New businesses require an extensive amount of mentoring and advice from
experts and mentors in order to ensure that emerging entrepreneurs have
a fast track on up-skilling and developing the requisite capacity to own and
manage their own business.
•New businesses further require security in their core customer
relationships so that they may rely on a specific amount of work and
income streams. This sustainability of work is one of the key areas which
allow businesses to survive in the medium to long term.
•New businesses require an extensive amount of expert assistance in order
to manage growth. This is normally provided in the form of a mentorship.
Gibela is committed to providing assistance in all four of these areas. It will do
this through the partnership with a well-established and credible Enterprise
Development Incubation Programme and Fund to which Gibela can outsource
much of the enterprise development assistance required.
These include:
•A dedicated focus on the upliftment of businesses owned by black women
in the rail sector.
•A focus on fostering entrepreneurship and the business skills of women
within the rail and rail-related sectors.
•An ability to deliver well-developed and strategic products and services,
which complement Gibela’s and extend its expertise into the associated
value chain.
•The capacity to manage the impact and implementation of its service and
product offering.
This means a number of outcomes are achieved:
•Utilising rail assets for multiple applications or local enterprise
development.
•Leveraging general business skills and assets into building new enterprises.
ENTERPRISE DEVELOPMENT STRATEGIC
REQUIREMENTS
•Developing businesses along the rail-development supply chain.
The Enterprise Development Plan presented has been chosen because it
meets a number of what Gibela considers to be non-negotiable requirements.
•Secure long-term know-how for the developed enterprise, including the
possibility to extend its perimeter of service / activity.
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GIBELA | ECONOMIC DEVELOPMENT STRATEGY
•Investing into the supplier and contractor value chain to enhance the value
of Gibela’s product and to enable a viable contracting sector.
ENTERPRISE DEVELOPMENT PROGRAMMES
Enterprise development programmes shall be built around recognised B-BBEE
enterprise development contributions such as:
•Investments in beneficiary entities.
Gibela’s Enterprise Development differentiation factors are as follows:
•The commitment to supporting the scale-up of a local-rail supply chain
includes strong technical and quality support to products supplied. Most
incubation programmes only provide non-technical support.
•Integrated capacitation of all the aspects of barriers to growth in smallblack businesses ranging from: technical upskilling, business upskilling,
working capital relief, and loans to support growth.
•Administrative support in enterprise creation and development.
•Loans made to beneficiary entities.
•Credit facilities made available to beneficiary entities.
•Encourage companies to provide various types of assistance to black
SMMEs with the objective of expanding their operational and financial
capacity.
•Provision of training or mentoring to beneficiary entities which will assist
the beneficiary entities to increase their operational or financial capacity.
•To procure from such enterprises (2/3rds of Enterprise Development to
benefit businesses within supply chain).
•Creation or development of capacity and expertise for entities needed to
manufacture or produce goods or services previously not manufactured,
produced or provided in South Africa.
ENTERPRISE DEVELOPMENT INITIATIVES
•Guarantees given or security provided on behalf of beneficiaries.
Enterprise
DP-ED-01 Contributions
Development
to Enterprise
Development
Enterprise
Development
contributions *
100/contract value
1.2%
•Monetary contributions: access to finance - seed capital, loans, equity,
grants.
•Non-monetary contributions: training and mentoring, preferential credit
facilities/bonds/relaxed security requirements, early payment terms, access
to infrastructure at low or no cost.
ENTERPRISE DEVELOPMENT MODEL
SEE PAGE nn
GIBELA ENTERPRISE DEVELOPMENT FUND
GIBELA CENTRE OF EXCELLENCE
GENERIC ENTERPRISE DEVELOPMENT
(Railway related enterprise development)
(Gibela non-railway related enterprise development)
1. Incubation entrepreneur development
1. Incubation entrepreneur development
•Business development support
•Business development support
•Back-office support
•Back-office support
2. Gibela innovation & technology
GIBELA ENTERPRISE DEVELOPMENT TEAM
Contracting, monitoring and reporting
Figure 2: Enterprise Development Model
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
23
ENTERPRISE DEVELOPMENT continued
CONTRIBUTING OUR RESOURCES AND KNOWLEDGE TO BUILD SUSTAINABLE BUSINESSES
Develop Black Small Medium
enterprise (SME) and assist start
ups using the incubator
Support to supply
chain business
SMALL BUSINESS
START-UPS
STRATEGIC PARTNERSHIP(S)
TO FUND AND DEVELOP
BUSINESS
SUPPLIERS
Preferential procurement
supplier –
• Develop existing suppliers by
offering working capital required for
growth
• Transform suppliers
Figure 3: ED Strategic partnership
24
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
SUPPLY CHAIN
BUSINESSES
(eg. looming & c-class
businesses)
CRITICAL SUCCESS FACTORS
1. VISIBLE COMMITMENT BY EXECUTIVE
• E D will not happen without visible “evidence” of top management commitment to it. Top management has to be transparent and open about their
commitment to ED through their actions.
• R esources have to be allocated to ED initiatives as well as giving time to take part in these initiatives. The performance agreements for top
management should include a key deliverable on demonstrating commitment to ED.
• ED successes should be celebrated in the organisation to build the brand internally and externally, with employees and stakeholders, respectively.
2. MILESTONES MONITORING
3. SUPPORTIVE POLICIES AND PROCESSES
4.INTERNAL AND EXTERNAL COMMUNICATION
5.AVAILABILITY OF RESOURCES AND PARTNERSHIPS WHERE APPLICABLE
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
25
APPENDICES
GLOBAL SUPPLIERS LOCALISING
The following list of suppliers includes all the non-South African suppliers which have been awarded for the first trainsets and who are already locally registered
and industrially established, or have agreed, thanks to the negotiations carried out by Gibela, to create a local branch and to open a local factory dedicated to
the PRASA project.
COMPONENTS
SUPPLIERS
Passenger Doors
IFE
HVAC Cab + Saloon + Air Extractor + Electrobox
THERMOKING
Carbody Brake (Module, Air production & Aux)
WABTEC
Bogie Brake
WABTEC
Driver & Instructor Seat
ISRI
Pantographs Carbon
WABTEC BRECKNELL & WILLIS
Couplers (Front Coupler, SPB, EC)
VOITH
FRP, Front End & Driver Desk - Lining End + Cubicle lining, Roof Arches, Front end, Driver desk, Door trimming , Windows mask
BFG INTAL
Coating / Painting
BECKERS
Windscreen washer & wiper
KB
Inductors & Transformers - Input Filter
ELETTROMIL
Inductors & Transformers - Key Exchanger
FAIVELEY
Auxiliary Convertor Unit (ACU) - Fans
TELEMA P.
ACU SwitchGear
MICROELETTRICA
Connectors
WEIDMULLER
Fans - Brake resistor – Piping Kit
TELEMA-PENBRO
Cooling System
COMET
Bonding – Lubricants - Rubbers
GIS
Fasteners
BOSSARD
26
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
LOCAL SUPPLIERS
The following list of suppliers comprises the preliminary South African suppliers which have been awarded for the first 20 trainsets.
COMPONENTS
SUPPLIERS
Cabin Doors
SIYAHAMBA
Saloon Heaters + Driver FootRest
BOOYCO
Air Tank - Reservoirs
ILVA
Horns
KAMA
Passenger Seats / Longitudinal Benchs
PROFIBRE
Battery Box
KARE
Batteries
FNB
Interior Fittings - Baseboard Ducts
DENEL
Interior Fittings - Luggage racks
GLOBAL COMPOSITE
Interior Fittings - Equipped Ceiling - Cab+Saloon Air Ducts
GLOBAL COMPOSITE
Interior Fittings - Handbar & PMR Backrest
DELBERG
Lighting Systems - Passenger + Cab Lighting (Led)
RADEL
Insulation
GIBS
Sheet Metal Works - Door External Fairing
CRESTINFO
Sheet Metal Works - Brackets
LASER JUNCTION
Sheet Metal Works - Coupler Push Back
LASER JUNCTION / GENERAL
PROFILING MATLA STEEL
Sheet Metal Works - Tool Box
LASER JUNCTION / SPE
Sheet Metal Works - Equipment Support
JANDINOX
Sheet Metal Works - Cab Foot Step
LASER JUNCTION
Sheet Metal Works - Extract AirDuct In Cubicle
CRESTINFO
Sheet Metal Works - Obstacle Deflector
BUZAS
Sheet - Steel & Plate - Stainless Steel
COLUMBUS / MACSTEEL
Sheet - Steel & Plate - Carbon Steel
ARCELOR MITTAL SA / MACSTEEL
Electric components - External front/Cab Lighting (Head Light + Platform light)
LED LIGHTING
Electric components - Door Light Indicator
RADEL
Electric components - Voltage indicator
RADEL
Cabin Interiors including Partition Walls
SIYAHAMBA
Cables Wires
ABERDARE
Fluid systems - Piping
FORMINOX
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
27
APPENDICES continued
LOCAL SUPPLIERS AND FOREIGN SUPPLIERS
The following list of suppliers comprises the preliminary South African suppliers (already established or foreign suppliers currently localising) and the non-South
African suppliers who will share the delivery of components for the first awarded trainsets.
COMPONENTS
SUPPLIERS
Primary Suspension - Bogie
TMT
Transmission Block - Bogie
TMT
Elastic articulation - Bogie
TMT
Rubber Stop - Bogie
TMT
Cabling - Current return - Bogie
GERKEN / South Africa
Grounding Cable Kit - Bogie
LIA TECH / South Africa
Anti-roll bar - Bogie
TMT / MASSELIN
Connecting Rod - Bogie
TMT
Hose Kit - Bogie
OTN / South Africa
Glazing -
PG GROUP/TMT
Cables - Wires
ABERDARE PRYSMIAN NEXANS
Electric components - EBI Circuit Breakers, Contactors, Push Buttons & Selectors
ABB, CBI, PHOENIX CONTACT, MAFELEC
The list of suppliers is subject to modification according to Project Sourcing strategy.
LOCAL SUPPLIERS WITH FOREIGN SUPPLIERS
The following list of suppliers comprises the preliminary South African suppliers who will partner with non-South African suppliers for the delivery of components
of the first awarded trainsets.
COMPONENTS
SUPPLIERS
Primary Suspension - Bogie
ANVIS - BELESSEX
Transmission Block - Bogie
ANVIS - BELESSEX
Elastic articulation - Bogie
ANVIS - BELESSEX
Rubber Stop - Bogie
ANVIS - BELESSEX
Connecting Rod - Bogie
ANVIS - BELESSEX
Master Controller - Driver Interface Equipment
RADEL - SCHALTBAU
Gangways
ULTIMATE - SENA WINDOWS
Floor Covering (Saloon + Cab)
ALTRO – Local Partner
28
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
IMPORTED COMPONENTS
The following list of suppliers comprises all the non-South African suppliers which have been awarded for the first trainsets. This is the imported component
picture as it stands today. The impact on the LC is made on item basis function of the weight of the imported portion. There are currently no local suppliers
known to us. Gibela will continue to drive for localisation of these components.
COMPONENTS
SUPPLIERS
Passenger Transversal Seats for Metro Express
KIEL
Brake System indicator
MAFELEC
Dead man device Buzzer
MAFELEC
Power Wheelsets (axle + wheels)
BONATRANS / JINXI
Trailer Wheelsets (axle + wheels)
BONATRANS / JINXI
Air Springs - Bogie
- HUTCHINSON / TMT
Gearboxes - Bogie
NGC
Fixing and small parts for Bogie
BOSSARD / EMAURIN
Traction bar - Bogie
STELOY / PEFCO / FBM
Pivot - Bogie
STELOY / PEFCO / ALTONA
IGBT + Semi-Conducteurs
INFINEON
Electric Comp. - Capacitors
EPCOS
EVR + Voice Radio GSMR
FT + FUNKWERK
EBI Pins Terminals, Sleeves & Ferrules
GIS EUROPE
The list of suppliers is subject to modification according to project sourcing strategy.
GIBELA | ECONOMIC DEVELOPMENT STRATEGY
29
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