Port tariff hikes get the thumbs down

There was little joy this week as the Ports Regulator of South Africa approved a tariff increase of 8.15% for the Transnet National Ports Authority (TNPA) following their initial request of 14.39%. The increase was announced over the weekend by the Ports Regulator on its website. “After considering all relevant information and the submissions by all stakeholders during the consultation period, the Regulator has declined the proposed average 14.39% tariff increase for TNPA,” reads the notice. While cargo dues will only increase by 5.9%, an 8.15% increase will be implemented on dry bulk cargo dues for coal, iron ore and manganese as well as an 8.15% tariff increase on all marine services and related tariffs. Industry this week reacted with disdain saying it was much higher than was expected and in fact would impact negatively on the country. “South Africa has the most expensive ports in the world and this increase just continues to add. We have to play catch up and by increasing marine services by 8% we are definitely not achieving that,” said Mike Walwyn, chairman of the Cape Port Liaison Forum. “Also the 5.9% increase on container charges and the like is just too high. We were expecting something in the region of 4%.” Various industry role- players reacted yesterday saying the ports were seen as Transnet’s cash cow and there was no justification for the high increases. And it was far from over, with the Record of Decision (ROD) yet to be published. With industry not rejoicing over the increases announced last minute ahead of the March 31 deadline, the ROD could see further increases implemented. “We don’t know the details of the ROD and until we do we won’t know the exact impact of the increases. It could still be worse than what we think,” said Walwyn. At the time of going to print it was not known if the Regulator would release some of the funds from the Excessive Tariff Increase Margin Credit (ETIMC) that was established to smooth the shock of big tariff increases on industry. For industry a cargo dues increase of 5.9% remains excessively high especially when seen in light of a detailed study by the Port Regulator that cargo dues for containers in South Africa are already 847% higher than the global average. Also these tariff adjustments come with a 9.25% increase from Transnet Port Terminals that jumped the gun on the TNPA tariffs, announcing its increases last month.