Ports Restructuring: Transport Department briefing

Meeting report

PUBLIC SERVICE SELECT COMMITTEE
25 October 2005
PORTS RESTRUCTURING: TRANSPORT DEPARTMENT BRIEFING

Chairperson: Mr R Tau (ANC)

Documents handed out:
Department Ports Policy
Department briefing on Ports Restructuring
[please email [email protected] for the documents]

SUMMAR
The Committee heard a progress update from the Department of Transport on ports restructuring, as guided by the National Ports Act 12 of 2005. Members were concerned about the delays in the finalisation of the regulations. The Committee had felt excluded in the appointment of the Board. Some Members felt that it was inappropriate to have the offices of the Ports Regulator in Johannesburg. They wanted to know the kind of economic spin-offs that would benefit the previously disadvantaged.

MINUTES

Department briefing
Advocate N Sobekwa, Chief Director, Maritime Transport Regulation, briefed the Committee on ports restructuring. She focussed on the National Ports Act 12 of 2005, the progress in setting up an Independent Ports Regulator, and the relevant timeframes for the way forward. There would be interviews of potential Boardmembers in January 2006, and appointment of the Board by February 2006. Full promulgation of the Act would occur in February 2006.

Discussion
Mr L van Rooyen (ANC) wanted to know when the regulations would be finalised, and whether the Committee would be given a chance to scrutinise the Regulator. The Committee could not understand why the Department could not find expertise to compile the Act. He asked the reasons for situating the Regulator’s office in Johannesburg rather than Cape Town. He felt that Committee should play a role in selecting the Board. The site visit to look at the suitability of selected buildings had been a waste of resources.

Adv Sobekwa replied that the process had taken so long because ‘headhunting’ was a time-consuming process. The regulations would be finalised after the tendering process. The Department bidding committee should speed up the process. The Select Committee on Public Services would give input into the selection of the Board. There were experts who could draw up the regulations, but the problem was with the exorbitant fees charged by the law firms that specialised in maritime law. Johannesburg had been chosen because it was perceived as ‘neutral’, unlike the ports that would end up competing. The logistics department had had to conduct site visits before they chose a suitable building and look at security issues. The regulations would be finalised on 28 February 2006. The unit that dealt with administration and logistics would conduct the site visits because it would be unwise to take any building without looking at its suitability. They would inspect up to three sites.

Rev Moatshe (ANC) reiterated Mr Van Rooyen's concerns about the location the Ports Regulator, and asked for clarity on the finalisation of the Board. He wanted to know how the Ports Regulator would improve the economy. Who would do the drafting if the law firms were charging such high prices? He emphasised that the Committee had to play a role in the selection of the Board.

Adv Sobekwa was not sure about the role of the Committee in the selection of the Board but the Department would be guided by the Act in this respect. She invited Members to make recommendations on the issue. The Regulator would be handling competition cases and monopolies. The new entrants to the industry would be stimulating more jobs, thereby stimulating the economy.

Mr S Zamxaka, Department Director: Parliamentary Services and Stakeholder Management, replied that the role of the Department would be to facilitate while the Minister would nominate the Boardmembers.

The Chairperson could not envisage a situation that would exclude the participation of the Committee in the process of nominating the Board. He felt that the Committee has an important role. Adv. Sobekwa said that she would relay that position to the Minister.

Rev Moatshe asked why the tendering process had not been opened up in the first instance.

Adv Sobekwa replied that the Department human resources department was allowed to hire people on contract. The firms interviewed charged exorbitant prices, and quotations were beyond the budget allocated for that purpose. It was difficult find people with maritime and legal background. The Department had decided to go the tendering route, but it was a time-consuming process.

The Chairperson understood the urgency behind the establishment of the Regulator. With regard to the role of the Act in the ‘Second Economy’, he felt that the monopolies would share the spoils with sections of the population that were previously excluded from the sector.

Mr S Zamxaka replied that there were various programmes such as Maritime Black Economic Empowerment, freight and forwarding, logistics and aviation services. The National Flight and Logistics Strategy had been set up to lower the costs within the industry. The proposed process would be taken to Cabinet for approval. The ports would have to reduce the costs of doing business to allow new entrants. The Act had been set up specifically to create an ‘enabling environment’. The Department would make sure that interested parties were aware of the opportunities and benefits that would accrue from the process.

Adv. Sobekwa said the Regulator could not stimulate economic growth unless the Ship Registration Act was improved. All ships flying the South African flag would be safe and secure.

Mr Van Rooyen pointed out that Johannesburg was an ‘inland port’ because goods were "shipped" directly to City Deep, but the city was still not a suitable place. Rev Moatshe said the decision for selecting Johannesburg could still be turned around.

Adv. Sobekwa said the Department would be willing to listen to any suggestion from the Committee.

Mr Van Rooyen (ANC) was satisfied that the Department was dealing with ship registration. South African companies such as Safmarine did not register their ships in South Africa, as did Unicorn Shipping Lines.

Adv. Sobekwa said the Department had not received complaints regarding ship clearances, and she looked at the number of ships cleared every day. Sometimes one or two were not cleared because of the inadequate information supplied by the ship personnel.

The Chairperson said some of the questions asked by Members were beyond the mandate of Adv. Sobekwa. The Committee appreciated that the Department was working very hard.

Rev Moatshe said that the Department could not afford to waste time. The urgency of the situation needed to be taken into consideration.

The meeting was adjourned.