Tag Archive | transnet freight

Economic Regulation of Transport Bill plans for future


 

…….article 15 July……

Its all about regulating prices, says govt….

The Economic Regulation of Transport Bill, now in final process in Parliament, represents the complex task of bringing together a multitude of factors governing the regulation of the transport in South Africa within one framework, intended to deliver “a transport system enabling economic activity and the stimulation of growth”.  The objective is lower the cost of doing business by the regulation of pricing, says government.

In one of the better Bills to come before Parliament in 2020,  the Bill proposes to empower a Transport Economic Regulator as the functionary authorised to sign off on the prices imposed by regulated transport entities in the sector.  The Bill is the result of two periods of public comment in 2018.

 Order in chaos

A portion of 2019 was used by the Department of Transport (DoT) to digest all the information and come up with a final answer to a complex situation since public comment from stakeholders was extensive.   M

any of the issues, as emerged during the debate in Parliament, have always been about Sou

th Africa’s poor record in port handling facilities; entry and export and other border nightmares; Transnet’s rail turn-around problems; and the country’s prohibitive road transport pricing matters.

Recognising this, the Bill has as an objective to rationalise of transport pricing but in order to do this, DoT has to first consolidate all the working parts into a single framework and policy.

Not just rubber stamping

To take a step back, in order to execute the new plan, the establishment of a Transport Economic Regulator is called for as the working body and, secondly, Transnet must establish a Transport Economic Council which will act as arbiter for decisions made.  This has been achieved but not ratified. There also has to be “a mutual consideration between the many stakeholders to make things work”, DoT says.

Good news is that as part of the process Transnet is about to appoint a Corruption Investigation Officer whose work, no doubt, will be cut out.  What has been achieved in this regard was the subject of a recent parliamentary report, but SOEs about to be drawn into the body of the Regulator will be the Transnet National Ports Authority; Transnet Port Terminals; Transnet Freight Rail; ACSA; Air Traffic and Navigation Services; PRASA and SANRAL plus its concessionaires.

Such a big bite worried MPs in the first transport parliamentary committee meeting as much as it did private sector comment sector beforehand, i.e. the idea of establishing a national entity for all forms of transport i.e. road, rail, air and maritime all in one go. MPs  suggested that the Regulator be allowed to take on one area of endeavour at a time.

Even a bigger bite will be that eventually, the proposed Bill includes the concept of regulation within the taxi industry, it was noted from the meeting from the comments made by DoT representatives in their time slots.

Price determination

The body of the Bill provides that the Regulator will consult with interested parties and the public when considering the pricing proposal of a regulated entity and whether it is fair and reasonable. Subsequently if agreed to, a consent order will be published in the government gazette taking effect on the date set.

On the whole question of the roads on which transport survives for its existence, since the Regulator would be a “Chapter 9 institution outside the public service and its independence subject only to the Constitution”, it therefore can be the functionary authorised to sign off on the prices it decides upon.  Important was the fact that should issues arise, the Economic Regulation of Transport Bill as proposed would trump the SANRAL Act.

Up to date

As a Section 76 Bill, the Transport Economic Regulator Bill will now have to be passed through the NCOP to all nine provinces for comment and mandates.

 

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


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