Autopax Passenger Services (SOC) Business Plan 2019/2020pmg-assets.s3-website-eu-west-1.amazonaws.com/Autopax... · 2019-07-18 · Business Plan 2019/2020 Page 0 of 43 Autopax Passenger

BusinessPlan2019/2020Page0of43

AutopaxPassengerServices

(SOC)

BusinessPlan

2019/2020


Tableofcontents

# Heading Pageno.1. Introduction 22. BackgroundandExecutiveSummary 23. Vision.MissionandLeadershipphilosophy 44. Legislation 65. Philosophybehindthebusiness 66. Historicalbusinessperformanceandchallenges 77. Historicalfinancialperformance 88. Marketanalysis,passengerprofileandpassengersatisfactionindex 99. ValueProposition 1110. Strengths,Weaknesses,OpportunitiesandThreats(SWOT)analysis 1111. Strategyandbusinessplanreview 1212. Businessplanningandstrategicframework 1213. Businessobjectives 1714 Appendices 20


1. INTRODUCTION

AutopaxPassengerServices(SOC)LtdalsoknownasAutopaxisawholly-ownedsubsidiaryof

PassengerRailAgencyofSouthAfrica(PRASA).Autopaxexisttoservicetheprimarymandate

ofPRASAwhichis,provideinconsultationwiththeDepartmentofTransport,forlonghaul

passengerrailandbusserviceswithin,toandfromtheRepublicintermsoftheprinciplesset

outinsection4oftheNationalLandTransportAct,2009(ActNo.5of2009).

The company derives its mandate from the shareholder’s compact. Based on the

Shareholder’scompact,Autopax ismandatedtodeliverqualityandsafe longdistancebus

passengerservicesinSouthAfricawithaviewtogrowthemarketshareandexpandingthe

businessandthuscreatingshareholdervalue.

2. EXECUTIVESUMMARYANDBACKGROUND

Autopaxhasambitionsofassumingleadershipinthelongdistanceroadpassengertransport

solutions.Theattainmentofthisambitioniscentredonthecompany’smissionofproviding

a preferred, sustainable, high quality, seamless and affordable road passenger transport

services. This business strategy is necessitated by a number of business challenges that

confrontsthecompanytoday.Intheprocessofcraftingastrategicplanthatwillreturnthe

companytoafinanciallysustainablelevel,theleadershipofthebusinessisconfrontedwith

thechallengeofeffectivelymanagingthecurrentbusinesswhilstcreatingandimplementing

thefutureAutopaxbusinessbasedonthisstrategy.

The organisation finds itself in a financially and operationally distress state requiring,

managementandleadershipwithaptitudethatcancatapultthebusinessintonewfrontiers.

The company is also confronted by a business unfavourable organisational culture that

permeateswithinitshumancapitalthatiscompoundedbythecollapseinemployeemorale

andmotivation.Thecompanyhasovertimeexperiencedadeclineincorporateandethical

culture,leadingtocollapseincorporategovernance.

Duetomajorcashflowchallengestosustainthebusiness,thereisahighnumberofthebus

fleet that remains off the road (parked due to mechanical breakdowns), the cash flow

constraints has also contributed hugely to poor fleet maintenance regime leading to

unreliabilityofservices.


Thishasinthemainresultedinunacceptablelowerlevelsinpassengernumbers,contraction

inmarketshareandreducedrevenuecollection.Theexternalcreditors’bookhasincreased

tothelevelthatthreatensthecontinuedtradingofthecompany.

ThelackofrobustInformationandCommunicationTechnology(ICT)solutionswhichisabasic

requirementinanybusoperationshasalsocontributedtothemultifacetedchallengesthat

confronts the business. These challenges include, but not limited to inadequate fleet

management and monitoring, poor revenue collection and protection systems and

inadequateinventoryandmaterialsmanagement.

2.1. Whyisthebusinessinthisstate?

During the 2014/2015 financial year the company posted a profit of R7 920 829.00,

however in the following twoyears thecompanymade losses. It isprojected that the

companywillpostlossofoverR30000000.00attheendofthe2018/2019financialyear.

It is clear that the challenges that the company is currently experiencing today are a

manifestationofwhathappenedsince2015/2016financialyear.

Managementhastakentimetoreflectontheaboveandconcludedthatthefollowingare

someofkeyreasonsthecompanyhasdeterioratedoveraperiodoftime.

a. Lackofcoretechnicalexpertise:TheCompanyhasovertimelostindividualswithcore

technicalexpertise,mostofthispositionshavenotbeingfilledorreplacedwithright

skillsduetocashflowchallengesinthebusiness.Thebusinessalsohasanumberof

employeesinmanagementandatcriticaljuniorlevelfunctionswithoutcoretechnical

skills. This challenge permeate in a number of areas in the business including the

collapse of the fleet maintenance regime in the Technical Department. The high

numberofthefleetbreakdownspointsdirectlytowardslackofcoretechnicalskillsin

thebusiness.Thissituationhasalsobeenveryprevalentintheoperationsplanning

environment like bus scheduling and dispatching which is at the core of any bus

industryoperations.Duetocash flowchallenges, thecompanyhasnot invested in

peopledevelopmenttocurtailingthischallenges.


b. Lackofmanagementandleadershipskills:Thebusinessisoperatingwithverythin

expertise at management and leadership level. This has also resulted in the

compressioninrolesduetothefactthatmanagersarethenrequiredtoexecuteand

performrolesatthelowerlevelswithlittleorcapacitytodelegate.

c. Lackofeffectiveemployeeskillsdevelopment:TheCompanyhasovertimeinvested

less and less in employee skills development as well management & leadership

developmentdue to cash flow constraints. This impacted a lot on the skills in the

companyacrossalllevelsofthebusiness.Thecompanywaspreviouslyaccreditedas

afleetrepairerbyvariousOriginalEquipmentManufacturers,thisaccreditationhas

sincebeenlost.Theissueofineffectiveemployeeskillsdevelopmentisalsoprevalent

inallspheresofthebusiness.

d. Performance management: The Company has implemented performance

management in 2018/19 and need to inculcate the culture of performance

managementtoholdpeopleaccountable.Serviceprovidersarealsomadetoaccount

onpoorservicedeliverthroughsupplierperformancemanagementprocess.

3. VISION,MISSION,VALUESANDLEADERSHIP

3.1. Vision:TobetheleaderinroadpassengertransportsolutionstothenationandSADC

memberstates.

3.2. Mission:We provide preferred, sustainable, high quality, seamless and affordable

roadpassengertransportservices.

3.3. Values:AutopaxalignswiththevaluesofPRASAbeing:

v FairnessandIntegrity-Treatingourcustomersandourcolleaguesthesameaswe

wouldliketobetreated.

v Serviceexcellence-Providethekindofservicethatensuresthatourcustomerleaves

withasmile.

v Performancedriven-Developingtheabilitytoventureintonewbreakthroughareas

ofopportunitywhilstofferingqualityproductstoourcustomers.


v Safety-Ensuringourcustomersandcolleaguesenjoytheirjourneyandarrivesafely

andrefreshed.

v Communication-Sharinginformationwithourcustomersandcolleaguesinanopen

andhonestway.

v Teamwork -Working togetherwithour customers to achievea commongoal and

recognisingeachother’sworth.

3.4. Leadership

The business need to embark on a development of leadership.The job ofmanagers and

supervisorsatAutopaxistomakeiteasierfortheiremployeestoservecustomers—both

internal andexternal. Leadingotherpeople atAutopax is not a right, it is aprivilegeand

responsibilitythatmustbecontinuouslyearnedbyservingandmentoringotherstohelpthem

growbysharinginformation,providingrespectfulfeedbackandbeingaccountable.

Autopax considers its leadership as conduit of its value system and has thus adopted an

approachtowardstransformingeachleaderintoa“ServantLeader”.Theapproachtowards

servantleadershipemphasizestheservingofothersastheleader’snumberonepriority,a

holistic approach towork, promoting a senseof community, and the sharingof power in

decisionmaking.

Complementary to the organizational values as detailed earlier, the following additional

characteristicsorattributeswillbeactivelycultivatedintheleadershipofteamAutopax.

v Listening:Acriticalcommunicationtool,necessaryforactivelydemonstratingrespectfor

others.

v Empathy:Theabilitytomentallyprojectone’sownconsciousness intothatofanother

individual.

v Healing: The servant leader recognizes the sharedhumandesire to findwholeness in

one’sself,andsupportitinothers.

v Awareness: The ability to practice “intelligent opportunism” in a quest to maximized

opportunitiesforAutopax.

v Persuasion: The effective servant-leader builds group consensus through ‘gentle but

persistentpersuasion”anddoesnotonlyrelyonpositionasasourceofpower.

v Conceptualization:Theservantleadermustconceivesolutionstoproblemsthatdonot

currentlyexisttoday(ScenarioPlanning).


v Stewardship: Organizational stewards, or ‘trustees’ are concerned not only for the

individual followerswithin the company, but also the organization as awhole and its

impactonandrelationshipwithallofsociety.

v Commitmenttothegrowthofpeople:Ademonstratedappreciationandencouragement

ofothers.Thesecretofinstitutionbuildingistobeabletoweldateamofsuchpeopleby

liftingthemuptogrowtallerthantheywouldotherwisebe.

v Courageous: Having uncomfortable conversation and saying what needs to be said,

communicatingopenlywhenyoudon’thaveall theanswersandmakingadecision to

moveahead.

v Perseverance:Abilitytopersevereevenwhenthegoingistoughandtheteammoraleis

low.

v Decisiveness:Abilitytomakequickdecisionsinadifficultorcomplicatedsituation.

4. LEGISLATIVEMANDATE

ThecraftingoftheAutopaxbusinessplantakescognisanceofthelegislativeenvironment

withinwhichthecompanyoperateswithspecificreferencetothefollowing:

v TheNationalLandTransportAct(Act5of2009).

v Legal Succession Act of South African Transport Services (SATS) Act of 1989 as

amended.

v NationalLandTransportTransitionAct(Act22of2000).

v PublicFinanceManagementAct(Act1of1999)

v CompaniesAct(Act71of2008)

v LabourRelationsAct(Act66of1995)

v EmploymentEquityAct(Act55of1998)

v BasicConditionsofEmploymentAct(Act75of1997)

5. PHILOSOPHYBEHINDOURBUSINESS

Autopax as a subsidiary of the Passenger Rail Agency of South Africa exist to service the

primarymandateofPRASA.Thecompanyhasasubstantialimpactonthecountry’sIntegrated

PublicTransportNetwork(IPTN).ItisbasedonthisviewthatAutopaxhasadirectimpacton

thesocio-economictransformationandinitiativesofthecountry.ThisBusinessPlanbeginto


ensure that Autopax does not only regain its position as a leader in long distance road

passengertransport(includingthecrossborderoperationsinkeyidentifiedareas),butwill

effectively and efficiently support Rail Operations within the PRASA Group. The Autopax

businessstrategyispremisedonthefactthattheturnaroundofPRASARailOperationscan

be fast-tracked through robust functioning of the bus operations. The companywill also

strengthenitsCharterServicesoperationsinitsquesttoimproveitsfinancialandoperational

performance.

6. HISTORICALBUSINESSPERFORMANCEANDCHALLENGES

The company only posted a profit during the 2014/2015 financial year. At the end of

2018/2019 financial year the total amountofhistoricdebt accumulated in thepast three

years will be circa R206 267 459.00 and R603 656 501.00 which is made up of external

creditorsbookandPRASAdebtrespectively.Thetotalnumberofbusesfullyoperationalon

road has been increased to circa 180 permonth during the 2018/2019 financial years in

contrastto90busespermonthduringthelastquarterof2017/2018financialyear.Basedon

theabove,thecompanycontinuestoidentifyareasthatrequiresurgentattentiontoimprove

thefinancialandoperationalperformanceofthebusinessasperofthisbusinessplan.

a. Decrease in fleet availability –Whilst the number of operational fleet has increased

duringthecurrentfinancialyear,thenumberofoperationalfleetremainslow.Morethan

halfofthetotalfleetisparkedatthedepotorwithvariousserviceprovidersduetoeither

mechanical breakdowns or accidents. The reduction in fleet availability has direct

detrimenteffectonrevenue,passengersandcustomersatisfaction.

b. Inadequatefleetmaintenanceregime–Thecurrentfleetisovereight(8)yearsoldand

60%ofthefleethasexceeded800000kilometres.Duetotheageofthefleetthecostof

maintenanceisveryhigh.Thecurrentfinancialstateofthebusinessmakesitdifficultto

provide adequate fleet maintenance regime. The inadequate preventative fleet

maintenanceregimehasanegative impactonthedurable lifespanofthefleetaswell

reliabilityoftheservice.

c. Reductioninrevenueandpassengernumber–Sincethe2014/2015financialyear,the

companyhasbeenexperiencingadeclineinfarerevenuecoupledwithincrease in


netlosses.Thisisdirectlyattributabletothereductionexperiencedinpassengernumbers

duetoreducedfleetavailableforalloperationalrequirements.Thefactthatthecompany

isoperatingolderfleetcreatesachallengeintermsofcompetitivenesswithpassengers

preferringnewfleet.

d. Unsustainablecoststructure–TheCompanyhasexperiencedamarkedincreaseinthe

coststructureofoperatingthebusiness.Theincreaseintheoperationalcostisas a

result of reduced revenue collection. Employee costs constituted 42% of operational

expenditureasattheendof2018/2019financialyear,thisfigureisexpectedtoremain

thesameattheendof2019/2020financialyear.Theotheroperationalcoststhathave

increasedinthelastthreefinancialyearsincludefuelandgeneraloperationalcosts.

e. Lack of infrastructure – The Company does not have the requisite infrastructure to

adequately run its operations. This includes Depots, Information and Communication

technologyandfleetmaintenanceworkshops.Thiscontributesdirectlytopoorbalance

sheet, ineffectiverevenuecollectionandprotectionsystemsinthecompanyaswellas

inabilitytoeffectivelymanageallkeyresourcesinthebusinessincludingbutnotlimited

tofleet,fuel,passengersandinventory.

7. HISTORICALFINANCIALPERFORMANCE

2013/2014 2014/2015 2015/2016 2016/2017 2017/2018TotalRevenue 848058302 913897048 943216225 915686367 568152487FareRevenue 683452962 750688611 709299138 616971349 509658791OperationalExpenditure 888035246 879603569 959992612 1004366494 833446322Profit/(Loss) -75102504 7920829 -28548430 -212457978 -304590046PassengerNumbers 2737150 2725890 2515873 2252011 1898777TotalEmployees 1770 1447 1619 1376 1076EmployeeCosts/Opex 32% 35% 36% 37% 42%CustomerSatisfaction 74% 77% 74% 62% 62%KilometresTravelled 54484358 55556374 57627360 53623691 38262447

Companyperformanceinthepastfive(5)financialyears


8. MARKETANALYSIS,PASSENGERPROFILEANDPASSENGERSATISFACTIONINDEX

a. MarketShareAnalysis

AccordingtotheLufthansastudyof2012,Autopaxbrandshad25%Marketsharewithinthe

longdistancebuspassengerindustry.Thisstudywashowever,basedonthefleetstrengthof

Autopax and route network. A follow up study was conducted which evaluated Autopax

market shareat23%of themarketandwasbasedoncompetitor revenueandpassenger

numbers.

b. CustomerprofileAnalysis

TARGETMARKET(Researchresults:Nov2015)CitytoCity TransluxPrimaryTargetMarket

• LSM2-4• 95%Black• Females• Age18–65• Urban(travellingtoRural)• MonthlyIncome–R2000–R4000

PrimaryTargetMarket• LSM4–6• MajorityBlack• MajorityAge:18–35(youth)• Over50%aresingle• MonthlyIncomeR2000–R10000

ReasonsforTravel• GoingHome• Vacation• Trade

ReasonsforTravel• GoingHome• Vacation

WhyCitytoCity

• Price• Routes(traveltoruralareas)• Theybelieveitsvalueformoney

WhyTranslux

• LuxuryandComfort• Speedoftravel• SuitableRoute

c. Industryanalysis

• 38millioncitizensliveinhouseholdswithnoaccesstocars

• 80%ofadultsdonothaveadriver’slicense

• 7millionworkersandlearnersusepublictransport

• 13.7millionpeopleusedpublictransportatleastonceaweekwhile7millionuseacar

(Source:NHTS2013)


d. Competitoranalysis

Translux CitytoCityDirectCompetitors• Greyhound• Intercape

DirectCompetitors• Cityliner• EldoCoaches• APM

IndirectCompetitors• Lowcostairlines

IndirectCompetitors• MinibusTaxi’s• ShosholozaMeylTrains

e. KeyResearchinsightsonLongDistancebuspassenger:Choiceoftransportmode

• Costoftransport-Price• Speed(numberof“unproductive”hoursspent)• Reliabilityofservice(includingdepartureandarrivaltime)• Frequencyofservices• Safetyofpassengers


9. VALUEPROPOSITION

10. STRENGTHS,WEAKNESSES,OPPORTUNITIESANDTHREATS(SWOT)ANALYSIS


11. STRATEGYANDBUSINESSPLANREVIEW

Thestrategyandbusinessplanreviewisaboutthefollowingmilestones:

v Thestrategyandbusinessplanreviewfocusesonmajorfinancialandoperational

turnaroundofthebusiness.

v ItisaimedatensuringthatAutopaxbecomesafinanciallyviableentity,capableof

deliveringonPRASA’sprimarymandateaspertheLegalSuccessionAct.

v ItisalsoaimedatrepositioningAutopaxtoeffectivelyandefficientlysupportPRASARail

operations.

v Itisfocusedoninvestinginnewcapacityandresourcesthatwillmeetpassenger

demandsinamediumtolongtermhorizon.

v Reviewingandaddressingthecompany’sweakbalancesheet.

12. BUSINESSPLANNINGANDSTRATEGICFRAMEWORK

The2019/2020businessplanwillensurethatwhilstitsupportthecompany’scorestrategic

direction,planalsobegintoexploreitsstrategicgrowthtrajectory.Tothisendthecompany

hasidentifiedpossiblegrowthopportunitiesintheintercitybusiness,CrossBoardoperations

as well Charter. The company will improve synergies with Rail Operations as part of its

strategicgrowthplans.Thisapproachwillrequirethecompanytoreviewitsfleetcapacityto

meet the anticipated demand. Measures are afoot to implement this growth trajectory

focusingontheradicalfleetrecoveryplan.

a. Plannedfleetoperations(Busallocation)

# Growtharea CurrentAllocation NewAllocation1 IntercityScheduledservices 178 2602 Charterservices 0 333 CrossBoarderservices 2 504. RailOperations 0 72Totaloperationalfleet 180 415**Thisfigureisinclusiveof10%(41)Technicalsparecapacity.


b. Thestrategy–Growthfocused

Thecompany’sgrowthtrajectorystrategyinabouttheincreaseinthenumberofoperational

busesandwillpivotaroundthefollowing:

v OrganicgrowthinIntercityandCrossBorderoperations–Thecompanyhasidentifieda

numberofroutesthatpresentagrowthopportunityforthebusiness.Tothisend,the

company will be lodging applications with the relevant authorities with the aim of

increasingthenumberofintercityservices.

v PRASARailoperations–Duringthe2014/2015financialyear,thecompanywasableto

effectivelyandefficientlysupportrailoperationsleadingintointer-companyrevenueof

overR65000000.00.TheAutopaxstrategyandbusinessplanareaimedatreturningthe

companytothisposition.ThisplanwillassistPRASARailoperationsduringoccupations

andemergencies.

v CrossBorderoperations–Thecompanyiscurrentlyoperatingtwodailyservicesbetween

Gauteng and Maputo. The company has recently acquired fourteen (14) permits to

operatebetweenGautengandZambia (Lusaka).Thecompany isalso intheprocessof

acquiring additional cross operating permits focusing at Swaziland, Lesotho, Namibia,

BotswanaandZimbabwe.

v Charterservices–ThechartermarketremainsahugeopportunityforAutopaxtowards

therealisationofthegrowthtrajectorystrategy.Thecompanyhasinthelasttwofinancial

yearsfailedtoconvertanumberofcharteropportunities.Withtheincreaseinthenumber

ofoperationalbuses,thecompanywillbeinapositiontofullyexplorethismarket.

v FeederservicesforMetrorail–ThecompanyisexploringplanswithMetrorailwiththe

aimofensuringthatitisinapositiontoprovideMetrorailwithfeederservicesasperthe

LegalSuccessionAct.


c. TheStrategicframework


d. Keystrategiclevers

#Strategiclevers

Strategicintent Focusareas Outcomes

1

Financialmanagement,viabilityandsustainability

Financialviabilityandsustainability

Routeoptimisation

Improverouteprofitabilityandperformance

Costoptimisation

ImplementassetmanagementstrategyReductioninthecostofdoingbusinessEstablishoptimalfundingmodel(OPEXandCAPEX)

RevenueOptimisation

Achievefarerevenuetargets.StrengthenrevenueinspectioncapacityAchievesolvencyandliquidityratios

2EffectiveandEfficient

Operations

Operationalexellenceandincreasedreliability

Assetoptimisation Operateroadworthyfleet

ReductioninbreakdownsReductioninmaintenancecosts

RevenueOptimisation

Operatingcleanbuses

OntimedeparturesEnablepeopleandprocesseswithInformationandCommunicationTechnologyAchieveaccreditedstatusasapreferredrepairandmaintenancecentreDocumentedStandardOperatingProcedures

Contributetosocio-

economicpoliciesof

Government

Costoptimisation

Blackeconomicempowerment

ImprovemobilityofcitizensPromoteenterprisedevelopmentEmploymentcreation(InternshipandLeanership)


SupplyChainoptimisation

Costoptimisation

ImplementStrategicsourcing

CorporateGovernance

Controloptimisation

EradicationofirregularexpenditureEradicationoffruitlessandwastefulexpenditureEnhancedethicalculture

Compliancetopolicies,proceduresandlegislationCleanaudit

3ExcellentCustomerservice

HighlevelsofCustomercentricity

Customercentricity

ImprovedcustomersatisfactionindexAgileandcustomerfocusedemployeesPassengergrowthProfessionalizationofserviceofferingRebuildbrandtrustandloyalty

4 Performanceexcellence

Capacitationofemployees

Performancemanagement

EmployeetraininganddevelopmentEmbeddedperformancecontracting,assessmentandrewardregimeEnablingaperformancecultureFitforpurposeorganisationalstructuresupportedbyproperjobgradingandsalarystructureregimeLeadershipandmanagementdevelopmentprogrammesImplementbusinessbasedChangemanagementinitiatives


13. BUSINESSOBJECTIVES

a. Routeoptimization

The company continues to review the current routes and the schedule with a view of

identifyingprofitableandnon-profitableroutes.Thisprocesshasculminatedinthereduction

ofcertainrouteswithaviewtocurtailthecostofdoingbusiness.Theprocesswillensurethat

profitablerouteswillareinapositiontogenerateaminimumof75%seatutilisationoneach

serviceoff-peakand95%seatutilisationduringpeak.Allidentifiednon-profitablerouteswill

beterminatedwithafterduemonitoring.

Itismanagement’sconsideredviewthattheimplementationoftheRouteOptimisationwill

leadthecompanytorealisethedesiredfinancialmanagement,viabilityandsustainability.

b. Revenueoptimisation

Thecompanyisembarkingonaradicalorganicgrowthstrategythroughmarketpenetration

andmarketdevelopment.Themainaimofpursuingthisradicalgrowthstrategywillbeto

ensure that the company increases its market share through improved and reliable bus

service.Themarketpenetrationstrategywillhaveahighsuccessrategiventhepassenger

loyalty towards both Brand Translux and City-to-City. On the other hand the market

development growth strategy will be realised through strengthening and resourcing the

AutopaxCharterServices,completesupportofRailOperationsandCrossBorderServices.The

Revenueoptimisationwill focusonRevenue generation, Revenue collection andRevenue

protection.

Itismanagement’sconsideredviewthattheimplementationoftheRevenueoptimisationwill

leadthecompanytorealisethedesiredfinancialmanagement,viabilityandsustainability.

c. Assetoptimisation

ThroughtheprocessofdefiningwhatwillmakeAutopaxwork,thebusinessplanandstrategy

hasdeterminedthecriticalityofAutopaxoperatingtheoptimumcomplementoffleet.The

company will immediately embark on a process of identifying and utilising just the right

optimumfleetlevel.Theprocesswillbesupportbyarobustfleetmaintenanceregimethat

will ensure that all operational vehicles remain on the road all the times. Based on this

positionAutopaxwill also ensure that there is adequate fleet to supportRailOperations,

strengthenCharterservicesandpursuetheCrossBoardermarket.


Theimplementationoftheassetoptimisationprocesswillensurethatthecompanyrealises

thedesiredeffectiveandefficientoperations.

d. Costoptimisation

Managementhasengagedinarobustanddetailedprocessofunderstandingthecompany’s

revenuegenerationpotentialandthecostofdoingthebusiness.Thisprocesswasintended

to ensure that the company’s cost structure is proportionate to the revenue generation.

Other measures that will be implemented to realise this objective will include total

moratoriumonallexternalpermanentappointments,unlessapprovedbytheChiefExecutive

Officer.Throughthisprocessthecompanywillalsoreviewtheimpactofinter-companycosts

onthefinancialmanagement,viabilityandsustainabilityofAutopax.ThefactthatAutopax

doesnotowntheinfrastructurethatitusestooperateitscorebusinessposesachallengeto

thebalancesheetofthecompany.

Theimplementationofthisobjectivewillensurethatthecompanyrealisesthestrategiclever

of financial management, viability and sustainability as well as effective and efficient

operations.

e. Controloptimisation

Based on the harsh reviews by the Auditor-General South Africa and internal Risk

Management, the Business plan will also focus on reviewing and improving the control

environment.Thisprocesswillfocusonreviewofallbusinessprocesses,policiesandstandard

operatingprocedurestoensurethatthecontrolenvironmentisstrengthened.

Autopaxlikemanyofitscompetitorsintheindustryisoperatinginahighlytechnologically

advanced industry. To this end, the business plan will also focus on implementing the

InformationandCommunicationTechnologythatsupportstheday-to-dayoperationsofthe

business.Thecompanywillalsoensurethatinthenearfutureitexplorestheopportunities

offeredbytheworldofInternetofThings(IoT)forimprovingefficaciesintheoperationsof

thebusinessincludingimplementingmeasuresthatwilldifferentiatesthecompanyfromits

competitorsintheeyesofthepassenger.Theobjectiveofoptimisingthecontrolenvironment

willalsorequireentrenchingthecultureofconsequencemanagementinlinewiththeBoard

approvedPerformanceManagementpolicy.

This objective will ensure that the business realises the strategic lever of effective and

efficientoperationsandperformanceexcellence.


f. SupplyChainoptimisation

Due to thenatureof itsoperations,Autopax requires a strengthenedand fully functional

procurementcapability.Thiswillbesupportedbyabusiness focusedandaligneddemand

managementframework.TherecentlyboardapprovedSupplyChainManagementpolicywill

implemented swiftly supported by line management capacity building programmes. The

companywillplacemostemphasiseonstrategicsourcingandsupplierdevelopmentfocusing

onWomen,YouthenterprisesandCooperatives.

ThisobjectivewillensurethatAutopaxrealisesthestrategicleverofeffectiveandefficient

operations.

g. Performancemanagement

Instillingaperformancemanagementbasedcultureinthebusinessisatthecentreofthecompany’s

questtowardsperformanceexcellence.TheBoardhasapprovedthecompany’spolicyon

PerformanceManagement.AllemployeesonManagementlevelswillbecontractedonperformance

management.Thecompanywillalsoensureconsequencemanagementinthebusinesstoentrench

theperformancebasedculture.

ThisobjectivewillensurethatAutopaxrealisesthestrategicleverofPerformanceexcellence.

h. Customercentricity

Autopax acknowledges that it is operating within a highly competitive environment. The

business plan will ensure that the company realise its full potential through passenger

confidenceinthetwobrands.Thecompanywillalsofocusonreclaimingitsapexpositionas

adominantplayerintheindustry.Thisobjectivewillberealisedthroughon-timedeparture

management,effectiveen-routemonitoringwithconsequencemanagement.Thecompany

willensure improvedqualityofservicethroughfocusedcustomerserviceandprovisionof

passenger friendly clean fleet. The communication between the Operations and Sales

departmentswillbestrengthenedtoensurethatpassengerexperienceisimproved.Thiswill

ledtoincreaseinmarketshareandimprovedcustomersatisfactionindex.

This objectivewill ensure that Autopax realises the strategic lever ofexcellent customer

service. It is management’s considered view that the implementation of the customer

centricitywillleadthecompanytorealisethedesiredExcellentCustomerService.


14. Appendices

14.1. 2019/2020PredeterminedObjectives

14.2. 2019/2020AnnualPerformancePlan(APP).

14.3. BusinessplanRiskregister

14.4. 2019/2020Budget


15.1. 2019/2020PredeterminedObjectives

Farerevenue R441579851IncreaserevenuetoR761480558by

March2020

Farerevenue-Luggage R1336020IncreaseluggagerevenuetoR3000000

byMarch2020

Farerev-Hire R0IncreaseFarerevenuehi retoR65000

000byMarch2020

Liquidityratio ImproveLiquidi tyratio 0.22Improvel iquidi tyratioto0.47byMarch

2020

Solvencyratio ImproveSolvencyratio 0.30Improvesolvencyratioto0.7byMarch

2020

FleetAvai labi l i ty 32%fleetAvai labi l i ty 100%Fleetava i labi l i tybyMarch2020

Bus Servicing(OnTimeservicerate)

76%OntimeServiceRate 100%ontimeserviceratebyMarch2020

Breakdowns per60000km 0.41 1breakdowns per60000kms

Accidents perki lometres travel led

189accidents per24635357ki lometres travel led

<171accidentsper51106264kilometresbyMarch2020

Fata l i ties pernumberofpassengers transported

0`fata l i ties per1237252passengers transported

<0fatalitiesper2492098passengersbyMarch2020

Injuries pernumberofpassengers transported

19passengers injuries per1237252passengers

transported

<19passengersinjuriesper2492098passengersbyMarch2020

ISO9001(2015)&SANS10399

ISO9001(2015)&SANS10399certi fication

ISO9001(2015)&SANS10399certi fication

100%mainta inanceofISO9001of2015andSANS10399Certi fication

National/Cross borderPermits Management

Mainta inCross BorderPermits andconvertNational Permits toOperatingl i censes

0100%bus fleetpermits renewedand100%permits convertedintooperatingl i censes as perNLTAActandCBRTAAct

Fuel Consumption 36.94Li tres /100km 37Li tres /100km

EnterpriseWideRiskManagement

0.0

100%implementationofmitigatingcontrols and20%reductionof

extreme/highri sks tolowrisks byMarch2020

SafetyHealthEnvironmentandQual i tyManagement

0

Statutorydeadl ines met:100%Compl iantwithAct85of1993requirements andmainta inISO9001:2015andSANS10399

certi fication

AuditResult WaitingforResultsUnqualifiedReportforFinancialandPerformanceInformation2019/2020

NetworkAvai labi l i ty 90%NetworkAvai labi l i ty90%NetworkUptimeAvai labi l i tyby

March2020

Speci ficationtoserveatBAC

DevelopandImplement2CorebusinessSolutionsbyMarch2020

Contracthas beens ined.Projectplantobe

fina l i sedby12October2018

IntegratesalesandoperationswithOperationbyMarch2020

Validcontracts(%) Validcontracts40%

100%va l idContracts as percontracts regis terbyMarch2020

SupplierPerformance(%) SupplierPerformance40% Manage100%Suppl ierPerformancefor

contractl i s tedonthecontracts regis terbyMarch2020

Costsavingoncontractnegotiations

Costsavingoncontractnegotiations3.23%

10%CostsavingfromContractNegotiationsbyMarch2020

BEESpend 108%BBBEEspend 115%BBBEEspend

Increasedpassengers/patronagegrowth(LongDis tanceOperations)

1237252passengers/patronageonlongdis tances routes

2492098passengers/patronageonlongdis tances routes byMarch2020

OnTimeDepartures fromdeparturepoints

79%ontimedepartures 95%ontimedepartures byMarch2020

ReducedPassengerCompla ints

0.392<3%PassengerComplaintson

passengerstransportedbyMarch2020

CustomerSatis factionImproved(MarketSurvey)

WaitingforResults80%CustomerSatis factionratingfor

AutopaxbyMarch2020

PerformanceManagement

Signedperformancecontracts andconclus ionofperformancereviews

formanagement

89%Performanceagreements and10%performanceReview

100%PerformanceReviews ofa l l (Management)s taffbyMarch2020

Tra iningandDevelopment

Tra iningplanfortheBus iness

Obtained22%ofidenti fiedtra iningneeds

Obtain80%ofidenti fiedtra iningneeds byMarch2020

ContributetosocioeconomicpoliciesofGovernment

EmploymentEquityompl iancewith

governmentpol icyinterms ofEE

040%jobopportunities forYouthand

peoplewithspecia l needs

Personnel costs tructure Payrol l data integri ty 0 0%overpayments

Employeecosts Personnel cost(employee

settlementcost)0 20%reductioninsettlementcosts

AnnualPerformancePlanAPP2019/2020

Targets

ExcellentCustomerServices

OperationalExcellence

Customercentricityoptimisation ServiceExcellence

PerformanceExcellent


Control Optimisation


FinancialViabilityandSustainability


ValueforMoneythroughSmartandEfficientSupply

chainManagement(SCM)

ControlOptimisationCorporateGovernance

OperationalExecellence

EffectiveandFunctionalICT

systems Prel iminarysystemdes ignandimplementationofbus iness appl ication

EffectiveandEfficientoperations

AssetOptimisation

AssetOptimisationRobustFleetMaintenanceProgramme


ControlOptimisation

PassengerandRoadSafety

FinancialManagement,ViabilityandSustainability


AssetOptimisationOperational GeneratedRevenue

CostOptimisation

STRATEGICOBJECTIVE

STRATEGICINTENNT

StrategicPriorityAPXKeyPerformance

AreaPerformanceIndicator

Base 2019/20



15.2. 2019/2020AnnualPerformancePlan(APP).

Farerevenue R441579851IncreaserevenuetoR761480558by

March2020 R186572673 R186442503 R198957108 R189528274

Farerevenue-Luggage R1336020 IncreaseluggagerevenuetoR3000000byMarch2020

R750000 R750000 R750000 R750000

Farerev-Hire R0IncreaseFarerevenuehiretoR65000

000byMarch2020R17000000 R16000000 R16000000 R16000000

Liquidityratio ImproveLiquidi tyratio 0.22Improvel iquidi tyratioto0.47byMarch

2020Increase liquidity ratio to 0.28 Increase liquidity ratio to 0.34 Increase liquidity ratio to 0.4 Increase liquidity ratio to 0.47

Solvencyratio ImproveSolvencyratio 0.30Improvesolvencyratioto0.7byMarch

2020Increase solvency ratio to 0.4 Increase solvency ratio to 0.5 Increase solvency ratio to 0.6 Increase solvency ratio to 0.70



STRATEGICOBJECTIVE



Targets

Base 2019/20 Quarter1 Quarter2 Quarter3 Quarter4

STRATEGICINTENNT

FinancialManagement,ViabilityandSustainability

CostOptimisation

Operational GeneratedRevenue

AssetOptimisation


FleetAvai labi l i ty 32%fleetAvai labi l i ty 100%Fleetava i labi l i tybyMarch2020 100%Fleetava i labi l i ty 100%Fleetava i labi l i ty 100%Fleetava i labi l i ty 100%Fleetava i labi l i ty

Bus Servicing(OnTime

servicerate)76%OntimeServiceRate 100%ontimeserviceratebyMarch2020 100%ontimebus servicerate 100%ontimebus servicerate 100%ontimebus servicerate 100%ontimebus servicerate

Breakdowns per60000km 0.41 1breakdowns per60000kms 1breakdownper60000kms 1breakdownper60000kms 1breakdownper60000kms 1breakdownper60000kms

Accidents perki lometres

travel led

189accidents per24635

357ki lometres travel led

<171accidentsper51106264

kilometresbyMarch2020

<55accidents per12638057

ki lometres travel led







Fata l i ties pernumberof

passengers transported

0`fata l i ties per1237252


<0fatalitiesper2492098passengersby

March2020

0fata l i ties per614879




0`fata l i ties per638661




Injuries pernumberof


19passengers injuries per

1237252passengers

transported

<19passengersinjuriesper2492098

passengersbyMarch2020

<5passengers injuries per

614879passengers

transported

<5passengers injuries per621

294passengers transported





ISO9001(2015)&

SANS10399

ISO9001(2015)&SANS

10399certi fication

ISO9001(2015)&SANS

10399certi fication

100%mainta inanceofISO9001of2015

andSANS10399Certi fication

Reviewcoreandsystem

processes andprocedures

Re-certi ficationauditforISO

9001:2015andSANS10399

100%mainta inanceofISO9001

of2015andSANS10399

Certi fication

100%mainta inanceofISO9001of

2015andSANS10399Certi fication

National/Cross

borderPermits

Management

Mainta inCross Border

Permits andconvert

National Permits to

Operatingl i censes

0

100%bus fleetpermits renewedand

100%permits convertedintooperating

l i censes as perNLTAActandCBRTAAct

100%bus fleetpermits

renewedand100%permits

convertedintooperating

l i censes

100%bus fleetpermits renewed

and100%permits convertedinto

operatingl i censes



operatingl i censes



operatingl i censes

Fuel Consumption 36.94Li tres /100km 37Li tres /100km 37Li tres /100km 37Li tres /100km 37Li tres /100km 37Li tres /100km

EnterpriseWideRisk

Management0.0

100%implementationofmitigating

controls and20%reductionof

extreme/highri sks tolowrisks byMarch

2020

50%implementationof

mitigatingcontrols and5%

reductionofextreme/highri sks

tomoderateri sk

75%implementationofmitigating

controls and5%reductionof

extreme/highri sks tomoderate

ri sk

90%implementationof


reductionofextreme/highri sks

tolowrisk

100%implementationof


reductionofextreme/highri sks to

lowrisk

SafetyHealthEnvironment

andQual i tyManagement0

Statutorydeadl ines met:100%Compl iant

withAct85of1993requirements and

mainta inISO9001:2015andSANS10399

certi fication

100%Compl iantwithAct85of

1993requirements andISO

9001:2008andSANS10399

100%Compl iantwithAct85of1993

requirements andISO9001:2008

andSANS10399



9001:2015andSANS10399



9001:2015andSANS10399

AuditResult WaitingforResultsUnqualifiedReportforFinancialand

PerformanceInformation2019/2020N/A N/A N/A

UnqualifiedReportforFinancial

andPerformanceInformation

2019/2020

NetworkAvai labi l i ty 90%NetworkAvai labi l i ty90%NetworkUptimeAvai labi l i tyby

March2020

90%NetworkUptime

Avai labi l i ty90%NetworkUptimeAvai labi l i ty 90%NetworkUptimeAvai labi l i ty 90%NetworkUptimeAvai labi l i ty

Speci ficationtoserveat

BAC

DevelopandImplement2Corebusiness

SolutionsbyMarch2020

Developandapproveuser

requirementSpeci fication

Publ ishthetender,Eva luateand

awardDevelopandtestthesolution Deploythesolution

Contracthas beens ined.

Projectplantobe

fina l i sedby12October

2018

Integratesalesandoperationswith

OperationbyMarch2020

Systemdes ignand

developmentSystemdes ignanddevelopment TestingandUAT Implementation

Validcontracts(%) Validcontracts40%

100%va l idContracts as percontracts

regis terbyMarch2020

100%va l idContracts as per

contracts regis ter


contracts regis ter


contracts regis ter


contracts regis ter

SupplierPerformance(%) SupplierPerformance

40% Manage100%Suppl ierPerformancefor

contractl i s tedonthecontracts regis ter

byMarch2020

Manage100%Suppl ier

Performanceforcontractl i s ted

onthecontracts regis ter

Manage100%Suppl ier

Performanceforcontractl i s tedon

thecontracts regis ter

Manage100%Suppl ier

Performanceforcontractl i s ted

onthecontracts regis ter

Manage100%Suppl ier

Performanceforcontractl i s tedon

thecontracts regis ter

Costsavingoncontract

negotiations

Costsavingoncontract

negotiations3.23%

10%CostsavingfromContract

NegotiationsbyMarch2020


Negotiations


Negotiations


Negotiations


Negotiations

BEESpend 108%BBBEEspend 115%BBBEEspend 115%BBBEEspend 115%BBBEEspend 115%BBBEEspend 115%BBBEEspend

Quarter3 Quarter4


AssetOptimisation

CorporateGovernance


STRATEGICOBJECTIVE

STRATEGICINTENNT



Targets

Base 2019/20 Quarter1 Quarter2

ControlOptimisation

EffectiveandFunctionalICT

systems Prel iminarysystemdes ign

andimplementationof

bus iness appl ication


EffectiveandEfficientoperations

AssetOptimisationRobustFleetMaintenanceProgramme


ValueforMoneythroughSmartandEfficientSupply

chainManagement(SCM)

ControlOptimisation

PassengerandRoadSafety



Increasedpassengers/patronagegrowth(LongDis tanceOperations)


2492098passengers/patronageonlongdis tances routes byMarch2020





OnTimeDepartures fromdeparturepoints

79%ontimedepartures 95%ontimedepartures byMarch2020 95%ontimedepartures 95%ontimedepartures 95%ontimedepartures 95%ontimedepartures

ReducedPassengerCompla ints

0.392<3%PassengerComplaintson

passengerstransportedbyMarch2020<3%PassengerComplaintson

passengerstransported<3%PassengerComplaintson



passengerstransported

CustomerSatis factionImproved(MarketSurvey)

WaitingforResults80%CustomerSatis factionratingfor

AutopaxbyMarch2020N/A N/A N/A

80-%CustomerSatis factionrating

PerformanceManagement

Signedperformancecontracts andconclus ionofperformancereviews

formanagement

89%Performanceagreements and10%performanceReview

100%PerformanceReviews ofa l l (Management)s taffbyMarch2020

100%Performancecontracts 100%Performancereviews N/A 100%Performancereviews

Tra iningandDevelopment

Tra iningplanfortheBus iness

Obtained22%ofidenti fiedtra iningneeds

Obtain80%ofidenti fiedtra iningneeds byMarch2020

Obtain20%ofidenti fiedtra iningneeds




ContributetosocioeconomicpoliciesofGovernment

EmploymentEquityompl iancewith

governmentpol icyinterms ofEE

040%jobopportunities forYouthand

peoplewithspecia l needs Develops trategytoattract

requiredappl icants Implementtargetedrecrui tment

as pers trategyImplementtargetedrecrui tment

as pers trategyMonitoringandevaluation

Personnel costs tructure Payrol l data integri ty 0 0%overpayments 0%overpayments 0%overpayments 0%overpayments 0%overpayments

Employeecosts Personnel cost(employee

settlementcost)0 20%reductioninsettlementcosts 5%reductioninsettlementcost 5%reductioninsettlementcost 5%reductioninsettlementcost

overa l l 20%reductioninsettlementcost


STRATEGICOBJECTIVE

STRATEGICINTENNT StrategicPriorityAPX KeyPerformance

Area PerformanceIndicatorTargets

Base 2019/20 Quarter1 Quarter2 Quarter3 Quarter4

ExcellentCustomerServices

Customercentricityoptimisation ServiceExcellence

PerformanceExcellent

Control Optimisation

OperationalExcellence




15.3. BusinessPlanRiskRegister

NO TURNAROUNDFOCUSAREAS

RISK INHERENTRATING

STATUS MITIGATION RESIDUALRATING

1. FinancialManagementViability andSustainability

Directors trading recklesslydue to breach of solvencyand liquidity thresholdparameters(liquidation)

Extremerisk Materialised • Reviewofcashflowandprioritisationofsupplierspaymentsbasedonageanalysis•Reviewoffinancialratios(LiquidityandSolvency)•Costmanagementreviewwiththeobjectivetoreducethecostofdoingbusiness•Internalrecruitmentonlytocurtailemployeecosts.•Ensureefficiencyandeffectivenessatalllevelsofoperation•IndependentreviewofAutopaxfinancialposition(Within3months)• Increase no of buses as per technical recovery plan and overall business requirements(schedulledservices,crossborder,metrorailandcharter)•ConductcontinuouspricenegotiationswithcurrentandpotentialSuppliers/Serviceproviders,

Low


Risk of loss of revenue andanincreaseinnetlosses(LiquidityandSolvency)

HighRisk Materialised •Strengthenbudgetmanagementandcontrols(Dailyandweeklymonitoringofcostandrevenue)•Dailyreviewofrevenueforbothfarerevenueandticketsales,•CostManagement:Eliminationoffruitlessandwastefulexpenditure,CompliancewithIndustrynormsandBCEArequirements•Prioritiserevenueleakageandpreventionprogramme•Optimisationofstaffdeployment,AllrecruitmentofnewemployeesisapprovedbyExecutive:HCMandCEO•Effectiverosteringandschedulingofstaff•Reportandreviewperformancedaily,weekly,monthlyandquarterly•BudgetedEBIDTAlossofR15mforthe2018-2019financialyearwithsavingtargetssettoreducecostbyR15minordertoachievebreakeven•Developcapitalisationstrategy•Reviewedandwillimplementthenewfarepricingstructure•Continuousassessmentofrouteprofitability•Analysisofserviceutilisation•Strengtheningfinancialcontrolsandadherencetodelegationofauthority•ConductcontinuouspricenegotiationswithcurrentandpotentialSuppliers/Serviceproviders,•Strictadherencetothebusmaintenanceregime•Finalisingandimplementingperformancecontracts•Boardhasapprovedturnaroundplan/strategythatwillstabilisethebusinessandenableittoachieveitsperformancetargets•EmployeesaremadeawareofStandardOperatingProcedures.•Capacitateandrightsizethebusiness•MaintainandmonitorDynamicpricing

Low



LossofMarketshare HighRisk

Materialised •Busrecoveryplanforexistingdemand• Identify areas that will give the entity a competitive edge(pricing, look and feel of buses,cleanliness,ontimedepartures,on-boardentertainment)•Eliminationofnegativecustomerperceptionse.g..breakdowns• Reposition brand management to create customer loyalty and trust through marketingcampaigns•Improverelationshipswiththirdpartyagentsuncompetitivebehaviours•Newreservationsysteminstalled•Rolloutandconducttrainingonhandhelddevicestosellticketsen-route•Consequencemanagement•Implementmarketingactivitiesasperapprovedbudget•Assessgrowthopportunitiesforbothlocalandcrossborderoperations•Routeprofitabilityanalysisconductedtounderstandsupplyanddemand• Reposition brand management to create customer loyalty and trust through marketingcampaigns• Improve quality of service (On time departures, Cleanliness of buses, roadworthy buses,reductioninbreakdowns,compliancewithlawsandregulations)•Trainingofallstaffincustomerservice•ImplementZambiacrossborderrouteandapplyfor4additionalcrossborderroutes

Low

4. Effective and EfficientOperations

Inability to respond toindustry norms, standardsandtrends

HighRisk Materialised •Busrecoveryplanforexistingdemand• Identificationofall industrynormsandstandardsand implement inpriorityorder (Technical,OperationsandSales)•EngageOEM'stoensurecompliancewithbestpracticemaintenancenormsandstandardsinthetechnicalenvironment•Performancemanagementtoensureadherencetothesestandards•Upskillingofstaffandgraduallyimplementworksstudyactivitiesinorderofpriority•Securefundingandimplementcapitalizationstrategy

Low

5. EffectiveandEfficientOperations

Business disruptions due tooperational incidents andexternalfactors

HighRisk Materialised •Monitoringofdriverbehaviourtopreventaccidents•Trainingofadditionalstaffonsubstanceabusemonitoring•Engageauthoritiesandtaxistructurestopreventtaxiintimidation•Businesscontinuityplaningandimplementionwithinternalandexternalstakeholders•Ensureafunctionalsecurityteamtopreventlossofequipmentandassetsoftheorganisation•ImplementationofthetrainingandApprenticeshipprogramme.•Implementationoffleetmaintenanceprogramme

Low


Inability to manage keyresources, including fleet,fuelandinventory

HighRisk Materialised • Recruitment and selection for Acquisitions Manager, Materials Manager and Storeman areapprovedandwillbeimplemented,•Implementationofinternalandexternaltrainingaspertrainingplan•Executionofimprovementsandextensionofinfrastructureasperprojectplan•Implementconsequencemanagementforinadequatedriverbehaviour,deviationfromroutes,vehicleabuse(excessiveidling,harshbrakingetc)

Low


•ImplementationofofSAPPlantMaintenancesystem


LackofICTAutomation HighRisk Materialised •Re-allocatecapexprojectsfromPRASAtoAutopaxforcorebusinesssystems•ReviewthestructureoftheReviewBoardtobereflectiveofallstakeholders•Businessinvolvementthroughoutarchitecturedevelopmentlifecycle,AssessICTServicedeliveryModel, Review ICT organisational structure and operatingmodel, Re-establish ICT governancecommittee that will develop, review and ensure implementation of Value IT, COBIT, Projectmanagementmethodology•ReviewandupdateExistingtargetarchitecture

Low


CyberCrime HighRisk Materialised • Conduct Information Security Assessment – Vulnerability assessment (Mimic attacks on ourinformationsecuritydefence)• Encourage the use of the fraud hotline to report fraud and any other behaviours that aredetrimentaltotheorganisation•DevelopandimplementInformationSecurityProgram•ImplementInformationSecurityAwarenessPlan(ThreadsAwarenessroadshows)•ReviewICTorganisationalstructure


None compliance tolegislations, regulations andpolicies

HighRisk Materialised •DevelopacomplianceframeworkandregisterofalllegislationapplicabletoAutopax•Communicatingandconductingtrainingandawarenessonstaffofpolicies,regulationsandlawsapplicabletoAutopax•Reduceirregular,fruitless,wastefulexpenditureandimplementconsequencemanagement•Implementationofrecommendations/remedialactionbasedonfindingsraisedandperformancemanagement•Implementationofbudgetedtrainingplansandconductinginternaltrainingofstaffonpoliciesandprocedures•Implementationofconsequencemanagement


Labourunrest HighRisk Materialised •Regularandscheduledmeetingswithlabour•Communicatepoliciesandprocedurestoallstaff•Scheduledmeetingsbetweenmanagementandlabouratoperationalandbusinesslevel.

11. Excellent CustomerService

Inability to respond tocustomerdemands

HighRisk Materialised • Implement bus recovery plan for existing demand and release of 260 busses to operate allscheduledservices•Monitorandreportingonusageandcompliancetothereservationsystem,•Commissionedmarketstudytodeterminecustomerneedsandmarketshare•To improve customer communication, capacitate the call centre to sendSMS's to customerswhenthereareservicedelays•Effectivecommunicationwithcustomers,improvingonthelookandfeelofthebuses,trainingofstaffincustomerservice• Implementation of budgeted training plans, conduct internal training of staff on policies,procedures


• Improve quality of service (On time departures, Cleanliness of buses, roadworthy buses,compliancewithlawsandregulations)•Insourcedbuscleaningfunctiontocontrolstandardsandtooperatecleanandfumigatedbusses.

12. PerformanceExcellence

Ineffective performancemanagementsystem

HighRisk Materialised •Implementperformancecontractingfor2018/2019financialyear•Conductbi-annualperformancereviewsandimplementconsequencemanagement• Implementation of budgeted training plans, conduct internal training of staff on policies,proceduresandimplementationofinductionprogrammes•Reviewonperformancemonthly,quarterlyandimplementconsequencemanagement

13. FinancialManagement, ViabilityandSustainability

Ineffective institutionalarrangement andshareholderrelations

HighRisk Materialised •ConveneandAGMtoreviewinstitutionalarrangementswiththeshareholder•Adherencetoshareholdercompactandensurethatprescribedmeetingstakeplacetodealwithstrategic,financial,governanceandoperationalissues•BuildinternalcapacityandestablishICTandInternalauditfunctionforAutopax

14. Effective and EfficientOperations

Ineffective internal controlsystem and consequencemanagement

HighRisk Materialised •Communicatingandconducting trainingandawarenesson staffofpolicies, regulations, lawsapplicabletoAutopaxandcapacitatemanagementontheimplementationofdiscipline•AnumberofHCMpolicieshavebeenapproved•Performancemanagement•Trainingofstaffongeneralmanagement,processesandprocedures•Reviewofperformancecontractsbi-annually•Takingappropriateactionsondeviations•Adherencetobudgets•Balancingofcosttorevenueratio• Review the handling disciplinary caseswith regard to (Appropriateness of charges, fairness,balancemisconducttosanctions)

15. Excellent CustomerService

Riskofreputationaldamage HighRisk Materialised • Improve quality of service (On time departures, Cleanliness of buses, roadworthy buses,compliancewithlawsandregulations)•Insourcedbuscleaningfunctiontocontrolstandardsandtooperatecleanandfumigatedbusses.•Communicatingandconducting trainingandawarenesson staffofpolicies, regulations, lawsapplicabletoAutopaxandDrivertrainingoncustomerservice•Improvingandadheringtomaintenanceplansandconsequencemanagementfordeviations•Timeousresponsetocustomercomplaintswithqualityfeedbackandconsequencemanagementfordeviations•Clearidentificationofareasthatcanleadtoreputationalriski.e.Perceivedcorruption,fulfilmentof legislative mandate, implementation of legislative mandate, compliance to governance,meetingoftargetsandobjectives,financialprudence,fulfilmentofothergovernmentimperativesandpoliciesi.e.womenempowermentandBlackeconomicempowerment


15. BUDGETASSUMPTIONS2019-2020

AUTOPAXBUDGETASSUMPTIONS2019-20

GENERALASSUMPTIONS- 415operationalbuses- 51811687kilometreswillbeoperatedforallrevenuestreams(scheduledservices,duplicates,charters,inter-company)- Withtheholdingentity’sassistance190buseswillberefurbishedbefore1April2019(R63750000)- Withtheholdingentity’sassistance198engineswillberepaired/replacedbefore1April2019(R69539452)

REVENUEFAREREVENUEBudgetedatR761480558.Peak&OffpeakdaysAlldaysinschoolholiday=Peak(Startingonedaybeforetheschoolholidayandendingonedayaftertheschoolholiday) Alldaysnotinschoolholiday=OffpeakFarePriceBasisoffarepricebasedonmostcurrentprices.Assumedapriceincreaseof5%(acrosstheboard)on1April2018.ThisistheprojectedCPIincreasefor2019/20.Peakperiods=increasedwith20%PeakperiodinDec/Jan=increasedwith25%SeatOccupancy


Translux=offpeak(75%),ForwardPeak(90%)ReturnPeak(90%)Citytocity=offpeak(75%),ForwardPeak(90%)ReturnPeak(90%)Revenueperroute=Pricex%utilisationxseatsx90%(InlandandCoastal)=Pricex%utilisationxseatsx90%(NorthLimpopo)(90%representspassengersnottravellingfromstarttofinishatthemaximumfareaswellaselderly,studentsandschoolchildrennotpayingfullprice)Passengers/Seatsperroute=%utilisationxseats FAREREVENUE(CONTINUED):Variablesusedincalculatingthefarerevenuebudgetarethefollowing:-Currentroutestructureincludingexpectedroutestobeoperatedinfuture-Numberofnormalandduplicatetripsperroute-Numberofpeakduplicatetripsperroute-Seatoccupancy%perroute(innormalseasonandpeakseason)-Basefarepricesinoffpeakseason-20%farepriceincrease(onbaseprices)inpeakseasonCalculatedrevenueisadjustedforseniorcitizensandsmallchildrennotpayingfullfarepriceaswellasforpassengersnottravellingthemaximumdistance(Budgetedrevenue=90%xcalculatedrevenue).Basedontheabovethepassengernumbersandtripsarethencalculated.Aftercalculationofthepassengernumbersandtrips,thefarerevenueamountiscalculated.FAREREVENUE–CROSSBORDER

- Zambiacrossborder.Three(3)forwardtripsandthree(3)returntripsperweekincluded.- Maputocrossborder.Dailytripincluded.

FAREREVENUE-LUGGAGE


- BudgetedatR3millionfortheyear.AdditionalluggagerevenueexpectedfromtheZambiacrossborderservices.

SUNDRYINCOME

- R10millionisincludedforadvertisingrevenue.Busexterior/interioradvertisingspacetobeutilized.

FAREREVENUE–CHARTER/SPECIALHIRERevenuewasbudgetedasfollows:

- Assumed41buseswillbeused- Assumedeachbuswilltravel75494kilometresperannum(6291permonth),3095238km’sfortheyearfor41buses- BasedontheactualrateofR21perkm- R21x3095238km=R65000000

Autopaxcurrentlydoesnothavededicatedbusestooperatespecialhires.ThebudgetedcharterrevenueissubjecttoPrasa’sassistanceinrepairing198busengines(R69.5m)andrefurbishing190buses(R63.8m).FAREREVENUE–INTER-COMPANY

- BudgetedatR81879660manditconsistofMetrorailandShosholozaMeyl.- Operatingthesamenumberofvehiclesasduring2014/15- Assumed3611807kilometresfortheyear

FAREREVENUE–INTER-COMPANY(CONTINUED)Autopaxcurrentlydoesnothavededicatedbusestooperatetheseservices.Thebudgetedinter-companyfarerevenueissubjecttoPrasa’sassistanceinrepairing198busengines(R69.5m)andrefurbishing190buses(R63.8m).

EXPENDITURE


PERSONNEL:- Salaryincreasesof5.1%forExecutivesandSeniorManagementand5.3%forManagers- Salaryincreaseof8%forJnrofficials(aspermaincollectiveagreement)- Budgetedforcriticalvacancies(includes1HCMand1TechnicalExecutive)- Thefollowingemployeenumberswerebudgetedfor:

EmployeeLevelNumberof

employeesActualNumberofemployeesBudgeted

ExecManagement 3 5

SnrManagement 11 11

Manager 30 32

Asst.Management 7 7

JnrOfficial5Day 97 100

JnrOfficial6Day 928 986

GrandTotal 1076 1141

- Directors:

o BudgetedatR1673335.Thisincludesfour(4)directorsanda5.1%increasebasedonthecurrentexpense.

- Mealallowancefordrivers(GL439011):o Budgetedasperrouterequirements.BudgetedatarateofR60perdriverperdaymultipliedbythenumberofdriversonthetripaswellasthe

tripspermonthforeachrouterequiringmealallowances.AtotalannualamountofR5105580wasincludedinthebudget.

- Training:o Onlycriticaltrainingisbudgetedforasfollow:

PlannedIntervention Cost

ArtisanTraining R30000

AdvanceCoachDriverTraining R250000

EmployeeBursaries R200000


Total R480000

MAINTENANCEMaintenanceandmaterialsarebudgetedatR88503204.

Thebudgetisbasedontheactualcosttomaintain415busesexpectedtorunatotalof+/-52mkilometresayearincludingnewcross-borderroutesasbudgetedandagreedbetweenoperationsandsalesandmarketingdepartments.

- PreventiveMaintenanceo BusServicingSchedule(22500KmMulti-grade,e.g.

§ Aservice:22500km§ Bservice:45000km(includesdiffservice)§ Cservice:67500km§ Dservice:90000km(includesair-compressoranddiffservices)

o Abacklogof+/-60000kilometresoverdueontheofficialserviceschedule.CatchupisincludedintheAprilandMay2019/20servicesplan.o COFpreparation(maintenancematerials)–ifvehiclesaremaintainedtherewillbenoneedtopreparethevehiclebeforeitgoesforCOF.o COFtesting(testingfee)

§ ThetestingfeeinthecurrentfinancialyearisR1530x2=R3160perannumforalldepots.§ CT=R410forevery6months;§ PTA=R650forevery6months;and

§ HRM=R470forevery6months

§ Thesepricesarenotexpectedtoincreaseastherearecurrentcontractsinplace.

o Breakdowns

§ Allbreakdownswithinthe200kmradiuswillbeattendedtobyAutopaxusingthemonthlyrunningrepairmaterialdemandfromthe

stockinthestores.

§ Allbreakdownsmorethanthe200kmradiuswillbedonebytheexternalbreakdownsuppliers.


§ 2mechanicswillbepermanentlyplacedintheeasternCape.

§ 1mechanicwillbepermanentlyplacedinDurban.

§ 1mechanicwillbepermanentlyplacedinPolokwane.

§ 1mechanicwillbepermanentlyplacedinNelspruit.

o MaintenanceCampaigns(mitigatingbreakdowns)

§ Airblockage“AirLeaks”(leadingtovehiclenotbuildingair)thatrequiresrefurbishmentoftheairsystem(twocoils,twostraight,u-

shapeandaflexpipe,4-wayprotectionvalve,completeairdryer,aircompressorkit)

MAINTENANCE(CONTINUED)§ EngineOverheating(leadingtoengineknocks)andV-belts.

Thermostats,viscosfan(replacementorresetting),jockeypulleybearingsandv-belts.§ Notselectinggears;duetoelectricalfaultsandoverheatingtransmissionoil.Theoverheatingtransmissionoilwasduetoinferiorquality

oil used and not replacing the oil at recommended intervals. This is addressed by ensuring the correct oil grade is used on thetransmissionsandtheoilchangetobedoneatrecommendedintervals.

§ EstimatedcosttobespentperannumisaroundR4m.§ Thefirstpriorityarebuseswhicharerepeatoffendersintermsoftheabove-mentionedbreakdowns.

- ComponentsChangeoutsandoverhaulso MajorComponentsChangeouts/Overhaul(Engine,Gearboxes,Differentials)

o Inthecurrentfinancial2018/19

§ 25enginesarebeingreplacedatR335Keach

§ DifferentialandgearboxesareestimatedatR5.123m

§ In2019/20thereisanapprovedbudgetofR69m

o MinorComponentschangeouts/overhaul

Thiswillgoaccordingtoamaintenanceplanof6monthcheckandchange.- Air-conditioningMaintenance

o In2018/19,AutopaxspentanestimatedcostofR4.2m.ThisamountisexpectedtoincreasesinceAutopaxisexpectingtoreleasemorebuses

tomaximumcapacityasperoperationaldemand.

- TyreMaintenanceandManagement


o Thebudgetedmileageforthenextfinancialyearbasedonoperation’splanningis+/-52mKm,resultingtoanaverageof4.3mkmpermonth.

Inthecurrentfinancialyeartherewasnocontractinplace(onlyaminicontractofR500Kperdepot).o CPKwasusedin2019/20;thebudgetednewproposedmethodwillbeoutrightbuying.Theserviceproviderwillalsoperformafulltyre

managementservice.- BodyShopmaintenance

o Buswindowsreplacemento Duringthecurrentfinancialyear,windowreplacementsareestimatedaroundR8.5m.

o In2019/20itisexpectedthatthecostwillincreaseastherunningfleetisalsoexpectedtoincreasefrom+/-190to415vehicles.

MAINTENANCE(CONTINUED)- BodyRefurbishmentprogramme

o Basedondents,scratches,minorandmajoraccidentbusses.o Withtheshareholder'sassistance190buseswillberefurbishedatR63.8mbefore1April2019.

- WorkshopEquipmentmaintenance

o Mainair-compressors(Servicing&Runningrepair),1inSalvokopand1inHarmony.o AspertheOEMmaintenanceplanthesecompressorsshouldbeservicedat2500hoursoronceayear.Oneminor(R9000)andonemajor(R

25000).

o CapeTownneedsanewinstallation:estimatedcostisR500Ksubjecttofullassessment.

o BrakeTestingMachines(Calibrations&Runningrepairs),1inCapeTown,1inHarmonyand1inSalvokop.

o Asperlegislationrequirements,thebraketestingmachinesshouldbecalibratedevery6monthsatR16500.

o Stand-bygenerators(Servicing&runningrepair),2inHarmonyand1inPretoria.

o CapeTownneedsanewinstallation:estimatedcostisR800Ksubjecttofullassessment.

AspertheOEMmaintenanceplanthegeneratorsshouldbeservicedat600hoursoronceayear.o Oil-waterseparatorplantmaintenance(Removalofsludge)

AspertheEnvironmentalregulationthereisaneedtohaveandmaintainanoil-waterseparatorplant.Tocomplywiththerequirement,thesludgeremovalwillbedonequarterlyatR9000perdepotdependingquantitiesandworktobedone.

o Workshopliftingequipment(testing&repair)


Asperlegislationrequirementforliftingequipment,theworkshopliftingequipmentmustbetestedevery12monthswithinspectionsevery3monthsatR7000.

ENERGY/DIESEL- Dieselwascalculatedbasedontheestimatedwholesalelistprice(WSLP)ofR14.43fromApril2019toR16.20inMarch2020.AbasepriceofR13.13

(WSLPinJan2019)wasusedandincreased/decreasedbasedontheoilpriceforecastfortheperiod.ThefollowinganticipateddiscountsonhomebasefuelweresubtractedfromtheWSLP:

o HarmonyDepot-51centsdiscounto Salvokop-51centsdiscounto CapeTown-50centsdiscounto Queenstown-30centsdiscounto PortElisabeth-38centsdiscount

- Consumptionwasbasedon37litresper100kmforallvehicles,therefore0.37litresperkm.

- Dieselcalculation:

o DieselwascalculatedusingtheWSLPlesstheabovementioneddiscounts.o TheWSLPwasmultipliedbyconsumption(0.37)andtotalkm’sforeachbudgetedrouteandmultipliedbythenumberofbudgetedtripsper

month.o Formula=WSLPx0.37xkm’sfortripxnumberoftripsbudgetedpermonth.

- Itwasassumedthatthebuswillfillupatthedepartdepotassoonasitleaves(assumingthatitarrivedwithanemptyfueltank).

- ForMetrorail,Shosholoza,thePrasastaffbusandchartersthemonthlyaverageofthebudgetedkm’swereusedforthecalculation.- DieselwasbudgetedatR261670389fortheyear.LEASES- Wherecontractscouldbeobtained,thecontractualamountforthebudgetyearwasincluded.- Wherenocontractscouldbeobtained,thebudgetamountwasbasedontheactualleaseexpensesforthepastyear.


- Poolcarsarebudgetedforatthecurrentcontractamountfortheexternalleasedcars.MonthlyleasecostforpoolcarsreceivedfromPrasawasnotbudgetedfor.

- AllleaseswerebudgetedatR20999191fortheyear.- Inter-companyrent(R9.4m),Jhbparkstationbusentry(R15.5m)andMANbusleasecost(R6.9m)wasnotbudgetedfor.Inter-companywater,

electricityandrateswerebudgetedfor(R3m).

COMMUNICATION- Telecommunicationservices(GL473000)–BasedonactualcostsplusCPIincrease–annualamountofR1290864budgeted.- Cellularphonecosts(GL473030)–BasedonthecurrentVodacomcontractcosts–annualamountofR1120653budgeted.- Alarmsystems(GL473040)–BasedonactualalarmcostpayableperSalesoffice/Depot–annualamountofR289907budgeted.

INSURANCE- InsurancePremium(GL465030)-BasedonactualcostsplusCPIincrease–annualamountofR8149742budgeted- 3rdPartyinsuranceclaims(GL465025)–Nobudgetincludedasbusinesscannotbudgetforanticipatedaccidents.

AUDITFEES- Externalauditfees–AnticipatedAuditorGeneralFees,basedoncurrentyearactualwithaCPIincrease–annualamountofR2157791budgeted.

PROFESSIONALSERVICES- Professionalserviceconsultants(GL473200)–thefollowingwasincluded:

o Boardsupportandsalarybandsbenchmarking&jobprofiling–annualamountofR850000budgeted.- Pensionadministrativecosts(GL473230)–thefollowingwasincluded:

o Momentum-Pensionadministrativecosts–annualamountofR67138budgeted.

SECURITY- Generalsecurityservices(GL477200)–basedonactualsplusCPIincrease–annualamountofR7084067budgeted.- Cashintransit(GL477205)–basedonactualsasperStandardBankcontract–annualamountofR4697812budgeted.- Inspectorate(GL477210)–Nobudgetincludedasinspectionsaredonein-house.

HEALTHANDRISK


- ConsistofHealth&Sanitationcost,Medicalexaminationcost,cleaningofstationsandoffices,Fireextinguishingservice,AccidentAssistanceandFirst

aidkits:- HealthandSanitation(GL466000)–includesbusanddepotfumigationandsanitationservicesforheadoffice–annualamountofR1017360

budgeted.

HEALTHANDRISK(CONTINUED)- Medicalexaminationcost(GL466005)–Budgetedat400employeesperannumatR2000peremployee–annualamountofR800000budgeted.- Cleaningofoffices(GL466010)–Basedonpreviousyear’sbudgetplusCPIincreaseplusR2000forgardencleaningforheadofficeonly–annual

amountofR360000budgeted.- Fireextinguishingservices(GL466015)–asreceivedfrombusinessunits–annualamountofR437160budgeted.- AccidentAssistance(GL466020)–BasedonthecurrentcontractwithEuropeAssist–annualamountofR168000budgeted.- Firstaidkits(GL466040)–asreceivedfrombusinessunits–annualamountofR27500budgeted.

TRAVELANDACCOMMODATION(MANAGEMENT)- ConsistsofAccommodationandmeals,Carhireandflights–basedonexpectedtravelactivities:

o Accommodation&meals:AmountsbasedonNationalTreasuryInstruction04of2017/2018):MaximumofR1440pernightperperson.Thisrateincludebreakfast,lunch,dinnerandparking–annualamountofR891840budgeted.

o Carhire:asreceivedfrombusinessunits–annualamountofR53010budgeted.o Flights:Amountsbasedonflightratesasat15Jan2019–annualamountofR890700budgeted.

TRAVELANDACCOMMODATION(DRIVERS)- Budgetedasperrouterequirements.Budgetedondifferentratesperdriverpernightmultipliedbythenumberofdriversonthetripaswellasthetrips

permonthforeachrouterequiringovernightaccommodation.AtotalannualamountofR16520526wasincludedinthebudget.OFFICEEXPENDITURE- Consistofpostalservices,stationeryandofficesuppliesandplant&gardenmaintenance.Budgetbasedonactualrequirementsasreceivedfrom

businessunitsplusCPIincrease–annualamountofR576048budgeted.


COMMISSIONPAID(GL479200)- %ofFarerevenue(GL800100).Basedonactualcommissionpercentagesofthepastyear–annualamountofR25317106budgeted.PUBLICATIONSANDMARKETING

- Advertisingandpublicity(GL477005):

o Marketing§ Retainexistingcustomerbase(promotereturnticket;onlinesales)–annualamountofR1000000budgeted.

- Booksandsubscription(GL477010)o Risk

§ ISOcompliance,CompanyregistrationandreturnsandConvertingfromISO9001:2008toISO9001:2015–annualamountofR133000budgeted.

§ Companyregistration:Annualreturns–annualamountofR5000budgeted.

- Filmsandvideos(GL477020)o Marketing

§ Onboardentertainment–annualamountofR1500000budgeted.

- Branding(GL477050)o Marketing

§ Officebrandrefreshing–annualamountofR500000budgeted.

COMPUTEREXPENSESConsistofdatanetwork(GL473015),computermaintenance(GL451023),computerconsumables(GL472030)andsoftwarelicensefees(GL473400):

- Datanetwork(GL473015):o VodacomPushtotalkfordrivers,MTNdatacards,VodacomcellphonecontractandBustracking–annualamountofR2637546budgeted.o TelkomDatalines–annualamountofR475050budgeted.


- Computermaintenance(GL451023)o BudgetedformaintenanceofprintersunderSCM–annualamountofR214248budgeted.

- Softwarelicensefees(GL473400):o Annualsoftwaremaintenance–annualamountofR489027budgeted.

- Computerconsumables(GL472030):o Computer&Printingconsumables-Printercartridges–annualamountofR1012964budgeted.

OTHEROPERATINGCOSTS

- Wash&parking:

o BudgetedatR456564fortheyearanditcoversenddestinationbuswashingonly.

- Tollfees:o Budgetedasperrouterequirements.BudgetbasedonthespecificrateforeachtollPlazaontheroutemultipliedbythenumberoftripsper

monthforeachroute.2019/20ratesarebasedon2018/19ratesincreasedwithCPIof5.3%-annualamountofR26556408budgeted.

- E-tollfees:o Budgetedasperrouterequirements.Budgetbasedonthestandardtariffforeache-tollPlazaontheroutemultipliedbythenumberoftripsper

monthforeachroute.2019/20ratesarebased2018/19ratesincreasedwithCPIof5.3%-annualamountofR4853857budgeted.

- Vehicle/trafficfinesarenotbudgetedfor.

FINANCEINCOME

- GL804000(Interestreceived–bank)-UtiliseaveragesforApril2018toNov2018(withnoincrease).AnnualamountofR971028budgeted.

FINANCECOST

- GL482010(Interestpaid-Creditors)-UtiliseaveragesforApril2018toNov2018(withnoincrease).AnnualamountofR3439908budgeted.- GL482011(Storagefees)-UtiliseaveragesforApril2018toNov2018(withnoincrease).AnnualamountofR7668budgeted.

DEPRECIATION


- Basedonexpectedfuturedepreciationforcurrentassets(SAPsystemcalculated)–annualamountofR23685425budgeted.- DepreciationratesusedasperAnnualFinancialStatement’saccountingpolicy.- Doesnotincludeanycapitaladditions.

CAPITALREQUIREMENTS

- Autopaxisnotbudgetingforanycapitalitems.

ALLOTHEREXPENSES

- ACPIincreaseof5.3%wasaddedtothecurrentforecastof2019/20.

DATEDIN_________________________onthis________DAYof__________________2019.

SIGNED

______________________

(ChiefExecutiveOfficer:Autopax)

DATEDIN_________________________onthis________DAYof______________2019.

SIGNED

_________________________

(Chairman:AutopaxBoard)

Autopax Passenger Services (SOC) Business Plan 2019/2020pmg-assets.s3-website-eu-west-1.amazonaws.com/Autopax... · 2019-07-18 · Business Plan 2019/2020 Page 0 of 43 Autopax Passenger

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