DURBAN - THE PORTS Regulator of South Africa has elected not to increase the average tariffs for the financial year 2021/22 to aid the battling maritime industry amid Covid-19 disruption that has hammered SA's ailing economy.
At the end of July, the National Ports Authority (NPA) applied to the Ports Regulator in terms of a section of the National Ports Act for approval of the tariffs for services and facilities it offered for an average of 19.74 percent increase for the period April 1, 2021 to March 31, 2022, together with indicative tariffs of -0.29 percent for the period April 2022 to March 2023 and -7.86 percent for the period April 2023 to March 31, 2024.
The regulator said in conducting its assessment, it took a view on a number of cargo volume and market-related factors, including the inflation outlook as well as the cost of debt, the operational and cash flow requirements of the NPA. In addition, the Ports Regulator said it was cognisant of the poor economic climate in the country, both from the underlying structural challenges SA faced, as well as the more pressing impact of the Covid-19 pandemic on the port system.
“The decision was, therefore, taken in line with the call by President Cyril Ramaphosa for all role-players to contribute to the recovery of the South African economy as a matter of urgency. In this regard, the Ports Regulator is of the opinion that an overall 0 percent tariff increase as well as an export-biased lowering of container cargo dues would be in the best interest of stimulating local manufacturing, beneficiation and employment creation,” said the Port Regulator’s regulatory committee chairperson Dr Victor Munyama.
Munyama said yesterday that the Ports Regulator had concluded that an appropriate overall increase in average tariffs for 2021/22 was 0 percent. “In particular, marine services and related tariffs (Sections 1 to 8 of the Tariff Book, excluding Section 7 that deals with cargo dues) are to increase by 5 percent. Container (full) export cargo dues are to decrease by 10 percent, container (full) import cargo dues to decrease by 3 percent, coal export cargo dues to increase by 5 percent, magnetite export cargo dues to increase by 5 percent and all other tariffs are to remain unchanged,” said Munyama.
In addition to the 0 percent tariff change allowed for during the 2021/2022 tariff year, the incentive for South African flagged vessels (in its final year) was retained and would be revisited in the next tariff application process. Specific to the 2021/22 tariff year, and aimed at reducing the cost of doing business for entrants to the port system, all licence fees would be reduced by 30 percent, the regulator required the NPA to develop and introduce a system to target and support the small medium, micro-enterprise licence holders, especially historically disadvantaged individual and women-owned and/or managed businesses.
A further reduction in the existing discounts to non-cargo working vessels for the 2021/22 tariff year was included in the Record of Decision with short stay vessels taking on bunkers, water or stores receiving a 60 percent discount. Passenger vessels and some small vessels would receive an increased discount of 35 percent from the previous 25 percent. For the tariff year 2020/21, the regulator approved revenue of R11.97 billion against the R13.569bn applied for by the NPA.
Acknowledging the decision of the regulator, NPA chief executive Pepi Silinga said that they recognised the positive instruments that were being put in place to support the relatively depressed economy, thereby, recognising national imperatives.
“We need to recognise the difficulties that in the past period have been experienced by the maritime industry. And in particular the need to lower the barriers to entry for the new entrance and national imperative for economic transformation. The rather alarming decline in the levels of capital expenditure and how those compromise the capacity of future generations to use the maritime industry as a catalytic agent for economic development,” he said.
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