'TNPA's proposed tariff increases prudent' - Ports Regulator

Transnet National Ports Authority (TNPA) has had the sense not to ask for too much. That was the initial reaction of the SA Ports Regulator to this year’s tariff application by the ports landlord, according to CEO Riad Khan. “It was reasonably prudent of them to act as a responsible corporate citizen,” he told FTW, “and achieve a balance with what they can realistically justify.” In its application, the TNPA noted that the application of the requested tariff levels on the projected volumes for financial year 2013/14 should result in the authority achieving the required marine business revenue. And its overall revenue requirement was calculated as R10.275 billion – comprising real estate revenue of R1.856 bn and marine business of R8.419 bn. Justifying its requirement, the TNPA said: “In terms of the Port Directives, when considering the proposed tariffs for the authority, the regulator must ensure that such tariffs allow the authority to: a) Recover its investment in owning, managing, controlling and administering ports and its investment in port services and facilities; b) Recover its costs in maintaining, operating, managing, controlling and administering ports and its costs in providing port services and facilities; and c) Make a profit commensurate with the risk of owning, managing, controlling and administering ports and of providing port services and facilities.” Its tariff application, the TNPA added, had been prepared using the revenue requirement methodology, and the application of this methodology resulted in a revenue requirement of R10.978 bn for the FY 2013/14. But this was adjusted downwards. Given the non-finalisation of an agreed tariff methodology and related parameters the authority summarised its tariff application as being: a) A capped revenue requirement of R10.275 bn, comprising marine business revenue of R8.419 bn and real estate revenue of R1.856 bn; b) Capping of the revenue requirement to R10.275 bn being premised on the authority submitting a multi-year tariff application next year with a smoothed tariff adjustment approximating CPI + 3% per annum with a floor of 8.5%; c) Tariffs: ● Minimum export tariffs of R6.00 per ton for dry bulk and bulk commodities; ● Reduction in certain container and automotive tariffs; ● 5.4% tariff adjustment of FY 2012/13 tariff book for all other quoted tariffs; ● Introduction of a bunker fuel levy of R15.00 per ton at the Port of Durban. While Khan said that he did not think that the freight industry would object too much to this year’s tariff application, he did expect some adverse comment to be raised about certain items at the Ports Regulator roadshow, due for a nationwide tour in November this year. Copies of the tariff application are available from the NPA website: www. transnetnationalportsauthority. net. You are also invited to submit written comments on the proposed tariff increases by December 14 to tariffcomments@ portsregulator.org. CAPTION TNPA must be able to recover its investment in managing port services and facilities.