There is no way that a small proportion of SA business - the trading community -should be used to subsidise something which should be the responsibility of the general fiscus. Ð Cowell THE VALIDITY of the wharfage charges being made at SA ports has once again been questioned at a recent conference in Cape Town involving Portnet and representatives of the freight forwarding industry.
In an address by Alan Cowell, executive director of SAAFF (SA Association of Freight Forwarders), wharfage was described as a non-cost-related form of tax, where the higher ad valorem wharfage on imports (twice as much) also effectively subsidises exports.
A charge like wharfage can only be justified if it is used to maintain or replace the cargo handling infrastructure at ports, said Cowell. But a low-mass container of high-value goods having to pay considerably more than a higher mass box of low-value goods just does not fit this requirement - where the low-value goods may, in fact, have a greater detrimental effect on the infrastructure and require more handling capacity than the high-value. Similar logic can be applied to the fact that imports have to pay twice as much wharfage as exports - when costs related to in-or-out movement of goods are no different.
These are just not cost-related, said Cowell. And that's the real argument against wharfage. The second part of the argument against the charge is the fact that the large profit that Portnet makes from wharfage is not directed at maintenance, repair or replacement of cargo handling facilities.
It is basically used to fund the huge deficit in Transnet's pension fund, said Cowell. There is no way that a small proportion of SA business - the trading community - should be used to subsidise something which should be the responsibility of the general fiscus. While Portnet authorities at the conference made no direct comment on the issue, Cowell feels that note may have been taken of the case laid by the freight industry.
From what I know of Sipho Nyawo - new executive director of Portnet - he is a generally pragmatic man, said Cowell. He is bound to be aware of the importance and validity of our argument on the need for any charges to be cost-related - particularly at a time when all government charges are supposed to be transparent in their honesty. The Portnet reaction to this point of debate may soon be known.
A further meeting is due for later this year - September is being hinted at - when Portnet are due to express their feelings about the various points raised in the recent debate.
With luck, good judgement, and transparency being kept firmly in mind, the contrary wharfage issue might finally be put to rest.
