South Africa\u2019s port doctrine: dilemmas and the way forward

Ayanda Meyiwa,Mihalis Chasomeris

doi:10.1007/s40152-020-00166-2

Abstract

This study uses content analyses to examine 137 stakeholders’ submissions to the Ports Regulator of South Africa from 2009/2010 to 2018/2019, classifying themes into two broad categories, namely port authority pricing and port governance, which together define South Africa’s port doctrine. Results show that South Africa’s system of eight commercial seaports is unique and is financed and managed using a mix of elements from the Anglo-Saxon and Asian doctrines and attempts to charge port tariffs according to the Anglo-Saxon doctrine. The paper critiques the port authority pricing methodology employed in South Africa and shows its inconsistency with sound pricing principles and global best practices. The governance structure and how it has persistently defied legislation, which served to promote anticompetitive behaviour and at worst accommodated years of corrupt activities that have recently surfaced, are also discussed. The recommendation is a swift incorporation of Transnet National Ports Authority (TNPA) as a stand-alone entity outside of Transnet. Incorporation of TNPA would help to remove the present conflicts of interests, improve transparency, accountability and regulation as well as incentivise improved productivity and infrastructure spending, and attract private investments into the ports system.

Highlights

Introduction and backgroundThe African National Congress (ANC), the South African ruling political party, follows a developmental state orientation for its political-economic policies
South Africa is pursuing a model of a democratic developmental state
South Africa’s system of eight commercial seaports, is unique and is financed and managed using a mix of elements from the Anglo-Saxon and Asian doctrines and appears to be attempting to charge port tariffs according to the Anglo-Saxon doctrine

Summary

Introduction

The African National Congress (ANC), the South African ruling political party, follows a developmental state orientation for its political-economic policies In this paradigm of economic growth and development, the state governs the markets and facilitates both the allocation of the country’s key strategic resources and finances to purposefully selected industries and the distribution of incomes in the economy to correct market failures in this respect (Low, 2004). It is worth mentioning that such a downward trend in investment into ports has coincided with the market demand strategy ( known as Transnet 4.0) that proposed a total planned capital expenditure of R300 billion over 10 years from the year 2012 Of this planned expenditure, R87 billion was earmarked for ports, a CAPEX that proved to be above TNPA’s Regulatory Asset Base at that time and was Maritime Studies (2020) 19:179–191 going to be funded through an amalgamated loan from various international financial institutions (Aderibigbe, 2015). These two observations, along with a questionable cost recovery method TNPA has continued to use in order to collect revenue from port stakeholders which neither conforms to international best practice nor reflects the pricing principles TNPA claims to uphold, lead the authors to believe that TNPA’s commitment to economic growth is only nominal and not practical

Methods

Results

Conclusion