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Click to edit Master title style Operation Phakisa Initiative 2 - Saldanha Supply Base Facility Presentation of the RFP TNPA 2016/04/013/CM 1

Introduction This presentation (the Presentation) sets out the salient features of the Request for Proposal TNPA 2016/04/013/CM (the RFP ). The Presentation is provided to the Bidders for illustrative purposes only. Information provided in the RFP shall take precedence over information provided in the Presentation. 2

Context - Operation Phakisa Operation Phakisa is an initiative of the South African government, designed to fast track the implementation of solutions on critical development issues. One of the key components of Operation Phakisa is an oceans economy strategy. Several initiatives within the marine transport and manufacturing laboratory of Phakisa are under consideration. The Quay Initiative 2 aims in particular at providing a marine services cluster to serve the oil and gas activity off the coast of West Africa and South Africa in the port of Saldanha. Initiative 2 relates to the port of Saldanha and was originally conceived around the following: Establishment of rig repair activity; Establishment of ship repair activity; Establishment of an Offshore Supply Base facilities (OSSB) in the Port of Saldanha In 2014 Transnet reached an investment decision for the construction of a quay (the Quay) with a view to use it as an Offshore Supply Base at the Port of Saldanha. The GMQ (the Quay ) for the Facility is currently under construction and is expected to be completed in June 2016. The Quay is 294 m long and presents a draft of CD -6.5m. 3

General principles for the Project The appropriate outlet for the Quay has been investigated and developed with a view to extend a concession to a Private Party Operator (TPO) to provide maritime services primarily for the oil & gas industry (the Project) but taking into account the changed context for the oil and gas industry since the start of Operation Phakisa in 2014. It was decided that the Quay would be made available for a supply base facility providing generalist and specialist services to vessels, rigs and offshore platforms traversing and/or operating off the coast of Africa (the Facility). The recommended project structure also took the following objectives into account: 1. Operation Phakisa: contribute to economic growth and local empowerment through job creation and stimulation of a wider local supply chain. 2. Commercial attractiveness to an experienced and reputable operator who can anchor generalist and specialist offerings so as to support first class services primarily to the oil and gas industry. 3. Financial sustainability: optimise use of the Facility and support revenues generated for the TPO. 1 Operation Phakisa Concession of A Supply Base Facility Training job creation Local partnerships Bring skills Transfer of skills Local empowerment Expand supply chain Provide services at in line with market needs Fixed revenues Profit sharing Amortization of capital expenditure 2 3 Socioeconomic Technical Commercial Added-value services Financially sustainable 4

General principles for structuring the Scope of Services Seismic surveys Exploration Pre-production Production Transnet delivering Phakisa 2 Commercially Viable to TPO Authorised services Core O&G Services Anchor services 3 Financially sustainable 1 Socio-Economics Local empowerment, job creation, skills transfer, etc. The Project scope of services (the Services) has been designed to keep in line with market needs in an attempt to make the Supply Base Facility commercially viable while supporting the wider objectives of Operation Phakisa in particular the following: Bring-in specialist skills and support financial viability for the Project with commercial flexibility through an appropriate tariff structure (ramp-up fee, dual fixed/ variable structure see slide 11) as well as flexibility of scope of Services. 1. Anchor Services : generalist services to be delivered within a set timeframe (e.g. bunkering, water, offloading services), and which can target a variety of industries as the case may be; 2. Core Services: specialist oil and gas services to be delivered in line with market needs and to be provided in response to market demand e.g. pipe yard and handling of oil waste; and 3. Authorised Services as elected or proposed by Bidders to sustain the commercial viability: ( e.g. ship repair using a floating dock). 5

Envisaged Project structure The Project is structured as a 20-year Concession to a Third Party Operator (TPO) to operate the Supply Base Facility on a Multi-purpose basis, with a primary focus on ultimately servicing the oil and gas industry (the Core Services). General principle is that TPO would operate commercially (tariffs, ability to subcontract) with Transnet providing the quay, back of port land and general access to facilities of the Port of Saldanha. TRANSNET Third Party Operator (TPO) Owns the Supply Base Facility Facility Operator Agreement Operates the Supply Base Facility Anchor, Core O&G, Authorised services Service agreements Commercial tariffs Client 1 Client 2 Client n Target WACC return Concession Fee Transnet keeps ownership of the Supply Base Facility - while providing general access to port facilities, including: Land and access roads Access roads Transnet to receive payments under the Facility Operator Agreement - Concession Fee combining fixed and variable revenue sharing component Transnet to facilitate access to supporting services such as power, water, telecom and sewerage TPO to operate the Supply Base Facility in accordance with Facility Operator Agreement and scope of Services TPO provides superstructure and necessary equipment TPO is fully exposed to commercial risk but benefits from commercial flexibility TPO to maximise its level of revenues through the Authorised Services and management of their commercial offer TPO is accountable to deliver socio-economic plan 6

Scope of Services and land allocation The scope of Services can be broken down according to whether a Service is (1) compulsory or not, (2) to be made available according to a fixed timeline (as per the Bid Response) or in response to market demand, and (3) whether it relates to a critical skill used for qualification. All Services can be rendered on land owned by TNPA and made available for the Project as part of the Concession. Nature Category Timing for Availability of Services to the market Within the Project Site (Quay and Back of Quay) Compulsory Anchor Services Commencement of the Operations Period under the Facility Operator Agreement Note: bidders to propose the Construction Works Programme in respect of the Facility Infrastructure and the Facility Equipment in their Bid Response. The periods specified in the Construction Works Programme and the Facility Operator is required to commence the provision of at least the Anchor Services at the commencement of the Operations Period. Material loading & offloading facilities Storage facilities (including reefer points); Ancillary bunkering, fuel, oil and lubricants refill services Water refill Offices facilities Core Services As required by the market (*) or before if elected by the Facility Operator Note: investment to respond to market demand or earlier Handling of oil waste - Pipe yard including coating facilities Warehousing and facility yard management cleaning, maintenance and preservation of off-shore oil and gas related materials and equipment Non compulsory Authorised Services At Operations discretion to the extend in line with Bid Response and Facility Operator Agreement and notified to TNPA Note: investment for the Authorised Services to be undertaken at bidders. Authorised = Approved Services selected by the Bidders and the Proposed Services approved by TNPA Approved Services maintenance & repair services to vessels including the provision of a floating dock, boat building; Accommodation - ccustoms and clearing services, Proposed Services: as proposed by Bidders in their Bid Responses and be approved by TNPA as part of evaluation process, Compulsory & to be made available on fixed timeline (as per bid) - Used for qualification Compulsory & to be made available as per market demand Used qualification Compulsory & to be made available on fixed timeline (as per bid) NOT used for qualification NOT compulsory & to be made available as per market demand NOT used for qualification 7

Socio-economic qualification, evaluation and monitoring principles Qualification: accessible entry point combined with obligation to demonstrate continuing commitment to local empowerment and supporting the continuing transfer of skills Deliverables for qualification include: Demonstrate minimum criteria in terms of B-BBEE certifications (Level 4 or equivalent rating in terms of the Sector code if applicable) and ability to demonstrate a 25% Black Ownership from commencement of the Concession; Provide a B-BBEE improvement plan demonstrating ability to achieve a Level 2 B-BBEE and separate requirement of 55% Black Ownership level by 10 th anniversary of Effective Date; Provide a Supplier Development Plan for the full life of the Concession supporting the bidding targets used for the evaluation Evaluation: based on bidding targets over the full life of the concession through an NPV-based formula to support a comprehensive assessment and to reward bidders committing to more ambitious targets earlier. The targets indicated by the Bidders in their returnable (see example below) are to be validated by the Evaluation Team on the basis of the Supplier Development Plan Targets from 10 th anniversary of the Effective Date (Contract Year 10) apply for the rest of the Concession. 3.3.2 approved targets by ET 3.3.2.1 - Capacity & Capability building (localisation) 3.3.2. 2 - % staff SA 3.3.2.3. - % staff being trained 3.3.1.4. - % revenues spent on training 3.3.1.5. - BEE generic scorecard rating 3.3.2.6. - Weighted Sum Weight within SD 20% 25% 25% 10% 20% n/a n/a n/a Applicable Base 100.00 100.00 100.00 100.00 1.00 n/a n.a n/a Approved SED plan year 1 10.0% 10.0% 10.0% 1.0% 80 23.10 21.11 1.09 Approved SED plan year 2 12.0% 12.0% 12.0% 1.0% 80 24.50 20.47 1.20 Approved SED plan year 3 14.0% 14.0% 14.0% 1.0% 80 25.90 19.78 1.31 Approved SED plan year 4 16.0% 16.0% 16.0% 1.0% 80 27.30 19.05 1.43 Approved SED plan year 5 20.0% 20.0% 20.0% 2.0% 80 30.20 19.26 1.57 Approved SED plan year 6 20.0% 20.0% 20.0% 2.0% 80 30.20 17.61 1.72 Approved SED plan year 7 20.0% 20.0% 20.0% 2.0% 80 30.20 16.09 1.88 Approved SED plan year 8 20.0% 20.0% 20.0% 2.0% 80 30.20 14.71 2.05 Approved SED plan year 9 20.0% 20.0% 20.0% 2.0% 85 31.20 13.89 2.25 Approved SED plan year 10 20.0% 20.0% 20.0% 2.0% 95 33.20 13.51 2.46 3.3.2.7. NPV Discount Factor 9.41% 3.3.2.8 - NPV of Weighted Sum = SD Score 175.47 Monitoring: ensure accountability as bidding targets become binding under the Facility Operator Agreement Operator to report annually on their Empowerment Obligations (part of the Annual Report); Performance measurement is based on updating the SD Score to actual parameters and comparing to the Bid Response, allowing therefore flexibility on delivery individual targets but keeping overall accountability; Failure to achieve Empowerment Obligations, give raise to penalties and obligation to post a remedial plan - Failure to remedy is an EoD. 8

Socio-economic B-BBEE requirements an illustration As part of the Supplier Development Value Summary Worksheet, Bidders will be required to compete on their expected B-BBEE ratings over the lifetime of the Concession. The penalty regime will only apply from Contract Year 4 onwards. At a minimum, Bidders will be required to achieve at least a Level 4 B-BBEE contributor status (*) at the beginning of the project, and demonstrate how this can be improved to reach a level 2 (*) contributor status by 10 th anniversary of Effective Date, using the current generic 2013 B-BBEE codes as a reference. Practically this could mean the following: While the preferential procurement targets are high, there are exclusions that allow for imports where no local products are available or different technical specifications are available locally, and provided a company has an accompanying supplier development plan (which does form part of the RFP s inputs). On inception, a company is automatically given a Level 4 (*) contributor status level (for one year); There is some flexibility on how firms can improve their contributor status levels (for example focussing more on management control, or procurement, etc.) Ownership targets set in the RFP should translate into a high score on the B-BBEE scorecard if the transaction is well structured (i.e. high level of voting rights & equity share is not funded via a loan) The RFP targets on training and localisation align with skills development & enterprise development, which will help to contribute up to 25 & 44 points. However, these are challenging to be achieved fully (especially in the first five years as operations and investment in skills are ramped up), To maintain a Level 4 (*) contributor status under the revised codes, bidders must also focus on meeting at least 50 per cent of targets under management control. 15 more points will need to be scored by year 10 for bidders to reach a Level 2 status (from a Level 4 status (*)). This requires bidders to meet over 80 per cent of all targets in the B-BBEE codes. (*) or other rating in terms of the Sector code as applicable 9

Contractors Anchor/ Authorised Contractors Key contractors Anchor and Core Bidder Qualification /Experience Score Pass / fail Experience points = 70% weight Qualitative Evaluation on integral solution points at 30% weight Phakisa - Initiative 2 - Saldanha Supply Base Facility Technical qualification, evaluation and monitoring principles Support a diverse scope of services and flexible operations to an evolving demand for a supply base facility in a difficult market Ability of the Operator to subcontract the Services to combine relevant skills and respond swiftly to diverse client needs; Performance standards to be aligned with the flexibility required and to be defined in consideration of other protections in the structure: e.g. financial commitments and obligations to maintain minimum certifications. Ensure transparency and accountability of the Operator s subcontracting strategy at qualification, evaluation and concession stages The technical qualification and evaluation assess the competence and experience of the Operator and contractors undertaking specialist services (Key Contractors) as well as the envisaged contract terms: score to be in excess of a minimum technical threshold for qualification This score is carried through for allocation of points and weighted 70% of total points for Technical criteria The Operator is bound to implement its sub-contractual structure for Key Contractors under the Facility Operator Agreement Member (Lead >=51%) Member BEE (>=25%) Member 3 Sub-contract or direct servicing from members MOF Handling of Slops Pipe-yard Bunkering + Water Refill Offices Floating Docks Anchor Services ancillary Services relevant for qualification and evaluation Anchor Services MOF related Core Oil and Gas Authorised Services Services relevant for qualitative evaluation 10

Financial qualification, evaluation and monitoring principles Qualification: aiming at assessing minimum financial strength of bidder and ability to deliver the project, including: Provide 3-years audited financial statement proving that the 3-year average Net Asset Value would cover the respective equity contribution Financial Model showing the due payment of the Concession Fee Offer over the Concession Period and Financial Model Audit Letter Proof of sufficient funding: Equity Support Letter, Letter of Support from Lender, Corporate Finance Support Letter as applicable. Evaluation: the financial score is based on the NPV of the Concession Fee All Concession Fee parameters are bidding targets to be filled-in by Bidders (macro-economic parameters provided in the RFP) The evaluation team validates bidding parameters in view of the Business Plan (see extract of Concession Fee Offer Worksheet) Monitoring: the bidding targets become binding in the Facility Operator Agreement supporting a minimum fixed fee structure Operator financial obligations are backed-up by a Performance Guarantee Financial reporting is part of the Operator s obligations (Annual Report to be audited) 3.2.1 - Concession Fee Offer 3.2.1.1 - Rum 3.2.1.2 - FCFm 3.2.1.3 - VCFm (**) 3.2.1.4 - MRLm 3.2.1.5. - CFm 3.2.1.6 - NPV PV Factor Unit % ZARM % ZARM ZARM ZARM 9.41% Bidders Offer - Year 1 10% 15.00 5% 5 1.75 1.60 1.09 Bidders Offer - Year 2 30% 15.00 5% 20 5.50 4.59 1.20 Bidders Offer - Year 3 30% 15.00 5% 20 5.50 4.20 1.31 Bidders Offer - Year 4 30% 15.00 5% 20 5.50 3.84 1.43 Bidders Offer - Year 5 30% 15.00 5% 50 7.00 4.46 1.57 Bidders Offer - Year 6 30% 15.00 5% 50 7.00 4.08 1.72 Bidders Offer - Year 7 30% 15.00 5% 50 7.00 3.73 1.88 Bidders Offer - Year 8 30% 15.00 5% 50 7.00 3.41 2.05 Bidders Offer - Year 9 30% 15.00 5% 50 7.00 3.12 2.25 Bidders Offer - Year 10 100% 15.00 5% 100 20.00 8.14 2.46 Bidders Offer - Year 11 100% 15.00 5% 100 20.00 7.44 2.69 Bidders Offer - Year 12 100% 15.00 5% 100 20.00 6.80 2.94 Bidders Offer - Year 13 100% 15.00 5% 100 20.00 6.21 3.22 Bidders Offer - Year 14 100% 15.00 5% 100 20.00 5.68 3.52 Bidders Offer - Year 15 100% 15.00 5% 100 20.00 5.19 3.85 Bidders Offer - Year 16 100% 15.00 5% 100 20.00 4.74 4.22 Bidders Offer - Year 17 100% 15.00 5% 100 20.00 4.34 4.61 Bidders Offer - Year 18 100% 15.00 5% 100 20.00 3.96 5.05 Bidders Offer - Year 19 100% 15.00 5% 100 20.00 3.62 5.52 Bidders Offer - Year 20 100% 15.00 5% 100 20.00 3.31 6.04 3.2.1.7 - NPV Score 38.78 11

Concession fee structuring formula The Concession Fee is payable annually for every Contract Year m (starting from Effective Date) The Concession Fee calculation is mainly based on bidding targets submitted in the Scoring Model (in yellow) Annual adjustments to actual CPI and actual revenues are also components of the annual calculation supported by a Concession Fee Certificate CF m = FCF 0 x RU m x CPI m + VCF 0 x max (average(r m, R m-1, R m-2 ), MRL m *CPI m ) Item Description Source Note FCF 0 Fixed Concession Fee at bid date RU m Ramp-up = % of fixed fee for Contract Year m Bidding target Rum=100% when m>=10 Binding in FOA Applied on max of the past 3- VCF Concession Fee Offer in Scoring 0 Variable Concession Fee at Bid = % of revenues years average actual revenues Model to become a Schedule in vs. MRL for Contract Year m FOA 10-year ramp-up MRL m Minimum Revenue Level for period m MRL m+1 = MRL m if m>10 CPIm CPI at the end of Contract Year m Actual CPI for Contract Year m Calculated in reference to CPI =1 at Bid date R m Actual revenues R in Contract Year m If m = 2, R m-2 excluded from average calculation If m = 1, both R m-1 and R m-2 excluded Business Plan in Bid Annual Report Concession Fee Certificate Annual Report and Concession Fee Certificate to be audited CF m Total Concession Fee to TNPA in Contract Year m Scoring Model in Bid Response Concession Fee Certificate, as in Annual Report Calculation at the end of each Contract Year m as contained in Concession Fee Certificate 12

Concession Fee Example If most of the parameters of the Concession Fee formula are bidding parameters, the NPV calculation will exclude inflation adjustments in order to ensure a neutral position for evaluation, and on the basis of project revenue levels; Parameters indicated by bidders in their Bid Responses (shown in orange) will be carried across in the Facility Operator Agreement as binding. 3.2.1 - Concession Fee Offer 3.2.1.1 - Rum 3.2.1.2 - FCFm 3.2.1.3 - VCFm (**) 3.2.1.4 - MRLm 3.2.1.5. - CFm 3.2.1.6 - NPV PV Factor Unit % ZARM % ZARM ZARM ZARM 9.41% Bidders Offer - Year 1 10% 22.00 5% 10 2.70 2.47 1.09 Bidders Offer - Year 2 20% 22.00 5% 10 4.90 4.09 1.20 Bidders Offer - Year 3 30% 22.00 5% 10 7.10 5.42 1.31 Bidders Offer - Year 4 40% 22.00 5% 10 9.30 6.49 1.43 Bidders Offer - Year 5 50% 22.00 5% 10 11.50 7.34 1.57 Bidders Offer - Year 6 60% 22.00 5% 10 13.70 7.99 1.72 Bidders Offer - Year 7 70% 22.00 5% 20 16.40 8.74 1.88 Bidders Offer - Year 8 70% 22.00 5% 20 16.40 7.99 2.05 Bidders Offer - Year 9 90% 22.00 5% 20 20.80 9.26 2.25 Bidders Offer - Year 10 100% 22.00 5% 20 23.00 9.36 2.46 Date / year bid date year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10 Actual revenues n/a R 1 R 2 R 3 R 4 R 5 R 6 R 7 R 8 R 9 R 10 0 10 15 20 30 40 50 60 70 80 90 CPI n/a CPI 1 CPI 2 CPI 3 CPI 4 CPI 5 CPI 6 CPI 7 CPI 8 CPI 9 CPI 10 m 1 1.06 1.12 1.19 1.26 1.34 1.42 1.50 1.59 1.69 1.79 During the Concession Period, under the Facility Operator Agreement, the Concession Fee is adjusted for: - Actual inflation; - Actual level of revenues Concession Fee CF 2 payable at the end of year 2 would be: CF 2 = 22*20%*1.12+5%*max(average(n/a,10,15),10*1.12 )= 22*20%*1.12+ 5%*max(12.5,11.2)= 22*20%*1.12+5%*12.5 = ZARM 5.55 Concession Fee CF 10 payable at the end of year 10 would be: CF 10 = 22*100%*1.79 +5%*max(average(70,80,90),20*1.79 = 22*100%*1.79+5%*max(80,35.8) = 22*100%*1.79+5%*80 = ZARM 26 13 13 13

Pass / fail Scoring Final ranking of Bidders Preferred Bidder Phakisa - Initiative 2 - Saldanha Supply Base Facility Summary of proposed qualification and evaluation process Step 1 Step 2 Step 3 Qualification Criteria - Administrative Responsiveness Qualification Criteria - Substantive Responsiveness Evaluation - scoring Ranking of scores Allocation of points Total points Mandatory Returnable Documents - Including but not limited to: Business Plan including Consortium agreement, term sheet, shareholders agreement (as applicable) B-BBEE verification certificate Supplier Development and B- BBEE Improvement Plans Confirmation of Black Ownership Commitments Scoring Model with duly completed Technical Experience Worksheet, Supplier Development Value Summary Worksheet, Concession Fee Offer Worksheet (excel format and signed printed copy) Proof of Certifications Copy of valid Bunkering Licence or duly completed Licence Application Valid Stevedoring and Waste Disposal Licences or Contractor s completed Licence Applications Duly completed and signed Bid Submission Schedules Supplier Development Minimum Level 4 BBBEE (*) Contributor Status Level Minimum 25% Black Ownership B-BBEE Improvement Plan showing Level 2 B-BBEE Contributor Status Level (*) is reached by the 10th anniversary of the Effective Date Technical Technical Experience Score resulting from bidding targets in the Technical Experience Worksheet at/in excess Minimum Experience Score in Scoring Model Valid Licences/compliance with conditions to obtain Licences. Certifications Financial Financial Model showing the due payment of the Concession Fee Offer over the Concession Period Financial Model Audit Letter Letter of Support From Lender, Equity Support Letter, Corporate Finance Support Letter as applicable 3-years financial statements audited Net Asset Value of past 3 years = equity contribution Supplier Development Score SD Score resulting from bidding targets in the Supplier Development Value Summary Worksheet % revenues spent on training % SA staff % local supply chain % staff being trained / year As confirmed by the Evaluation Team based the Supplier Development and B-BBEE Improvement Plan Technical assessment Technical Experience Score is carried across (70% to the technical evaluation score). Qualitative Score based on the reviews and assessment (technical, commercial, sustainability) by the Evaluation Team of the Business Plan Financial assessment NPV of Concession Fee resulting from bidding targets in the Concession Fee Offer Worksheet Concession Fee Offer to be in line with Financial Model / Business Plan Supplier Development Points Bidders ranked by score generated by Scoring Model Points proportionally allocated based to relative ranking to other bidders out of a maximum scale of 20 Technical points Bidders ranked by score generated by Scoring Model Points proportionally allocated based to relative ranking to other bidders out of a maximum scale of 20 Technical points = 90% for Technical experience points + 10% qualitative score Financial score /ranking Bidders ranked by Score generated by Scoring Model Points proportionally allocated based to relative ranking to other bidders out of a maximum scale of 20 Financial points = 90% NPV Concession Fee + 10% Variable Concession Fee Points out of 20 x 30% Points out of 20 x 30% Points out of 20 X 40% (*) or equivalent rating in terms of the Sector Code, if applicable 14

Summary Delivering and monitoring Phakisa objectives Phakisa Criteria RFP Main deliverables RFP Qualification Pass/ Fail RFP Evaluation / Scoring Points / Weighting Reporting Monitoring Socio-economic SD Level 4 Verification certificates BEE Improvement Plan Supplier Development Plan Supplier Development Value Summary Worksheet duly completed, printed and signed Confirmation of Black Ownership Commitments Based on minimum requirements (e.g. Minimum Level 4) Deliverables: e.g. SD, BEEE Improvement Plans NPV of SD targets (Scoring Model) As confirmed by review of SD Plan (Evaluation Team) Ramp-up of targets over 10 year period Points generated out of 20 relative to maximum score Total weight = 30% Annual Report: SD Targets and planning ahead SD targets are binding under Facility Operator Agreement Penalty regime Attract skills Technical Commercial Added-value services Technical Affordable entry level with commitment to improve over 10-year ramp-up Scored on NPV to incentive early targets at the best level Compliance: Certifications, Licenses or copies of Licences, as applicable, and / or licensing requirements as applicable Business Plan Experience Worksheet duly completed, printed and signed Experience Score from Experience Worksheet Scoring Model at or exceed Minimum Experience Score level. Certifications Valid Licences or compliance with licensing requirements are met Experience Score on the basis of input provided by the on the Experience Worksheet (Scoring Model ) Qualitative Assessment of the Business Plan Points generated out of 20 relative to maximum Score Total weight = 30% Experience points = 70% of total Qualitative points = 30% of total Keep bidders accountable for delivering their SD over time Annual Report : operations and planning for year ahead Certification remain in place Performance Criteria Compliance with general TNPA requirement, rules, regulations Penalty regime Qualification on specialist skills to attract best profile flexibility on mix and inclusive of contractors Qualitative assessment of overall technical solution Leave commercial flexibility but ensure best standards are applied Financial sustainable Financial Business Plan (including amongst others: Financial Model, Financial Model Audit Letter, proof of sufficient funding) Concession Fee Offer Worksheet duly completed, printed and signed Financial Model and Model Audit Letter Proof of sufficient funding 3-years financial statements audited Net Asset Value = respective equity contribution NPV of Concession Fee Offer generated by the Scoring Model using input in Template 2 Concession Fee Offer Worksheet as validated by the Evaluation Team Separate scoring for Variable Fee Benefit: allow ramp-up over a 10-year period to support affordability in line with market with an NPV approach to incentivise higher level /early benefits. Variable Concession Fee is scored separately to incentive revenues sharing Points generated out of 20 relative to maximum Score Total Weight = 40% NPV of Concession Fee = 90% of total points Variable Concession Fee = 10% of total Annual Report : financial results and planning ahead, Concession Fee Certificate Due Payment of Concession Fee Circa 1-year of fixed portion of Concession Fee as a Performance Guarantee to backup payments Leave commercial flexibility but ensure financial value is delivered Monitoring of performance will be based on Annual Report submitted to the TNPA by the Operator and providing data on: the SD targets, the commercial and financial performance for the past Contract Year as well as planning on operation and maintenance for the year ahead. The financial performance will be certified by an independent auditor (Concession Fee Certificate). 15

Illustration of bidding support process The RFP will be posted on a dedicated data room provided by ENS Bidders will receive notifications when additional documents are posted but will only be entitled to post queries to a dedicated email address. All clarification queries to be anonymised and regrouped by the Transaction Advisory team in liaison with TNPA The Transaction Advisory team will liaise with TNPA in order to address these queries. TNPA 3 Jointly develop responses to Bidders queries Transaction Advisory team & Transnet Commercial 4 Post responses to anonymised queries 1 Bidders access documents through data room Data room Access levels to safeguard information Responses to queries posted in data room 2 Restricted access, can only view / download documents Bidders send queries via email to dedicated TNPA email address Bidders 16

Bidders Actions TNPA Support Procurement process Phakisa - Initiative 2 - Saldanha Supply Base Facility Timeline in RFP Issue of RFP April16 Bid Submission Sept-16 Signing Date February 2017 Effective Date Start of Construction Target Completion Date Long Stop Date 1 2 3 Operation Commencement Date Actual Construction Completion Date 4.5-month bidding period Circa 4-month evaluation/negotiation 6-month to complete conditions precedent Planning Period 20-year concession period from Effective Date Existing EIA 4.5-month Providing clarifications Facilitating the provision supporting infrastructure dredging obligations Access to Port Facilities Existing EIA expected to accelerate bidders independent due diligence and process Licensing, other permits and consent Bidders are incentivised to start their process before the Signing Date EIA submission on the basis of its specific solution Facility Infrastructure and Facility Equipment Operation 1 Effective Date to be the earlier of (i) completion of conditions precedent, including the EIA and (ii) [6]-month post Signature date 2 20-year Concession Period starts at Effective Date. TNPA and Bidders have aligned interest to achieve revenues as early as 3 possible. Target Completion Date is as per Bid Response and becomes binding under the Facility Operator Agreement Long-Stop Date is 6 months post Schedule Operations Commencement Date. 17

Indicative dates 30/09/2016 30/01/2016 30/061/2016 01/07/2016 Preferred Bidder Date Signing Date Effective Date (actual) End date for the completion of CPs Starting point for the 20-year Concession Period 4-months 6-months post Preferred Bidder Date 30/06/2037 Start of Concession period 20-years Release of RFP [29]th April 2016 Indicative date Note Briefing Session [28 th - 29 th ]June 2016 Venue to be confirmed Site visit to be confirmed Bid Date [12] th September 2016 as indicated in RFP Preferred Bidder Date Q4 2016 as indicated in RFP As indicated in RFP Signing Date Effective Date Within [4] months of declaration of Preferred Bidder Target [31 st January 28 th January] Within [6] months post Signing Date [July 2017] Target date Start of Concession [July 2017] Target date End of Concession [30 th June 2037] Target date Target date Bidders are incentivised to accelerate fulfilling Condition Precedents Process 18

Click to edit Master title style THANK YOU 19