National Ports Authority Bill: hearings

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
18 June 2003
NATIONAL PORTS AUTHORITY BILL: PUBLIC HEARINGS

Chairperson: Mr J Cronin (ANC)

Documents handed out:
Transnet Limited: Amended Submission
National Ports Authority: Comments
National Ports Authority: Comments (PowerPoint Presentation)
National Ports Authority: Draft Comments
National Ports Authority Bill with amendments (2^nd draft)
National Ports Authority Bill [B5-2003]
Cosatu and Satawu: Submission

SUMMARY
Transnet expressed support for the Bill, most of the amendments and the Bill's urgent enactment, pointing out that it is silent on taxation. The NPA said it would like to be seen not just as the transitional authority, but as the actual authority. It felt that a degree of open-endedness was required in addressing the phases through which the existing entity would become an independent entity. The NPA expressed concern that the Regulator's powers were too wide and possibly uncertain. Cosatu and Satawu referred to what they perceived as unresolved issues with Government on ports' policy. The sequencing of the process was a problem and the Bill should not become law before the finalisation of negotiations with Government on restructuring. More time was needed for consultation. Labour was also concerned about the Bill's emphasis on concessions, the parallel lines of authority (of the Ministers of Transport and Public Enterprises) and the issue of placing more emphasis on intra- and inter-port competition than on regional economic development. Labour expressed sympathy with Transnet's concerns about the role of the Regulator.

MINUTES
Transnet Limited: Amended Submission
Ms R Phiyega, Group Executive: Corporate Affairs, expressed support for the Bill, most of the amendments and the Bill's urgent enactment. However, it was silent on taxation. Transnet supported the establishment of the Authority in three phases and acknowledged the vital strategic importance of the Bill.

Discussion
Mr S Farrow (DA) voiced concern about the possibility that Transnet and the National Ports Authority (NPA) might try to achieve tax exemption up-front.

National Ports Authority
Mr S Gama, Chief Executive:NPA, said that a fundamental issue was that the NPA would like to be seen not just as the transitional authority, but as the actual authority. A degree of open-endedness was required in addressing the phases through which the existing entity would become an independent entity. There should be a transfer of shares from Transnet to the Government. He also expressed concern about the role of the Regulator. The NPA considered the Regulator's powers too wide and possibly uncertain. The Regulator's function should be to hear appeals and complaints against decisions of the Authority; currently it appeared that anyone could complain about anything. Also, in the NPA's view, the Authority and not the Regulator should deal with the issue of concessions. The NPA suggested that Clause 30 (1) regarding the Regulator should be deleted. The Authority's power to inspect certain port facilities needed to be broadened.

Discussion
Mr A Ainslie (ANC) said it appeared that the NPA simply did not want to be regulated.

Mr Gama explained that the NPA was not saying that. Clause 30 (1) should be removed because it was undesirable to have a Regulator who might make it impossible to develop ports.

Mr Farrow (DA) said that dropping the clause would constitute quite a radical change. It contained important subsections about tariffs and the Regulator's role in concessions. He also pointed out that the transition of governance from the present Transnet and NPA boards to the final subsidiary had not really been discussed. He asked where accountability fitted in.

Mr Gama replied that the NPA currently controlled the Transnet board. Although it was a corporation, it was accountable to Parliament. There were also consultative committees to deal with substantive issues.

Congress of South African Trade Unions (Cosatu) & South African Transport and Allied Workers Union (Satawu): Submission
Ms J Barret presented the Cosatu and Satawu position, stating that organised labour had been struggling to engage with Government on the issue of restructuring the ports. Labour had unresolved issues with Government on ports' policy. The dispute now rested with the National Economic Development and Labour Council (Nedlac) and might become a Section 77 dispute, leading to industrial action. Labour's problem was with the sequencing of the process. The Bill should not become law prior to the completion of negotiations between Government and labour on restructuring. Labour was concerned with the emphasis on concessions at the expense of the public sector. It was a mistake to tie the legislation to a narrow option of concessioning. The latter should not be the only option, but one of a range of options, particularly public-public partnerships.

Concern was also expressed regarding the parallel lines of authority created by the Bill. The simultaneous roles of the Minister of Transport and the Minister of Public Enterprises were confusing. Labour had reservations about intra and inter-port competition being an over-arching issue. Greater importance needed to be given to the facilitation of sub-regional economic development. The new draft made no provision for regular reports to the Minister. Sympathy was expressed for problems Transnet was experiencing with the role of the Regulator. Ms Barret said the Regulator could become another self-serving bureaucracy. She asked the committee to allow more time for consultation and negotiation to take place on the Bill.

Discussion
The Department said that engagement was taking place between labour and Government. There were differences about how to approach the issue, but there was no breakdown in negotiations. He stressed that Government was committed to managing the process sensitively.

Mr Farrow asked for clarity on labour's problem with the lines of authority of the two ministries concerned.

Ms Barret replied that it seemed inconsistent to make the Regulator accountable to the Department of Transport, while the proposed Authority enabling ports to function was to be accountable to the Department of Public Enterprises.

Mr Farrow said that a balance needed to be found between bureaucratic monopolisation and pure anarchy of competition. Attention should be paid to how competition could create more opportunities for employment.

Ms Phiyega explained that the purpose of having a system of ports was to avoid negative competition, yet complacency also needed to be avoided. There should be competition when and where possible.

The Chair said that the Committee would work through the draft methodically at the next meeting.

The meeting was adjourned.