Administered prices study on economic inputs: ports sector: final report

OUTPUT TYPE: Research report- client
PUBLICATION YEAR: 2007
TITLE AUTHOR(S): R.Goode
KEYWORDS: INVESTMENT, PORTS
DEPARTMENT: Economic Perfomance and Development (EPD)
Print: HSRC Library: shelf number 5166

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If you would like to obtain a copy of this Research Output, please contact Hanlie Baudin at researchoutputs@hsrc.ac.za.

Abstract

This study indicates how the institutional framework of the state owned transport system that determines port prices is almost impervious to change in spite of explicit tariff reform between 2001 and 2003 designed to balance over and under recovery on the pricing of a range of port services. Waterfront performance plays a small role in national welfare, however, administered prices in ports and performance are subject to influence. The establishment of a port regulator will be a significant step in the institutional arrangements for South African ports Port users are understandably expectant that the port regulator will improve pricing efficiency within South African ports. However, the basic structure of the market will remain unaltered. Moreover the control of the port authority and a substantial share of the port operations activity by Transnet, a freight transport company, implacably negates the market structure principles of a landlord port architecture. Ports that are leaders in pricing and performance measures around the world are located in regions characterised by a high degree of port competition. The implications for administered pricing in South African ports is the critical requirement for practical intra and inter port competition to be encouraged. Limited access to information was a major problem for this study. The response of industry participants to divulging information are symptoms of low trust and frustration between the players in the port system. Such conditions create major challenges for the Ports Regulator and for the success of efficiency improvement efforts by any stakeholders. It is recommended that price and performance indicators be collected and made public by the Department of Transport for the purposes of establishing an information basis for monitoring the South African waterfront.