Based on the engagements with the Ports Regulator’s office, it would appear that the overall Transnet National Ports Authority (TNPA) revenue requirement is at the appropriate level failing which the Ports Regulator would not have granted TNPA the level of revenue (through tariff adjustments) that they have up to now.
It is acknowledged that tariffs in SA ports are very high in certain categories but extremely low in others. TNPA is looking into these imbalances, which are mainly a legacy of the old “ad valorem” wharfage charge and are not based on infrastructure actually used, thereby contradicting the user-pays principle.
TNPA’s proposed pricing strategy is looking into balancing charges in different categories. In particular, cargo dues for containers and automotive (RoRo) are above average and a reduction is proposed. Tariffs for dry bulk, liquid bulk, and break bulk will conversely be raised.
Transnet was granted its request (by the Ports Regulator) in 2012/13 for a once-off tariff discount of R1 billion to the local manufacturing industry. The objective of such discount was to minimise the trade flow differential between imports and exports and to reduce the cost of doing business.
For the 2013/14 tariff determination, Transnet was again granted its request (by the Ports Regulator) to reduce cargo due tariffs for container full export by 43.2%, container full import by 14.3% and motor vehicles exported on own wheels by 21.1%.
In terms of the tariff application 2014/15 the TNPA is of the understanding that its proposed tariff methodology position remains under review by the Ports Regulator. Therefore, the Ports Regulator decided to issue an interim Regulatory Manual, applicable to the 2014/15 tariff year, to guide the TNPA in preparing its tariff application. TNPA’s application of this interim Regulatory Manual results in a tariff adjustment determination of 14.39%.
Whilst the Authority understands its role in facilitating economic growth by providing infrastructure and driving port efficiencies as part of the market demand strategy; it is also mindful of Transnet’s commitment to reducing the cost of doing business in South Africa.
TNPA has assessed its financial needs in relation to its MDS deliverables for 2014/15 and can sustain the organisation for the following year with less that 14.39% tariff adjustment. In keeping with the interim Regulatory Manual the TNPA has requested some release of the Port Regulator’s previous ETIMC provisions created. Therefore the TNPA has applied to the Ports Regulator for a revenue requirement which translates to an overall average tariff adjustment of 8.5% for FY 2014/15.
About Transnet National Ports Authority
Transnet National Ports Authority (TNPA) is one of five operating divisions of Transnet SOC Ltd. The national ports authority is responsible for the safe, effective and efficient economic functioning of the national port system, which it manages in a landlord capacity. It provides port infrastructure and marine services at the eight commercial seaports in South Africa - Richards Bay, Durban, Saldanha, Cape Town, Port Elizabeth, East London, Mossel Bay and Ngqura in the Eastern Cape. It operates within a legislative and regulatory environment created by the National Ports Act 2005 (Act No. 12 of 2005). For more information visit www.transnetnationalportsauthority.net.
Issued on behalf of:
Chief Financial Officer
Transnet National Ports Authority
By: Lesley van Duffelen
Transnet National Ports Authority
Tel: (031) 361 8527