Port users have expressed
disappointment at the
Ports Regulator of South
Africa’s (PRSA) decision
to approve a 5.97% overall
average increase in port
tariffs in 2017/18 with a
view to keeping hikes at 6%
or less for the next three
years.
PRSA CEO Mahesh
Fakir announced the record
of decision in Durban
last Thursday following
Transnet National Ports
Authority’s application for
an 8.02% hike in 2017/18
and for indicative increases
of 25.11% in 2018/19 and
9.54% in 2019/20.
TNPA had asked for a
13.25% increase on marine
charges for shipping lines;
8.30% on all bulk; and
5% on containers and
automotives for 2017/18
“The ports regulator
concluded all cargo dues
for 2017/18 are to increase
by 6%, except for marine
services and related tariffs
– sections 1-8 of the tariff
book, excluding section 7
that deals with cargo dues
– that are to increase by
7.9%. Full container dues
are to increase by 4.9% and
all ro-ro automotive tariffs
by 3.9%,” Fakir said.
“With regards to the
incentive for SA-f lagged
vessels announced in the
2016/17 record of decision,
all marine tariffs for
existing commercial SAf
lagged cargo vessels as
well as those registered in
SA in 2016/17 will continue
to receive a 30% discount
applicable year on year
until 31 March 2019,” he
said.
Vessels registered in
SA in 2017/18 would
receive a 20% discount
until 31 March 2019,
while those registered in
2018/19 would receive a
10% discount, after which
the discount would be
reviewed, Fakir added.
He said the regulator had
considered comments
from port users, cargo
volume forecasts, the
inf lation outlook, the
cost of debt, the NPA’s
operational requirements
and relative port pricing
benchmarking in
conducting its assessment.
He said average volume
growth was expected to be
2.97%, while the inf lation
outlook was 6.10% and
profit (return on equity)
allowed was R2.6 billion in
2017/18.
“The ports regulator is
confident that the record of
decision ref lects a balanced
and sustainable average
negative real tariff change
that will result in a 10%
year on year increase in
allowed revenue. The NPA
will be allowed to recover
R12.185 billion versus the
R12. 231 billion applied
for,” he said.
“Operational as well as
capital expenditure applied
for was allowed for fully,
ensuring sustainability and
further development of the
SA ports infrastructure
system,” he said. The
regulator had opted to
use R539 million of the
Excessive Tariff Increase
Margin Credit (ETIMC) to
maintain overall average
tariff hikes within the SA
Reserve Bank’s inf lation
target band of 6% and the
average indicative tariff for
2018/19 and 2019/20 was
6% or less, he added.
“The regulator is
committed to reducing
the cost of doing business
within the SA Ports system,”
Fakir said.
South African Association
of Ships Operators and
Agents (saasoa) CEO,
Peter Besnard, said SA
ports remained expensive
considering service levels.
“It will be contested by
the industry because we are
in very tough times. Some
ports have reduced their
costs but we have gone up
although not as much as
anticipated,” he said.
“There has to be
improvement in service
levels and the general
running of all ports.
Emphasis on the dig out
port seems to have gone
away but you can’t neglect
the structures you have
got that are generating
revenue,” he said.
Citrus Growers'
Association logistics
development manager,
Mitchell Brooke, said he
was “a bit disappointed” in
the container tariff hike.
“We expected a zero
percent increase or even
sub zero from the viewpoint
that the tariff is still very
high. TNPA and TPT
charges combined represent
30% of our port cost which
is exceptionally high,” he
said.
SA Association of Freight
Forwarders’ maritime
consultant Dave Watts said
the regulator had done an
“exceptional job” over the
past eight years.
“I have no idea where
we would be from a tariff
perspective if it wasn’t
for the ports regulator. It
would have been a 30%
increase over three years
and we can’t afford that,”
Watts said.
TNPA CFO Mahommed
Abdool said it was too early to
pronounce on the implications
of the decision which the
authority needed to assess.
“A considerable amount
of thought has gone into the
request of 8.02%, taking
into account the economic
situation. However, our
application was made on
August 1 and we are now
talking about three months
later and more updated
factors had to be taken into
account by the regulator,”
he said.
