Shippers slate 'excessive' port charges

Alan Peat HOW DOES the National Port Authority (NPA) justify making a R2.5-billion annual operating profit from the new unitary "cargo dues" (formerly ad valorem wharfage charges) - and where does it go? Those challenging questions have just been posted in the SA Shippers Council (SASC) reaction to the newly-issued port tariffs from both NPA and the SA Ports Authority (Sapo). "From our calculations," said executive director Nolene Lossau, "and based on the proposed tariffs, the income for NPA will be just under R4-bn per annum. "After that we assessed their total operating costs - which cannot exceed R1.5-bn." This leaves a very pretty operating profit of about R2.5-bn in the first year, Lossau added, which - with certain variances - will still continue over the next couple of years. "We regard this as excessive," she said, "and would be delighted if the NPA would tell us just exactly what they'll spend it on." The new cargo dues - according to the port authorities and government at the launch of this replacement for wharfage - were to be "dedicated" to harbour maintenance, repair and development, and equipment replacement. But, said Lossau, and others with whom FTW discussed this issue, all these costs are projects/units which - at the most - run into the hundreds of millions. Nowhere near the thousands of millions profits that the NPA stands to reap. And, if part of the justification is to use it for developments such as the Coega's of this world - the new port development sited just north of Port Elizabeth harbour - then two other challenges are raised. First from a senior executive in the bulk shipping industry. "The word "development" as far as wharfage is concerned has to refer to minor developments/additions to existing port infrastructure," he said. "When you start talking about major capital developments like Coega, no businessman in his right mind would expect to finance it from their cash-flow. "You go out into the project finance market for funding and amortise your cost over twenty years or so." The second challenge was presented by Lossau. "It would be all very well for the port authorities to raise Coega," she said. "But ask yourself: It might be all right for the first year's profits, but where are you going to need one-and-a-half Coega's a year for the next three years." There's a very distinct call for the NPA to come clean on how it does its figures. "I do think we should ask them to be transparent as to how these numbers were arrived at," said Lossau.