Regulator set to assess port tariff comments

Yesterday (October 16) was the deadline for comment on Transnet National Ports Authority’s annual tariff application. TNPA has called on the Port Regulator of South Africa for a 9.47% increase for 2015/16 – a figure industry says is unreasonably high. Various organisations – including the National Port Consultative Committee (NPCC), the regional port forums, the South African Association of Freight Forwarders (Saaff) and the Cape Chamber of Commerce and Industry – were expected to lodge appeals with the Regulator. “The expectation is that various shipping lines and businesses will also add their voices – appealing to the Port Regulator to consider the application very closely,” said Mike Walwyn, chairman of the Cape’s Port Liaison Forum. “The general feeling in the industry at present is that this tariff increase request is unreasonably high.” Experts maintain that the volume projection on which TNPA has based its increase is questionable at the very least. Walwyn agreed saying there were also concerns about the intended capex spend and the direct link to the requested increase. “Essentially they are saying we want to improve our business and we want to buy some items to do that, but customers must pay for it. There is very little justification for this increase.” TNPA has for the first time requested an increase over a period of three years asking for 9.47% for the next year, 15.91% for 2016/17 and 6.49% for 2017/18. “The reason the figure spikes during 2016/17 is due to the intended capex roll-out programme of Transnet’s market demand strategy during that time,” explained Walwyn. In its application TNPA states that the nature of its Capex programme roll-out will result in spikes and troughs for future tariff adjustments. Industry role-players however maintain this is nothing but a user-pay system being implemented in which they have no say over what they are paying for. “So TNPA wants to purchase and upgrade but we have to pay for it,” one port user told FTW. “You cannot use an administered price to make your company more profitable. It is not accepted business practice.” Walwyn said a national roadshow hosted by the Port Regulator on the tariff increase had seen a low turn-out from industry but this was not an indication of responses. “I think most realise the only way to really respond to it is by putting concerns and subsequent justifications as to why this tariff increase must be denied on paper and sending it to the Regulator. We expect quite a number of these responses and are hopeful the new Regulator will take careful consideration of our comments in his decision process.”