Competition Commission probes terminal handling charges

The Competition
Commission has initiated
an investigation against
Transnet for excessive
pricing.
This to ascertain, said a
CC statement, whether this
pricing is “in contravention
of section 8(a) of the
Competition Act, and
exclusionary practices in
contravention of section
8(c) of the Competition
Act, in the provision of
port services”.
It stemmed from
information before the
CC indicating that the SA
port charges were much
higher than the global
average, and that Transnet
was giving preferential
treatment to certain
customers to the exclusion
of others.
And, depending on the
complexity of the issues under
investigation, according to CC
spokesman Itumeleng Lesofe,
findings should be completed
within a year.
When we spoke to
Mahesh Fakir, CEO of the
SA Ports Regulator, he told
FTW that he had received
communications from the
CC on this issue, related to
relevant regulator’s reports.
“We have a memorandum
of understanding (MOU)
with them,” he added.
And Fakir noted that the
charges being probed by
the commission were those
levied by Transnet Port
Terminals (TPT), which
were not regulated by his
body, unlike those of the
Transnet National Ports
Authority (TNPA), which
were.
Indeed, the CC noted
that the areas of focus of
the investigation would be
terminal handling charges
(THCs) for containers
and those relating to
automotive exports.
And, looking at the
regulator’s 2015 Port Tariff
Benchmarking Study, there
are details of comparative
prices between SA THCs
and those of a selected
global sample average.
The report found that,
if THCs were taken into
account, total port costs
(including terminal
handling charges for
container owners) went
down from 360% above
the global sample average
in 2012/13 to 213% in
2013/14, 190% last year and
116% in the current year.
But, it added, “these
remain significant
(more than double)
and the potential
cross-subsidisation
between ‘manufactured
goods’ (containers and
automotives) and ‘bulk
commodity exports’
remains evident in these
results, as confirmed by
the results from the tariff
strategy”.
CAPTION
The Port of Durban ... charges are higher than the global
average.