The regulator

The Regulator has also just shown its teeth rejecting a proposed tariff increase for port services of 18.6% from Transnet National Port Authority after considering various submissions from stakeholders and setting an increase of 2.76% which it describes as “reasonable”.

The decision followed on from President Jacob Zuma pledging, during his state of the nation address, to cut the costs of doing business in the country and specifically referring to the goal of reducing port charges. These charges have come in for a lot of criticism from importers and exporters who accurately cite them as among the highest in the world as well as complain of poor service at South Africa’s seven commercial ports.

Transnet 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 2013. The authority is not subsidised by central or city governments, although the National Ports Authority has traditionally been one of Transnet’s best performing divisions with a R3,99bn pre-tax profit in the year to March 31 last year.

Transnet appears to have taken the decision stoically but has commented that it will be, “…engaging the Ports Regulator, as part of the Regulator’s consultation process with port stakeholders, on the development of a tariff methodology that supports our ability to invest in South Africa’s logistics infrastructure.”

The activity of The Regulator with the highest level of public awareness is clearly the annual NPA tariff determination. It is, however, by no means its only area of activity. In presenting, the 2012/13 NPA Tariff decision Gloria Tomatoe Serobe, chair, Port Regulator, took the opportunity to comment on other aspects of The Regulator’s work and to highlight its next development phase.

“With,” she explained, “the promulgation of the Ports Act on August 4, 2005, The Ports Regulator was established as the institution responsible for economic regulation of the port industry. This was a very broadly defined responsibility that included obligations with respect to traditional economic regulation such as tariff determinations but also included diverse obligations such as industry promotion, transformation and supporting institutional reform, including those activities usually associated with an industry ombudsman, such as hearing complaints and appeals.”

She further underlined that the journey of establishing The Regulator had been a very challenging one. “Every step was a grinding slog, and we came to appreciate the nuances of setting up a critical public entity from scratch, in the context of multiple and complex compliance regimes,” she said. Nevertheless, South Africa’s Port Regulator today is one of the few independent Port Regulator’s in existence and is certainly a model that any country should look at that is considering treading this path. Nigeria, for instance, which is on the brink of writing into law a Port Regulator.

For its next phase of development South Africa’s Regulator plans to see a much greater level of concentration on Ports Act compliance and efficiency, and, complementing this, generally growing its capacity.