Shipping companies welcome ports regulator's low tariff increase

The increase is much smaller than had been sought by the National Ports Authority and comes a week after President Jacob Zuma pledged, during his state of the nation address, to cut the costs of doing business in the country.

Studies have shown South African ports to be among the most expensive in the world, and some shipping companies have even threatened to cease operations in SA because of the high costs and associated poor productivity at ports.

The regulator said the 2,76% increase was "reasonable". This was after it had rejected a National Ports Authority application for an 18,06% rise, and after considering various submissions from stakeholders.

South African Association of Ship Owners CEO Thato Tsautse said she was "so excited" about the low tariff, adding "it is the best result we could have hoped for".

"The president spoke about the need to increase trade through our ports and how to do this," she said.

Mediterranean Shipping Company CEO Captain Salvatore Sarno said the shipping industry worldwide was in crisis due to lower shipping volumes caused by the economic problems in the US and Europe.

He said the increase was "very honest - well done to the regulator" - given the market conditions and what the National Ports Authority had applied for.

Mr Zuma said in the state of the nation address that the government had been looking at ways to reduce port charges, as part of reducing the costs of doing business in SA.

"The issue of high port charges was one of those raised sharply by the automotive sector in Port Elizabeth and Uitenhage during my performance monitoring visit to the sector last year," Mr Zuma said.

The role of the Transnet-owned National Ports Authority is to plan, provide, maintain and improve facilities at SA's seven commercial ports. The authority said in its submission to the regulator that it required the 18,06% increase to fund capital expenditure plans of R2,24bn in the year to March 31 2013, from R1,78bn budgeted for in the previous year.

The authority is not subsidised by central or city governments for its capital projects; most other port authorities in the world are.

The National Ports AuthorityN was one of Transnet's best performing divisions, with a R3,99bn pretax profit in the year to March 31 last year. Transnet's pretax profit was R5,7bn over the same period.

Mr Zuma made no mention in his address of plans for a new dug-out port near the site of eThekwini's old international airport, a project expected to cost more than R100bn.

Source: Business Day