1. Department of Transport
NATIONAL PORTS BILL
NCOP
10 MARCH 2005

2. Outline of presentation
BACKGROUND
CONTEXT:
CORPORATIZATION OF NPA
INDEPENDENT PORTS REGULATOR
REVISED NATIONAL PORTS BILL
ROLE OF THE REGULATOR VS THE NPA
THE CREATION OF FLEXIBILITY IN THE REVISED BILL
RESOLVED ISSUES IN THE
NATIONAL PORTS BILL AS
RAISED AT NCOP ON
2 MARCH 2005

3. BACKGROUND
The White Paper on Commercial Ports Policy was drafted in the light of government trying to achieve the following:
Increase investments
Improve efficiencies
Introduce competition
The NPA Bill sought to pave the way for introducing competition in certain port operational areas.

4. CONTEXT Current situation: NPA Bill: First Tabling
NPA, as a subsidiary of Transnet is both landlord and regulator – gives rise to inherent conflict between the two roles
Transnet’s balance sheet reflects the cross subsidization of port revenues for other Transnet business not relating to ports
NPA Bill: First Tabling
Sought to achieve the introduction of the Independent Ports Regulator, with the main function of regulating the relationship between Transnet and NPA
To corporatize the NPA out of Transnet within a specified period

5. CONTEXT – continued…
First version of the Bill – mandatory clauses to corporatize the NPA out of Transnet.
Revised Bill allows flexibility for coporatization and the forming of a public company outside of Transnet, as they are no longer mandatory at this point in time
In the event of NPA corporatizing:
Next Step for NPA: To corporatize while still remaining within the Transnet stable = National Ports Authority (Pty) Ltd
End State: Shareholding Minister may take the necessary steps to convert the (Pty) Ltd company into a limited company outside of Transnet
Government’s position – does not want to constrain itself in establishing a transport sector regulator and therefore wishes to remain flexible on the corporatization route.

6. CURRENT STATUS OF REVISED BILL
Corporatization of NPA:
To take place as follows:
Within Transnet as a (Pty) Ltd company
As a public company outside of Transnet
The position of the regulator thus had to be strengthened in order to accommodate the corparatisation of the NPA within Transnet.
Revised Bill therefore allows for a greater flexibility as the requirement to form a public company outside of Transnet.

7. FUNCTIONS OF THE REGULATOR
The main functions of the Regulator are to:
Exercise economic regulation of the ports system in line with government’s strategic objectives
Promote equity of access to ports and to facilities and services provided in ports
Monitor the activities of the Authority to ensure that it performs its functions as prescribed by the Act
The Regulator is responsible to:
Hear complaints and appeals, investigate on such complaints
Negotiate and conclude an agreement with the Competitions Commission in order to harmonize jurisdiction over competition matters

8. FUNCTIONS OF THE REGULATOR VS
FUNCTIONS OF NPA
Current regulatory framework as contained in the Bill is sufficient and there are no duplications of powers eg. Tariffs will be considered by the regulator as proposed by the NPA
Current regulatory functions of the NPA will cease once the port regulator has been established. Former will set the parameters.

9. FACTORS CONSIDERED FOR ALLOWING FLEXIBILITY IN REVISED BILL
Backlog in infrastructure investments
To minimize potential monopolistic behaviour
Grow the ports sector in light of the growth in import and export markets
Government recognizes and appreciates the present status of Transnet’s balance sheet, but these challenges cannot disappear within a short space of time
Socio-economic developmental aspects of ports

10. RESOLVED ISSUES IN REVISED BILL
Triple Regulation
Complimentary regulatory framework is proposed for Port Regulator; NPA and Competitions Commission.
All three institutions have unique and specific areas of regulation.
Maydon Wharf
The revised Bill has restructured land-use and non-market related rentals and has general application as opposed to the initial Bill. The Bill is now in line with the constitution
Licensing Off Shore Cargo Handling Facilities
The revised Bill gives recognition to existing licenses for off shore cargo handling facilities. It provides that all future licenses must be sanctioned by the NPA

11. Department of Transport
Thank you