The Transnet National Ports Authority (TNPA) on Tuesday proposed the implementation of a revised pricing strategy that would leverage the user-pays principle and be implemented in stages through to 2019.

“Our pricing strategy boils down to one core question – which port user is the greatest user of which asset, and to what degree are they responsible for the costs of this asset,” said TNPA CFO Mohammed Abdul.

The pricing structure would consolidate national port dues and berth dues in a single tariff structure, rather than administering individual structures for each port.

The TNPA currently garnered 61% of its revenue from cargo owners, 20% from shipping lines and 19% from its tenants.

The proposed pricing structure would increase tenant and shipping line contributions to 33% and 21% of revenue respectively, while cargo owners’ contribution would drop to 46%, with required revenue driven by a tariff methodology on a disaggregated level.

“Our fundamental point of departure was how to fairly apportion costs so that the TNPA’s total revenue basket – which is required for it to achieve its mandate – could be achieved,” explained Abdul.

Recommendations included the ring-fencing of widely used assets – such as breakwater structures – as common infrastructure, with the cost borne by all users, as well as for shipping companies to be responsible for costs related to the maintenance of wet assets and marine services.

The revision further proposed that cargo owners pay for the administration of cargo dues, which would be simplified to a single tariff per cargo handling type, as well as the maintenance of common dry infrastructure.

In addition, port tenants would be responsible for the administration of property costs and related property maintenance expenditure, as terminal operators derived value primarily from access to the quay wall and the adjacent land.

The TNPA added that it had historically under-leveraged rental income as a revenue source and proposed a lease management regime that would enable the authority to realise additional economic value from its terminal properties.

Further, the TNPA said the overall proposed strategy was aimed at allowing for ongoing investments in the maintenance and extension of the South African ports system and to ensure effective cost recovery across all national ports.

“This pricing structure would address the requirements of the authority’s directives, as well as concerns communicated to us by stakeholders,” Abdul claimed.

These concerns included complaints of prohibitively high port tariffs, lack of clarity on the underlying rationale behind tariffs, as well as a lack of transparency in terms of what one user paid in comparison to another.

Abdul added that, ultimately, the final tariff structure would benefit cargo holders and promote containerisation, as well as the export of industrial goods.

Stakeholders were encouraged to provide feedback on the proposed revised pricing structure by either endorsing or requesting amendments to the strategy, rejecting it outright or by proposing an alternative, by May 31.