Ports regulator denies Transnet ports body a tariff increase

The country's ports regulator has rejected a proposal from the Transnet National Ports Authority (TNPA) for a tariff hike of 4.98% for the 2024/25 financial year.

Instead, the Ports Regulator of South Africa (PRSA) opted for a 0% increase.

The decision has been hailed in the industry as a significant one 'aimed at easing financial burdens on customers in the face of challenging economic circumstances'.

Reporting back, the PRSA notes that the financial year the tariff application would apply to, coincides with mixed economic conditions locally and globally.

"The sea trade and ports operate within the challenging space with geo-political tensions, climate change risks, higher inflation increasing input costs and effectively, customers with diminished disposable incomes."

"Whilst the regulator is cognisant of the ports' and related supply chains' severe constraints in the recent months, which contributes to the underperforming economy and pressure on port costs, this tariff determination is on a forward-looking basis for a slightly improved growth outlook and export volumes for the exporters."

Ports Regulator of South Africa

Bruce Whitfield interviews Johanna (Jowie) Mulaudzi, the PRSA CEO.

She explains what the port revenues go towards.

"The tariff methodology allows the authority as the port infrastructure company of the country to raise revenues from port users to be able to implement their CapEx, their OpEx... cover their tax liability as well as then any return on their investment."

"The regulator has four months within which to do the assessment, and the announcement today is the culmination of that process,... and the APPROVED average tariff adjustment for the 2024/25 financial year is 0%."

Johanna (Jowie) Mulaudzi, CEO - Ports Regulator of South Africa

Mulaudzi makes a clear distinction between the responsibilities of the Ports Authority on the one hand, and beleaguered Transnet Port Terminals (TPT) on the other. It is with TPT that most of the problems lie, she emphasizes.

"... in terms of the institutional architecture, the Ports Authority is responsible for infrastructure, and then your operators are responsible for superstructure.... This application relates to infrastructure that is necessary for vessels to come in, the cargo to be worked and so on, but the cranes and everything required to lift those containers off a vessel... are the responsibility of TPT."

"The Ports Authority, in terms of the National Ports Act, is then responsible to oversee that all terminal operators are efficient... What we have approved, allows them a revenue of R14.4 billion compared to the R14.9 billion that they had applied for."

Johanna (Jowie) Mulaudzi, CEO - Ports Regulator of South Africa

Hear more detail in the interview clip at the top of the page