Tribunal rules against SAFT over in-port lease

Ray Smuts THE COMPETITION Tribunal has ruled against Southern African Fruit Terminals in its quest for an in-port operating lease on the same terms as those enjoyed by rival Fresh Produce Terminals. FTW understands the decision against SAFT - which had also lodged its objection on the basis of uncompetitive quayside practices against FPT parent company Capespan and Portnet - was based on insufficent grounds. SAFT MD Patrick McLoughlin declined to comment in detail, save to say: "We are extremely disappointed with the tribunal's ruling, we did not expect the result. "It seems to us the tribunal opted for a politically neutral position. We think it is a great pity that the troubled fruit industry won't get any cost saving now. "However, necessity is the mother of invention and in SAFT's case the lack of resolution of problems in the ports has encouraged us to develop more fully our supply chain services. "We will continue to look for solutions in consultation with all stakeholders in order to provide an even better service to the fruit industry." While industry observers have expressed some concern that the judgement entrenches Capespan/FPT's "exclusive" rights, FPT m.d. Ronnie Kingwill says the tribunal's pronouncement is a "positive signal" with regard to opportunities for international investment and local empowerment. He believes the decision is important in the light of future concessioning of terminals in the former Portnet's - now the National Ports Authority's - drive to become a facilitator of fair competition in South African ports. "For the fruit export industry especially, with the recently announced cargo dues increase on containers, the case has emphasised the need for co-operation and improved service offerings by the terminals (SAFT and FPT) which are co-operating to find the most cost-effective way to export fruit via conventional vessels to the traditional markets and the highly sophisticated and closely regulated Japanese and US markets." Kingwill adds that the tribunal's decree paves the way for the 12-month-old offer by Mersey Docks and Harbour Company and local empowerment group Nozala to take up a major shareholding in FPT from Capespan. (A precondition of the Mersey offer was a revised commercial lease agreement between National Ports Authority and FPT). "The revised commercial lease agreement is in itself a benchmark as the tariff restructuring of the NPA takes a new direction of transferring the cost of maintaining the berths to the terminal operator, offset by the reduction in wharfage now shown as cargo dues. "Ultimately, this will lead to an improved utilisation of the berths and improved service offerings by the terminals. Accountability for maintaining the berths and related equipment now lies in the hands of the terminal operator."