Transnet CEO Brian Molefe said on Wednesday (06/03/2013) he expects the mining sector to object to plans to hike cargo tariffs on dry bulk by more than two-thirds and reduce those on manufactured goods by almost half.
However, Molefe said the proposed tariff restructuring was imperative to encourage beneficiation and bring Transnet’s pricing strategy in line with the government’s economic policy and the National Development Plan.
Under the plan, tariffs on manufactured goods will go down by 47 percent and those on dry bulk will go up by 68 percent.
"We expect them to complain. They will make those comments to the regulator,” Molefe said on the sidelines of a meeting of Parliament’s portfolio committee on trade and industry.
He said the mining sector had been "hugely subsidised” by a tariff structure weighted in favour of raw exports, at the expense of the manufacturing and agricultural sectors.
Transnet’s tariff application for 2013/14 also proposes imposing a minimum export cargo tariff of R6 a ton on all dry bulk and break bulk shipments.
Tau Morwe, the chief executive of Transnet National Ports Authority, said this would double the price of sending iron ore from Sishen to Saldanha.
Molefe said: "We send away our own God-given iron ore and then we have unemployment, but we can’t process anything with our own hands.” Riad Khan, the CEO of the Ports Regulator of SA, said the deadline for comments on the application was May 31, and a decision could be expected ”a month or two” later.
Trade and Industry director general Lionel October welcomed the planned tariff restructuring as "real progress”, and said it was the result of years of talks between the department and Transnet.
”Restructuring is necessary because our economy has been subsidising the mining sector regarding below-cost transport.” He said the planned reductions for agricultural goods would prove a relief to food-growers, who had told the department it was not worth their while to export goods to Europe.
"This will cut their costs by practically half. It is a huge incentive.” - Sapa