In a significant decision aimed at easing financial burdens on customers in the face of challenging economic circumstances, the Ports Regulator of South Africa (PRSA) has rejected Transnet National Ports Authority's (TNPA) proposed 4.98% tariff hike, opting instead for a 0.00% increase for the 2024/25 financial year.
Johanna Mulaudzi, PRSA CEO, said the decision was made after much internal deliberation and consultation with the industry at large, considering the economic conditions locally and internationally.
"We have considered the diminished income of port users and their ability to trade through our ports with the focus on delivering sustainability, affordability and accessibility in the port sector.
"The Regulator has therefore concluded that an appropriate increase in the overall affected weighted average tariff for the financial year 2024/2025 is determined to be 0.00%."
Mulaudzi said this average included some differentiation, with marine services and related tariffs increasing by 2.98% while all container cargo dues would decrease by 3.00%.
Dry bulk cargo for coal and magnetite would increase by 3.00%, while all other dry bulk cargo would see an increase of 2.7%. RoRo cargo dues, liquid bulk cargo dues and all additional tariffs would decrease by 3.00%.
She said all marine tariffs for all commercial vessels registered and flagged in South Africa from 20219 would receive a 30% discount applicable year-on-year until further review by the Regulator.
According to Mulaudzi, the TNPA tariff increase application of 4.98% included an amount of R1 267 million retained in the Excessive Tariff Increase Margin Credit (ETIMC).
"The Regulator deems it necessary to remind the ports sector that the purpose of the ETIMC is not to subsidise inefficiencies or profits for the TNPA."
Mulaudzi acknowledged that the ports' operational efficiencies were declining, which was a concern for the regulator and port users.
"The Regulator has noted the deterioration of operational performance in the 2022/2023 financial year, with the weighted efficiency gains from operations (Wego) results recording a 14.19% decrease; a further decrease of 12.05% was recorded in the previous financial year performance."
The Regulator has approved TNPA's request to introduce a motor vehicle permit fee in the tariff book. "The funds for road infrastructure in the ports have been recovered through required avenues, and the TNPA will be allowed to continue to recover investments made through the tariff determination process."
Percy Manzini, the non-executive director of the PRSA board, told delegates that whilst the Regulator's tariff decision had been delayed this year, it had been given sufficient time for industry still to plan and implement the changes ahead of the new tariff implementation on April 1.
"In reaching this tariff decision, the Regulator has considered not only the local economic conditions, including high inflation and the energy challenges, but also the state of the global economy and shipping industry that geopolitical tensions and conflicts in the Middle East, Russia, Ukraine and attacks in the Red Sea have severely impacted."
