Donwald Pressly
Transnet’s proposal to slash port tariffs for beneficiated goods has been broadly welcomed but the intention, in the longer term, to hike tariffs on raw material exports, such as iron ore, has come with a warning that it may “kill the golden goose”.
Yesterday Kumba Iron Ore, which transports its ore from Sishen to Saldanha on a rail line for export, played down the announcement made in the trade and industry portfolio committee on Wednesday.
“Kumba is studying the statement by Transnet and will respond as and when appropriate,” spokesman Gert Schoeman said. “We have a long-term agreement in place with Transnet governing the transport to and export of iron ore via Saldanha, which determines the tariffs we pay, as well as providing a mechanism for adapting these annually.
“Any tariff changes will have to be discussed in the context of this agreement.”
Brian Molefe, the chief executive of Transnet, said there would be significant restructuring of port tariffs to bring pricing into line with the government’s industrial policy.
He told Sapa that the mining sector, which he expected to object to plans to hike tariffs on dry bulk cargoes by more than two thirds, had been “hugely subsidised” by a tariff structure weighted in favour of raw exports at the expense of manufactured goods and agricultural produce.
Under the restructuring, container cargo dues would be cut by 48 percent as early as next month, but those on dry bulk would rise by 68 percent.
DA deputy trade spokesman Geordin Hill-Lewis said there was a danger that the hike on unbeneficiated goods could kill the goose “that lays the golden eggs”, although Molefe suggested that these hikes would only be phased in by 2019.
Hill-Lewis said the announcement came as a surprise. While MPs had been told for some time that a new port tariff structure was on the horizon, the announcement of increases of two thirds were a shock.
“However, it is good news that tariffs on manufactured goods are going to go down,” he said, but he noted that if tariffs were going to decline on the smaller side of the business – agricultural and manufacturing – that would mean the bigger revenue sources, such as mineral commodities, would be contributing even more to the ports. The ports were already declaring profits of some R4 billion a year, he added.
Trade and Industry Minister Rob Davies said last night that his department had been concerned that the structure of export tariffs had been “a disadvantage for manufactured exports”. He said South Africa had among the highest tariffs in the world on exports, “higher than import tariffs”.
“What is being proposed is a move in the right direction,” Davies said.
“We are supportive of a tariff structure that doesn’t cross-subsidise primary products’ export through higher charges on value added goods.”
Business Unity SA welcomed the significant tariff cut on containerised exports in the near future.
“Taken together with the recent decision by the National Energy Regulator of SA [to limit power price hikes], these are modest steps in the right direction to limit the damage caused to the… economy by excessive increases in administered prices in recent years.”