The Southern African Association of Freight Forwarders (SAAFF), whose members manage more than 80% of SA’s international trade, said the tariff application by the Transnet National Ports Authority (TNPA) for the next three years would not only hurt the industry but the economy as well.
The TNPA has asked the Ports Regulator of SA for a tariff increase of 7.9% in the 2025/26 financial year, 18.61% the following year and 2.52% in the third year. This comes as the authority seeks revenues of R15.6bn in 2025/26, R18.3bn in 2026/27 and R19.4bn in 2027/28.
The TNPA in its application said its capital expenditure (capex) was informed by its capital investment programme. It projects to spend R3.3bn in capex in 2025/26 and to have operational expenditure (opex) of R6.8bn.
The authority, which occupies a strategic position in the country’s transport logistics chain, expects to spend R5.4bn in capex in 2026/27, alongside opex of R7.5bn. It projects capex of R5.3bn in 2027/28 and opex of R7.8bn.
TNPA manages eight of SA’s commercial seaports: Saldanha, Cape Town, Mossel Bay, Port Elizabeth, Ngqura, East London, Durban and Richards Bay.
SAAFF said the application made by TNPA over the three future financial years was “so high as to warrant specific comments on the probable impact not only on port users but the entire economy should the regulator approve”.
It said that in the past, the regulator consistently indicated that any approved increase must be within the range of the consumer price index (CPI)/producer price index.
“The application indicates the CPI used for WAAC [weighted average cost of capital] calculation is 4.57% for 2025/26. The average indicated increase over the three years in this application would be more than double that at 10.39% and at 7.9% across the board for 2025/26 — 79% higher than the current rate of CPI,” SAAFF said.
“It must be apparent to the authority that the SA Reserve Bank, whose mandate comes directly from the constitution, has an inflation target of between 3% and 6%, with the monetary policy committee favouring a mid-level target of 4.5%. This target was reached in August 2024 at 4.4%.
“The authority is doubtless aware of the impact ports, and particularly port costs, have on the bulk of our country’s global trade, economic development and employment growth. We question why it did not prepare this submission considering the consequences tariff increases in excess of CPI have on efforts to bring inflation to and below target.”
The World Bank has ranked SA’s ports as some of the worst-performing in the world. Two of the busiest ports, Durban and Cape Town, have been ranked in the bottom 10 of the worst-performing ports in the world, with the latter the lowest of the 405 surveyed by the World Bank.
The World Bank’s container port performance index assesses efficiency, focusing on the duration of port stay for container vessels. The results show that SA’s ports are all rooted at the bottom, measured by their 2023 performance.
The Durban port is at 398, while the Ngqura (Coega) port is ranked 404, underlining the challenges facing Transnet in improving performance. The Gqeberha port ranks at 390. The country’s ports have been marred by inefficacies and congestions, costing the economy billions of rand.
TPNA in its application said its proposals were prepared on the basis of it soon becoming an independent subsidiary of Transnet.
This follows the pronouncement by President Cyril Ramaphosa in 2021 to establish it as an independent subsidiary of Transnet, and National Treasury’s condition that it completes the process by April 2025 — following its R47bn bailout of Transnet a year ago.
TNPA said the revenue it generated was used to maintain basic port infrastructure, provide future port infrastructure, and maintain and provide current and future ship repair facilities.
“To deliver on the DES [desired end state] and the authority’s mandate, significant capital expenditure will be required in the short to medium term. Per the regulator-approved tariff methodology, the resultant tariff adjustment for 2025/26 is 7.9%. Accordingly, the indicative tariff adjustments for 2026/27 and 2027/28 are 18.61% and 2.52%, respectively.”
The TNPA has also proposed differentiated tariff adjustments for approval by the regulator. They include a 14.19% increase for marine lines, and 4.57% for container imports and exports, which it says is supported by the planned capex of more than R3bn over the next five years to create new capacity for containers.
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