Tag Archive | Ports

Operation Phakisa to develop merchant shipping

Operation Phakisa: SA needs own merchant ships…

mapafrica&saCurrently, the cabinet is focused on Operation Phakisa, or South Africa’s exploitation of its oceanic resources, bearing in mind it has 6,000kms of coastline. In its budget vote presentation to Parliament, the department of transport (DoT) has indicated that it has every intention of not only building a South African maritime fleet but encouraging “Panama type” registration for vessels around the world.

Dramatically announcing that South Africa had to become “a maritime nation”, minister of transport, Dipuo Peters, said that a maritime delivery unit had been established within DoT to support the NDP’s key growth strategy for the development of the oceanic economy, launched earlier by the President in his SONA address as Operation Phakisa.

Focus on shipping world

MSC-Beatrice-PanamaCurrently she said DoT had introduced a new shipping tax regime for international shipping which exempts qualifying ship owners from paying income tax; capital gains tax; dividend tax; and withholding tax on interest for a number of years.

Minister Peters said, “We believe this tax exemption will undoubtedly encourage the South African ship register to be sought-after internationally and we are further engaging national treasury to consider a special tax regime for coastal and regional shipping.”

In June 2012, a department of DoT led by Tsietsi Mokhele of the SA Maritime Safety Authority, called for a policy framework to enable the establishment of both a coastal and a blue-water merchant fleet, following a meeting with the then NA Speaker, Max Sisulu, who had called for more information on where South Africa stood with regard to maritime affairs internationally.

All foreign vessels

Mokhele told Parliament’s transport portfolio committee that about 98 percent of South Africa’s total import and export trade was currently carried by foreign ships and currently South Africa does not have a single own-flagged commercial vessel on its shipping register.

He said at the time, “South Africa has no ships on its register and paid in 2007 about R37bn in maritimeSAFMARINE_CHAMBAL transport services to foreign owners and operators and had approximately 12,000 vessels visiting the country’s eight commercial ports each year”.

In the previous year (2011), 264 million tons of cargo were moved by sea at an estimated cost of R45bn to the country the committee heard and in the BRICS grouping, South Africa stood alone with no vessels, whilst Brazil operated a fleet of 172 merchant vessels, India 534, China 2044 and Russia 1891.

Not self-reliant

“We are almost 100 percent dependent on foreign shipping to get our goods to market, despite South Africa being a maritime country with over 3,000km of coastline and a vast seaward economic exclusion zone”, he said.

Mokhele told parliamentarians that the country’s sea-borne cargo constituted at that time a “significant” 3.5 % of global sea trade. “Yet all the benefits of shipping cost overheads to export destinations in the case of South Africa accrue to the nation from which the ship transport emanates”, he said.  He claimed that all South Africa’s maritime fleet had been “sold off by the apartheid government”.

Infrastructure is there

oil_tankerDuring this year’s budget vote speech, minister Peters said the facts were extraordinary and she confirmed that SA had a massive coastline positioned on sea trading routes with thee world’s largest bulk coal terminal port in Richards Bay; the busiest port in African Africa with the largest container facility in the Southern Africa; the deepest container terminal in Africa; Cape Town had the biggest refrigerated container facility in Africa and Saldhana Bay was the largest port in Africa by water footprint.

She added that South Africa is among the top fifteen countries that trade by sea with 96% of the country’s imports and exports moving by sea transportation yet the country had no merchant fleet of any kind.

Elements to Operation Phakisa

Minister Peters said that Operation Phakisa focused on three areas, namely, offshore oil and gas exploration; aquaculture; and marine protection services and oceans governance, the last named being run by the aforementioned SAMSA whose new maritime safety programme has a specific focus on ship safety inspection programmes which have resulted in “nil” reported ship losses in SA waters.

Working with treasury, minister Peters said that DoT had been able to increase the mortgage ranking for financial institutions supporting the maritime sector – particularly, those that finance actual vessel purchases. Also the Transnet Port Regulator in Durban had brought greater certainty to port regulations with a new framework on which the 2015/16 tariff would be based.

Plans starting

oil rigIt was now proposed to establish a National Ship Register for registration of vessels worldwide; work with the private sector to develop initiatives and support the local ship building, ship repairs and maritime skills development.

On matters of policy and legislative framework and Operation Phakisa generally, minister Peters said that DoT would finalise a national maritime transport policy; a policy towards the cabotage (the illegal hire of transport for passengers or goods between two destinations in the same country) and coastal and international waters law.

Small  beginnings

The budget of R392m had been set aside for all maritime related programmes and projects, the minister said which was approved.

In the meantime, the minister has tabled the Merchant Shipping Amendment Bill which carries out very necessary amendments to the Merchant Shipping Act of 1951 to bring it line with South Africa’s Constitution.

The Amendment Bill also gives effect to the Maritime Labour Convention and the Work in FishingCoega harbour equip Convention both Conventions being adopted by UN’s ILO. International Labour Organisation.”  This aligns domestic legislation to global instruments ensuring global protection to the rights of seafarers and decent working and living conditions thus enabling South Africa to intervene in cases where foreign ships enter SA ports have contravened the rights of seafarers.”

The adoption of this legislation, its promoters say, will improve the operations and image of SA’s emerging maritime industry and is also an imperative in international trade.
Other articles in this category or as background
http://parlyreportsa.co.za/energy/merchant-shipping-bills-on-oil-pollution-levies-approved/
http://parlyreportsa.co.za/energy/green-paper-nautical-limits/
http://parlyreportsa.co.za/uncategorized/search-and-rescue-bill-to-set-up-search-centres/
 

 

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Road and Rail South Africa

Minister comments on taxi and rail plans

Taxi recap slows, rail plans behind….

Transport minister, Dipuo Peters, told parliamentarians during the annual budget vote debate during a transport portfolio committee meeting that she had to re-look at the failing taxi recapitalisation programme; encourage Gauteng road users to pay e-tolls by announcing incentives; tackle urgently the upgrading of roads; and consider methods to restore freight rail transport as a the primary carrier for the Durban/Gauteng corridor.

The minister said that she recognised that the taxi industry played a critical role in the South African economy by providing 300,000 jobs and contributing an estimated,R40bn to the economy, she said.

Taxi industry must change

The need to modernise the taxi industry still remained as an urgent issue, she continued, and also there was a need to further deploy taxi drivers to other industries, including the bus rapid transit system, possibly aviation and to ports and shipping.

She attributed the slow pace of the recapitalisation programme to the fact that heavily indebted taxi operators chose to remain with old taxis rather enter the process of recapitalisation.   Also, the scrapping allowance had been overtaken by rising prices of new taxis. The entire system needed a priority overhaul, she said, since the safety of the South African passengers was at risk.

Later it became evident during debate that the taxi recapitalisation programme had for all intents and purposes stalled, since only 2,752 vehicles had been scrapped in some eighteen months.

E-toll dispensations

On the subject of e-tolls, Minister Peters said that in order to “make things easier” for the public, DoT was providing an extension of the payment period from seven days to fifty one days; a 48% e-tag-holder discount; 60% discount on the alternative tariff if a non registered user paid within the same 51 days; time-of-day discounts applicable in certain cases; frequent user discounts and a cap on class A2/light vehicles

The minister was asked if SANRAL intended to continue its “prosecution and possibly criminalisation of some one-million people who have not paid their e-toll bills”. She replied that she hoped the new arrangements would assist in reducing the financial burden for motorists. She urged Gauteng users of tolled roads to “accept their responsibilities in the interests of better roads for South Africa if SANRAL were to perform their duties and meet their targets.”

She asked MPs to take the lead and say publicly that they were.

How it works

The total DoT budget was R48.7bn. for 2014/15, rising to R53.9bn. in 2015/16. This amount included allocations to provinces, municipalities, state owned companies and agencies. Road transport received 43.7%, rail transport had 34.9% and public transport 21%, whilst civil aviation and maritime each received 0.4%. DoT was responsible for transfer of payments and conditional grants to provinces and municipalities.

On the issue of road conditions nationally, DOT heads stated that only 10% of roads were in “poor” condition and the department indicated that it would provide R21.9bn in critical support to SANRAL who were the roads delivery agent for DoT.

Metrorail must improve

On rail issues and rail transport, Mawethu Vilana, acting DG for DoT, said passenger rail accounted for a large slice of the commuter transport used by the national work force, R15bn being allocated to the railways accordingly.    He said DoT was trying to reduce the cost and to improve the services of Metrorail, as well as accelerate implementation of integrating rail services with other transport services.   A White Paper would be issued on rail integration issues.

This was enlarged upon by Mathabatha Mokonyama, DG of public transport, who said the focus was on accelerating integrated transport systems “so as to improve its overall productivity” and DoT would to allocate R81m to the integration process, expected to increase to R84m in 2015/16 and again to R89m in 2016/17.

Mokonyama reconfirmed that whilst rail transport played a major role, DoT had to focus on reducing the cost of public transport generally and it would also monitor the progress of the Passenger Rail Agency in its objective to restore to the country national rail passenger systems.

Focus must be on freight

He indicated that rail freight transport had to play a larger role in order to compete with road, particularly the Durban/Gauteng corridor and to service industry in Mpumalanga.

Mokonyama again pointed to the new draft updated White Paper on Transport which was on its way as a framework for public discussion. DoT would also update the Moving South Africa plan and the seven-year old rural transport strategy. This new planning called for further updated legislation.

Minister Peters, in conclusion, conceded under questioning that DoT urgently needed to update scholar transport policies and re-introduce urgency to programmes to reduce road fatalities.

Where is the merchant navy

In an odd ending to the debate, when discussing the budget vote on maritime issues, it was said by the DoT maritime services DG that there was a need to establish a maritime shipping sector. The chair promptly asked, “What has happened to the country’s ships?”

The deputy minister of transport, Sindisiwe Chikunga, replied “All our ships were sold on the eve of democracy to make sure that the current government did not participate in the international shipping industry”.

This position was to be reversed, she concluded.

Other articles in this category or as background
http://parlyreportsa.co.za//finance-economic/prasa-says-upgrade-of-rail-transport-will-involve-local-industry/
http://parlyreportsa.co.za//finance-economic/bumpy-road-for-e-tolling-bill-continues/
http://parlyreportsa.co.za//uncategorized/transnet-says-freight-rail-operations-coming-right/
http://parlyreportsa.co.za//energy/transport-subsidies-to-business-are-wrong-says-parliament/

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New Customs Duty Bill opposed by BUSA

SARS customs duty bill to close inland ports…

portsharboursThe newly tabled  Customs Duty Bill, with its two enabling Bills, were the subject of  vehement objections from Johannesburg Chamber of Commerce (JCCI) and Business Unity SA (BUSA), who both led the charge against the SARS proposals tabled by National Treasury.

This was in the  in the form of the vehement objections to the Customs Duty Bill, the Customs and Excise Amendment Bill and the Customs Control Bill, which propose that the principle of inland ports be scrapped and all clearances for imported goods be conducted at SA coastal locations.

Nevertheless, the Bills were eventually passed before the present government ended after an extended session of the NCOP to provide concurrence.

JCCI said that this would not only upset SADC and sub-Saharan  importers but also cause unintended consequences such as the “death of such inland ports as City Deep in Johannesburg” aside from inconveniencing local importers generally.

They said that many importers having now to be responsible for the movement of goods up the Durban/Johannesburg corridor would switch from rail to road freight to complete the import journey, thus placing further strain on Durban /Johannesburg road systems.

Transnet to become nonviable

Such unintended consequences , it was felt by JCCI, whilst of no consequence to SARS who were obviously only interested in the current losses of tax revenues by evasion, illegal imports  and corruption would result in serious strain for existing importers and make Transnet targets impossible.

Also, they said in their submission, the moves would cause further congestions at coastal ports and that the SARS proposals were in conflict with normal practices allowed for by the WTO.

Currently, JCCI told parliamentarians, only 20% of imports were being received through the Durban/Johannesburg corridor destined for movement by Transnet, who were in the process of spending enormous sums of money on infrastructure and rolling stock to change this imbalance. Now was not the time to encourage more road freight, they said.

BUSA weighs in

BUSA said that such radical changes of insisting that the three day customs clearance required by importers at port of entry, if construed as coastal only, was an unacceptable arrangement and although two alternative options were offered by SARS, neither had been found to be acceptable.

It was the wrong time to make such changes, said BUSA, and SARS should re-consider its approach and new ways found to reduce their losses of revenue in duty.

Also BUSA complained of the high penalties proposed for late clearances of goods if the proposed three day notice was not met and that new approaches should be considered generally that incorporated and embraced the concepts declared by the minister of trade and industry who has stated he wants to increase South Africa’s sub-Saharan business.

The concept of removing City Deep as a customs clearance point was akin to changing a practice that had existed for 37 years, JCCI noted.

SARS unmoved by the arguments presented.

(SARS responses to these submissions is in a later story on this website)

Earlier articles on this subject:
http://parlyreportsa.co.za//energy/fueloilrenewables/illegal-diesel-coming-in-from-mozambique/
http://parlyreportsa.co.za//finance-economic/one-stop-border-post-with-mozambique-almost-there/

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Transport dept moots idea of SA maritime fleet

In a document tabled before Parliament, the CEO of the SA Maritime Safety Authority (Samsa), Tsietsi Mokhele, called for a policy framework to enable the establishment of both a coastal and a blue-water merchant fleet.

The meeting with Samsa followed a request by National Assembly Speaker Max Sisulu who called for more information on where South Africa stood with regard to maritime affairs internationally.

Mokhele told Parliament’s transport portfolio committee that about 98 percent of South Africa’s total import and export trade was currently carried by foreign ships and currently South Africa does not have a single own-flagged commercial vessel on its shipping register,

“South Africa has no ships on its register and paid in 2007 about R37 billion in maritime transport services to foreign owners and operators and had approximately 12,000 vessels visiting the country’s eight commercial ports each year”, he said.

Some 264 million tons are moved by sea at an estimated cost of R45bn to the country, the committee heard, and in the BRICS group South Africa stood alone with no vessels whilst Brazil operated a fleet of 172 merchant vessels, India 534, China 2044 and Russia 1891.

“We are almost 100 percent dependent on foreign shipping to get our goods to market, despite South Africa being a maritime country, with over 3000km of coastline and a vast seaward economic exclusion zone.”

Mokhele told parliamentarians that the country’s sea-borne cargo constituted a “significant” 3.5 percent of global sea trade. “Yet all the benefits of shipping cost overheads to export destinations in the case of South Africa accrue to the nation from which the ship transport emanates “, he said.

Posted in Finance, economic, Labour, Public utilities, Trade & Industry, Transport0 Comments


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