Business blasts Transnet plan

The Cape Chamber of Commerce has lashed out at Transnet's request for an 18.06% increase in port tariffs and is using a leaked US diplomatic cable to support its case.

A letter from the chamber to the port regulator quoted a Wikileaks cable in which Transnet admits it sees ports as its "cash cow" and uses their profits to subsidise its loss-making operations.

The chamber also produced evidence to show that port tariffs had been artificially increased to serve as a tax on imports - overt taxation would not be permitted in terms of the General Agreement on Trade and Tariffs.

In the letter, the chamber argued that Transnet should not be entitled to the proceeds of the concealed tax and that it has used every trick in the book to justify tariffs that are hundreds of percent higher than those levied at leading ports in the developed world.

Confirmation that South African port tariffs are excessive could be found in the Wikileaks cable from US diplomatic staff in South Africa to Washington, which was released on August 24.

The report stated as an unchallenged fact that "the South African government has historically redistributed Transnet National Ports Authority profits to other divisions".

The cable records the proceedings of a meeting in Cape Town some time after 2008. It was attended by officials from Transnet National Ports Authority, Transnet Port Terminals, the Council for Scientific and Industrial Research, and the maritime industry.

It quoted a comment by the council's Emma Maspero that "Transnet's financial situation provides a disincentive for the South African government to fully implement the changes recommended in the National Ports Authority Bill.

"Cilliers [Billy Cilliers, the ports authority's manager for planning and port development at the time] concurred that the ports authority was the cash cow for Transnet and its transfer to an independent authority would entail a difficult transition for Transnet. He noted that no other country" had a port authority or operator structured similarly to South Africa's.

In the chamber's letter, Michael Bagraim, its president, said: "Port tariffs for container imports and exports are already more than double the average of a selection of 12 ports in various parts of the world, according to Mihalis Chasomeris in his benchmarking study, Port Pricing in South Africa."

"Tariffs in Durban [and other South African ports] were roughly three times as high as tariffs in Rotterdam, four times the tariffs in New York and five or six times the tariffs for the port of Antwerp."

The chamber said there was a clear case for a phased reduction in charges to bring them in line with those of most ports in other countries.