‘Sapo is keeping down tariff increases’

Chetty spells out productivity challenges
RAY SMUTS
PORT TARIFFS are controversial at the best of times but South African Port Operations executive manager for strategy and continuous improvement, Mervin Chetty, maintains the country is actually reversing international trends of raising tariffs. Speaking at a Sapo business-to-business breakfast forum in Cape Town last week, Chetty said that an international shortage of port capacity had led some terminal operators to increase tariffs – what really amounts to a question of supply and demand. “In South Africa we are going the other way by actually reducing the cost of doing business so that we allow a lot more traffic coming in, thereby growing the economy. “We have seen a lot of significant investment going into the ports system, but despite that we have not seen any large tariff increases to offset those large investments.” Chetty said one of the issues facing South Africa was reducing the cost of doing business, which was a high priority for Sapo. “If you look at transport costs as a percentage of GDP (gross domestic product) the figure is around 14.6%, significantly higher than our peers in Europe. We therefore face quite a few challenges to overcome this trend over the next three years by reducing that percentage to about 11%.” Turning to major internal challenges facing Sapo, Chetty conceded that productivity was still a major concern. “We still face the issue of continued capacity constraints, particularly in the container, bulk and vehicle sectors, due to the obvious growth in traffic.” Sapo was saddled with skills shortages at both managerial and operational level but quite a few initiatives were in place to address this, he said. There was also the question of an ageing workforce - much the same situation in which Spoornet finds itself, with many locomotive drivers well into their 50s. The ports were also facing the challenges of increased vessel sizes and higher cargo volumes, he added.