Amendments to National Ports Authority Bill: Department briefing

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
20 October 2004
AMENDMENTS TO NATIONAL PORTS AUTHORITY BILL: DEPARTMENT BRIEFING

Chairperson: Mr J Cronin (ANC)

Documents handed out:
Department suggested amendments to National Ports Authority Bill
National Ports Authority Bill [B5B - 2003]

SUMMARY
The Department briefed the Committee on proposed amendments to the National Ports Authority Bill. The emphasis of the amendments was on the regulatory role played by the Ports Authority. Ports had become increasingly corporatised and operated by service providers. For instance, an independent service provider had run the car terminal at the Port of Durban. The Regulator had to concur with the Minister in cases of emergency. The Committee felt that additional input on the proposed amendments be sought from stakeholders by 29 October.

MINUTES

Chapter 2: Establishment and Incorporation of Authority

Clause 3(2): Process before establishment of authority
Mr Dumisane Ntuli, Department Director of Maritime Transport, went through the amendments with the Committee. They had needed to shift more responsibility into the hands of the Ports Regulator. They had recommended that this clause be replaced.

Clause 4(1)(a): Conversion of Authority
The Department suggested the omission of this clause and its replacement with the discretionary power of the Minister to convert the company into a public company without prior consultation with the company board.

The Chairperson explained to members that the National Ports Authority had been the major source of revenues for Transnet, with about 50% derived from the National Ports Authority. The powers of the authority had to be regulated to ensure proper pricing. Simple corporatisation of the NPA could have devastating consequences. The Minister of Public Enterprises had to corporatise Transnet at a suitable time.

Mr Ntuli added that the relevant government Ministers had committed themselves to corporatisation after the Bill had been become an Act of Parliament. The amendments were informed by the realities that are faced by Transnet. Furthermore, the changes to Clause 4 were about the conversion of the subsidiary company to an independent company of Transnet.

Chapter 3: Ports under Jurisdiction of Authority and Functions of Authority

Clause 11: Ports under jurisdiction of authority
Mr Ntuli reported that the emphasis had been to omit "Authority" and change it to "Regulator". The change had been necessitated by an industry call for a strong effective Regulator. The Department had to identify the functions that would be the responsibility of a Regulator. That would ensure that land use within ports would be regulated properly. The functions of regulating would then be moved from the Authority to the Regulator.

Chapter 4: Board, staff and assets of authority

Clause 15(2)(a): Nomination and appointment of members of Board
Mr Ntuli reported that the proposed amendments were informed by an experience that the government has gone through when appointing members. Quite often newly appointed Board members did not appreciate the enormity of the work expected of them. The proposed amendments would ensure that the Minister could also appoint Board members in addition to public nominations.

Mr L Mashile asked why the Department compiled regulations on the appointment of Board members. The Chairperson answered that that would be a matter for future discussion.

Clause 18(3)(a): Terms of office of members of Board
Mr Ntuli reported the clause was to avoid having permanent members of the Board. The Board had a term of three years and members were allowed to serve only two terms of three years each. The Chairperson could only serve one term. The following term he could be an ordinary member.

Chapter 5: Ports Regulator

Clause 30(1): Functions of Regulator
Mr Ntuli explained that Clause 30 defined the functions of the Regulator. The status of the Regulator was clarified. The Ports Authority's role differed completely to that of the Regulator, to the point of it being monitored by the Regulator.

Clause 30(2):
The Regulator would also monitor the relationship between Transnet and the Ports Authority. The reason for this proposal had been to avoid price collusion between Transnet and the Authority to the detriment of other operators.

The market structure referred to the manner in which ports would operate structurally, i.e. certain percentages would be reserved for national operators and certain percentages would be reserved for international operators. The market structure would be gazetted.

Mr A Anslie commented that certain powers deserved to be handled by the Minister.

The Chairperson replied that the Regulator would review prices and could intervene in consultation with the Minister.

Mr Ntuli made an example of a single service provider with no competition. That service provider could manipulate prices, and the Regulator could intervene in such situations by protecting those that had been using that service.

Mr D Scheenman (ANC) asked about the difference between tariffs and prices.

Mr Ntuli replied that tariffs were the traditional services provided by the Ports Authority, while the provision for powers to review pricing extends beyond the Authority to other service providers. The Port Regulator would also play the role of a mediator when there was a deadlock.

Clause 32(1): Nomination and appointment of members of Regulator
Mr Ntuli reported that this clause change was simply a change of heading.

Mr Mashile asked why did the amendment say "certain interest" instead of referring to "all interest". Mr Ntuli answered that the term referred to business interest

Clause 64(1): Special powers in emergency
The intention was to put emphasis on the role that would be played by the Minister in case of emergencies.

Clause 72(1)(a-b): Authority's tariff book
Mr Ntuli explained that the sub-clause referred to the powers of the Regulator over the Port Authority.

The Chairperson suggested that copies of the Bill had to be distributed to port forums, trade unions and certain parastatals. The deadline for submission would be 29 October 2004. The Committee should visit the Port of Cape Town on that day.

The meeting was adjourned