South African Port Tariffs in for 10 Year Reform

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South African Port Tariffs in for 10 Year Reform

South African port tariffs are currently undergoing a review that may see a major overhaul over the next 10 years. The CEO of The Ports Regulator of SA, Mahesh Fakir, said that the reform of the port tariff strategy puts the focus on three key areas:

  • To rationalise the tariff book
  • To have a fair system of cost-reflective tariffs
  • To reduce cross-subsidisation in the ports system

In May last year The Ports Regulator of SA published a draft tariff strategy that was open for public comments. The tariff strategy overview that was published looks like follows:

ports tariff strategy

By the end of 2016 phase 3 of the overhaul of the South African ports tariffs should be completed. This phase focuses on developing a framework for beneficiated goods, the valuation of the assets of the National Ports Authority and a review and redesign of the tariff methodology. Highly beneficiated manufactured goods exported in containers would attract lower tariffs. Work will also be undertaken to deal with mineral beneficiation.

Mahesh Fakir on South African Ports Tariffs

Mr Fakir addressed members of Parliament’s Transport Committee on the Port Regulator’s plan on Wednesday. He said:

The Ports Regulator of SA aims to reduce the cost of doing business with SA and reduce the cost of exports of South African manufactured products to the world through a fair and well-structured tariff methodology on which tariff determinations are based.

He continued to say that legislative amendments were required to enhance the powers of the regulator to police the implementation of its decisions and to enhance its governance structures. One of the strategic objectives of the regulator would be to operate a tribunal to hear complaints and appeals under the National Ports Act. What was envisaged, was a quasi-judicial institution.

According to Mr Fakir budgetary constraints are the biggest issue that the regulator faces, possibly causing it to not be able to successfully implement all its programs fully and on time, according to the timeframe set out. A new self-funding model was required so that the organisation would not be dependent on the fiscus.

The Regulator will, throughout the process, engage with port users and the National Ports Authority  (NPA) alike to ensure the most equitable, fair and efficient outcome for all.