Regulator addresses port issues

Ports Regulator of South Africa announces tariff decisions

SOUTH AFRICA: Announcing their record of decision on Friday, the Ports Regulator of South Africa (PRSA)highlighted several pressing concerns within the port system including irregular expenditure, poor performance levels, the slow progress of corporatisation and the lack of a strategy for ship repair.

First announced in June 2021, the corporatisation of Transnet National Ports Authority (TNPA) has not yet materialised, but according to Mukondeleli Johanna Mulaudzi, Chief Executive Officer PRSA, this is expected to be completed by 30 April 2025.

Addressing the industry on Friday PRSA noted that the Minister of Transport, who now represents the shareholder of Transnet SOC Ltd has committed to this timeline. This is being reinforced by the Minister of Finance (Treasury) through the reported conditions attached to the R47 billion guarantee facilities provided to Transnet.

The Treasury’s conditions reportedly include implementation of institutional reforms including the reform of Transnet Freight Rail business through the establishment of an infrastructure manager separate from rail operations.

Interestingly, in noting these developments, PRSA has evaluated the port authority’s tariff application by treating the Authority as a corporatised entity. As such, it is anticipated that a corporatised entity will be able to secure an investment grade credit rating that will allow it to raise funding at a reasonable cost.

Ship repair strategy not delivered

In last year’s record of decision PRSA had concluded with the requirement for TNPA to submit seven overarching port strategies by March of this year. This included the Ship Repair Strategy.

This has yet to be delivered and the Regulator has now stipulated that it be finalised by 30 September 2025 – effectively providing an 18 month extension on the original deadline.

The tariff increase on ship repair activities is contingent on the publishing of the Ship Repair by the new deadline and failure to do so will result in a clawback on the additional revenue resulting from the tariff increase approved for ship repair activities.

While this hardline will certainly be welcomed by the sector, the development of a comprehensive ship repair strategy has been lacking for some time within the port space and it should be noted that the publication of any strategy should be contingent on robust engagement with the sector before it could be considered an adequate representation of what is required to bolster the marine engineering industry.

Tariff decisions

The Authority requested an average tariff increase of 7,90% for the period 01 April 2025 to 31 March 2026, along with indicative tariffs increases of 18,61% for the period 01 April 2026 to 31 March 2027 and 2,52% for 01 April 2027 to 31 March 2028.

After reviewing the Application, stakeholder submissions, presentations in the public consultation process, and the updated inflation as per the Medium-Term Budget Policy Statement, the Regulator determined that an appropriate overall weighted average tariff increase for the Financial Year 2025/26 is 4,40%.

All marine tariffs for existing commercial South African flagged vessels, as well as commercial vessels registered in South Africa from 2019/20, will receive a 30% discount, applicable year on year until reviewed by the Regulator.

All license fees for port activities as per Section 5 of the Tariff Book, will continue to be discounted by 30%. Additionally, all license fees applicable per port for the tariff year 2025/26, can continue to be paid in equal instalments on an annual basis over the period of the license.

A reduction in port dues will continue to apply to vessels not engaged in cargo working for the first 30 days, coasters, passenger vessels and small vessels visiting ports that are not their registered port.

Additionally, a 60% reduction is applicable to vessels undertaking bunker-only calls or for stores or water provided that the vessels’ stay does not exceed 48 hours.

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