Erwin plans September concessioning meeting

Sapo looks set for partnership deal ALAN PEAT THE KEEN urge to privatise SA ports seems to have waned, with the “concessioning” of the container terminals - originally planned to kick-off in Durban in the middle of this year - having taken a backburner. The latest move - awaited with bated breath by aspirant terminal operators - now appears to be a September strategy meeting on concessioning planned by the Department of Public Enterprises under new minister Alec Erwin. However, there is still doubt in the private sector about just how clear a path will be mapped in this stakeholders’ get-together - and just how much influence will be put in the hands of the private port operators. The government attitude seems to have taken a swing from its previous stance - and a new model for the procedure seems to have taken the forefront in the government’s concessioning plans. As one un-named executive in the industry told FTW: “Downright 100% operational take-over by a private player is unlikely, substituted by public-private-partnership - where SA Port Operations (Sapo) will be an integrated part of operating the facility. “This supported by investments, training and process changes being committed by the private investor.” This motivation appears to fit the thinking of the labour unions - which have challenged the original concessioning plans since day one. According to Jane Barrett, policy officer for the SA Transport and Allied Workers Union (Satawu), port restructuring had to take place under the National Framework Agreement (NFA). The issue of SA Port Operations (Sapo) - where the first steps to privatisation are to be taken under the “concessioning” procedure - was dealt with by the ports restructuring committee. This comprised the three unions and the government departments of public enterprises (the lead department), transport and trade and industry. The end result, Barrett told FTW, was that the unions refused to accept anything else but a private/public concept. This now seems to be the way it will go, according to recent statements by Erwin. Would this work? “Alas,” said one authority, “it’s a half-half solution, where some improvement can take place - but heavily influenced by government.” Will the deals be attractive for private operators? Yes, FTW was told - as business cases are likely to be aligned to fit acceptable parameters for the private operators. “But,” one executive hedged, “it will likely not be a very attractive deal, and it could be abandoned by some players as they would rather use their resources on projects with a more positive financial outcome.” The result here, the feeling went, was that only the big players with other investments in SA would participate in the race. This immediately raises a very sensitive issue in connection with the SA port operation concessioning - the possibility of an alliance between port operators and shipping lines. While both the government and the World Bank have argued that such an alliance could create shipping line monopoly, this is not the case, according to the private sector. This, FTW was told, is not correct - as there are a number of variables that dictate whether a monopoly can be created. Indeed, the international situation shows that alliances between shipping lines and port operators is quite normal. The logic here is that it is felt that the co-operation you have in one specific port does not necessarily affect the co-operation you have in another. “In the end,” we were told, “it is the cargo owner that chooses who will be trusted with the cargo.”