Transnet seeking higher port taxes
AFTER having to absorb significant decreases in its port tariffs last year, the Transnet National Ports Authority has applied to the Ports Regulator of SA for a 14.39 percent tariff hike for the 2014-15 financial year.
The ports authority’s application for an average 5.4 percent increase last year was turned down by the regulator, which instead forced it to cut container export tariffs by 43.2 percent, container imports by 14.3 percent and vehicle export tariffs by 21.1 percent.
South Africa’s port costs are among the highest in the world, and the regulator’s decision was in line with the government’s moves to address this issue. A recent study, published by the regulator, found tariffs for Durban to be 874 percent above the global average for containers.
President Jacob Zuma, in his State of the Nation speech last year, announced that the cabinet would set aside R1 billion to provide rebates for companies to offset high port costs, which have taken the form of the excessive tariff increase margin credit mechanism.
Transnet Group spokesman Mboniso Sigonyela said that, in effect, the ports authority had submitted an application to the regulator for an overall tariff adjustment of 8.5 percent for 2014/15, which the regulator had issued for public comment.
TNPA has asked the regulator to release R454 million from the ETIMC’s mechanism, which effectively would reduce its average tariff adjustment request from 14.39 percent to 8.5 percent.
“The TNPA is mindful of Transnet’s commitment to reducing the cost of doing business in South Africa and is of the view that it can deliver on the planned execution of the market demand strategy within the 8.5 percent budget increase instead of 14.39 percent for the 2014/15 financial year,” said Sigonyela.
The ports regulator published adverts on Monday calling for public comment on the ports authority’s tariff adjustment application.
The deadline for written submissions is November 4, but the regulator is also set to hold public hearings next month. The Durban hearing is to take place at the Garden Court Hotel in uMhlanga on October 4.
Andrew Layman, chief executive of the Durban Chamber of Commerce and Industry, said the chamber would submit comment to the ports regulator on the ports authority’s tariff increase application.
“The chamber’s ports committee meets next Thursday and this will be on the agenda. We will submit comments, possibly in conjunction with member organisations which understand better the technical details,” he said.
“As in most cases regarding tariffs, the public information relates to an average tariff increase, which appears to be too high to be acceptable. But the real issues lie within the tariff structure. The ports regulator has had considerable influence in the revision of the traditional structure and we are aware that he continues to campaign for other fundamental principles to be adopted.”
Layman said the public hearing roadshows would be revealing and there would be good representation there from business. The chamber would be in a better position to comment on the ports authority’s application after that.