A case study of the South African Maritime Safety Authority
Transnet Limited currently owns the real estate of South African ports. The port authority function is delegated to Portnet, an operating arm of Transnet, and services within the ports are provided by either Portnet or a private enterprise. The incorporation of such a pseudo port authority into a transport company has resulted in the formation of several undesirable conditions that has detracted from the primary purpose of ports, skewed pricing, misallocated port revenues and created a suspicion in the maritime and transport industries about the impartiality of the port entity and its extensive integration with a transport company.
There is at present no external port regulatory and monitoring authority. Portnet, through Transnet, enjoys a natural and legally structured monopoly and also acts as a regulator.
The White Paper on National Transport Policy has defined the policy in addressing these challenges. Four fundamental port policy guidelines were recommended. These are briefly:
·Establishment of the Port Authority;
·Establishment of the Independent Port Regulator;
·Separation of the port authority and port operations functions; and
·Promoting low cost, high level of service, and shipper choice in the port operations by creating a competitive environment in the commercial ports system.
Government will reduce its direct involvement in operations to allow for a more competitive environment.
Government, through the Port Authority, will ensure unbiased regulation of safety and quality in general; control of market access where this is necessary, and to regulate excessive tariffs in cases of monopolies.
The institutional positions of non-governmental statutory bodies, such as Transnet are still under review as part of the process of restructuring state assets, and their policy direction will be finalized in the near future.
1.1 The Ministry and Department of Transport
The Ministry and Department of Transport bears the responsibility of ensuring that efficient and effective, seamless inter-modal transportation is achieved in the national interests of South Africa.
With regard to the commercial ports, that responsibility is fulfilled by:
·Developing and maintaining the national commercial port policy;
·Developing and maintaining the port regulatory framework;
·Developing and maintaining the port legislative framework;
·Appointing a National Ports Forum to advice the Minister of Transport on national commercial port policy matters; and
·Exercising a monitoring role.
The Ministry and Department of Enterprise will facilitate the smooth transformation and implementation of this policy together with other relevant policies. The National Port Authority will remain within Transnet Limited until Transnet’s restructuring is completed.
The National Port Authority is a body that will be responsible for the management of the national commercial port system
The general corporate characteristics of the envisaged National Port Authority shall be:
1.A State-Owned corporate entity, created in terms of an envisaged National Ports Authority Act. As a State-Owned enterprise, the National Port Authority shall be firmly managed in terms of the Public Finance Management Act, 1999.
2.The National Ports Authority shall also operate as a company in terms of the Companies Act, with the state being the only shareholder.
The National Port Authority shall be directed and controlled by a Board of Directors answerable to the Minister of Public Enterprises.
The Minister of Public Enterprises shall appoint the National Port Authority and its Board of Directors.
The National Port Authority shall be responsible for the landowner, control, utility and quasi-regulatory functions detailed below.
The landowner functions entail:
1.Owning, developing and managing the port property portfolio;
2.Advising on, and implementing national port policies and development strategies;
3.Providing and maintaining port infrastructure (breakwaters, channels, berths, etc.);
4.Providing or arranging road and rail access to port facilities;
5.Providing or arranging services and utilities (water, lights, power, sewerage and telecommunications);
6.coordinating port marketing and promotional activities; and
7.Maintaining the sustainability of the ports and their environs.
The control functions entail:
1.Providing vessel traffic control and navigational aids;
2.Licensing/concessioning of terminal operations and/or related services;
3.Safeguarding port user’s interest against port operation and/or service monopolies; and
4.Monitor and ensure compliance with applicable laws and regulations.
The above control functions of the National Port Authority entails amongst other things that the National Port Authority is entitled to monitor the performance of the terminal operators. Why?
The implementation of a concession/lease agreement imposes on the part of the National Port Authority an agreed level of supervision of the operational results of the contract’s execution. The aims of such supervision are:
·To ensure that the operator uses the potential of the facilities to their fullest capacity in the most efficient manner.
·To obtain confirmation that the port users will receive services which offer a degree of quality and effectiveness that is commensurate with the demands of international trade.
In essence, the above control functions of the National Port Authority represent regulation of operational activities within the port confines. All activities within the ports, particularly terminal operations, will be ‘regulated’ by the National Port Authority directly.
The port control functions will involve substantial powers given by the State to the National Port Authority, the majority of which will be by appropriate port legislation.
The port utility functions entail:
1.Ensuring the physical transfer of cargo and passenger between sea and land (stevedoring and terminal operation services);
2.Provision dredging, tug, piloting and berthing services; and
3.Ensuring that adequate warehousing and storage is provided within the ports on a commercial basis.
The quasi-regulatory functions entail:
1.marine environment;
2.leasing; and
3.Land planning and development of ports.
2.NATIONAL COMMERCIAL PORTS SYSTEM
The extensive public investment in port infrastructure does not provide an adequate return to port users and taxpayers, therefore Government will concession port operations to enable users of the system to have more say in how they work.
A National Commercial Ports System has been identified that will be financially self-sufficient ports vital to domestic, regional and international trade. All the existing commercial ports, i.e. Richards Bay, Durban, East London, Ngqura, Port Elizabeth, Mossel Bay, Cape Town, Saldanha Bay, Port Nolloth, and offshore cargo handling facilities as well as all future ports and facilities to be constructed, will be managed and administered by the National Ports Authority (NPA) and it will instill commercial discipline in South African major ports and pave the way for efficiency gains necessary for ports and users to remain competitive in the global economy.
It is necessary for the National Commercial Ports System to be guided by the Consultative committees, which will be made up of representatives nominated by user groups and various levels of government. Government funding will not be available for the National Ports Authority.
3.NATIONAL DEVELOPMENT STRATEGY FOR COMMERCIAL PORTS
The commercial ports of South Africa will be operated on a national commercial port system basis, with the ports complementing each other rather than competing with each other. Government encourages beneficial intra-port competition between port operators within a port.
Port development cannot be considered in isolation, but should be integrated into any national, provincial and local economic and spatial development initiatives, and also support the RDP. There should be synergy among port development, and national and provincial economic and development strategies. Long-term location planning for ports should run parallel to provincial and regional economic development plans.
The development of commercial ports must be integrated in nature, with port facilities being planned together with other elements of the transport system. The planning and integration of port facilities into the broader transport network should be co-ordinated at the appropriate sphere of government.
To be continued
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