Port authority aims for 8.5% tariffs rise
Linda Ensor
THE Transnet National Ports Authority (TNPA) needs an average 8.5% tariff increase from the Ports Regulator for 2014-15, its chief executive officer says.
The increase was necessary for the organisation to afford capital expenditure of R2.4-billion in the 2014-15 year‚ Tau Morwe said on Sunday.
The Ports Regulator is expected to publish a tariff determination for ports before the end of next month‚ its acting chief executive, Marissa Damons, said last week.
The determination is keenly awaited as it will have a significant effect on the cost of doing business in general and on the competitiveness of exports‚ as cargo dues and marine service tariffs are a critical part of total supply chain costs.
New tariffs will take effect from April 1‚ the start of the Transnet group's financial year.
While Morwe could not predict the regulator's decision‚ he said that the TNPA had drawn up its tariff proposal for the first time on the basis of guidelines provided by the regulator.
He hoped the regulator would agree for the first time to a multi-year determination‚ which would mean that the approved tariff would apply for each of the next three years.
Failure to receive the aboveinflation increase requested would threaten the TNPA's development plans for Coega‚ Durban‚ and Saldanha Bay, and its acquisition of new tugs and a dredger. The tariffs will reflect the new pricing strategy adopted by the TNPA‚ in which the charges on containers and cars will be reduced.
The 8.5% is an average for all product lines‚ which would have differentiated tariffs.
"The regulator not only needs to take [into account] the impact of a price change on the owner of the ports [the TNPA] but is also required to consider the impact on the users of the ports and all other role players‚" Damons said.
"Critically‚ the regulator needs to weigh the need for the provision of these services and infrastructure over the long term‚ with the short- and medium-term economic impact of tariffs."
The regulator had to allow the authority to recover its costs and also to make a profit commensurate with the risk of running its operations. "Within this mandate the regulator has in the past determined a suitable tariff level for the port system – sometimes differing greatly from the application‚ as a 0% increase last year testifies.
"As economic and financial realities change‚ so do the considerations and the trade-offs calculated."
Damons said there were imbalances in the tariffs. South Africa's tariffs on containers‚ for example‚ were much higher than global averages while others were more in line with‚ or even below‚ global averages, for example‚ dry bulk commodities.
She said the publication of the regulator's final determination before the end of February "will allow the TNPA sufficient time to adjust the tariff book".
The 8.5% is below the 14.4% the TNPA requires. The difference will be made up by the excessive tariff increase margin credit (ETIMC)‚ a mechanism based on retained earnings designed to prevent excessive yearly tariff increases that would be a shock to the economy. The present credit is about R900-million.
The TNPA has projected a cash revenue from its marine business of R8.4-billion in 2014-15 and this would require R454-million from the credit facility.
Revenue from the property business is forecast to be R2-billion for the next financial year. – BDlive
