1 / 27

Annual Report Select Committee on Economic and Business Development

Read about the achievements and goals of the Ports Regulator of South Africa in their Annual Performance Review for the year 2016/17. Learn about their efforts in reducing business costs, promoting equity of access, and supporting the development of the ports industry.

wneal
Download Presentation

Annual Report Select Committee on Economic and Business Development

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Annual Report Select Committee on Economic and Business Development 14 November 2017 NCOP Cape Town

  2. Vision and Mission Vision The Ports Regulator of South Africa will be regarded nationally and internationally as a world-class institution which sets the standards for economic regulation in commercial maritime ports. Mission- relates directly to the objectives of the PRSA • Exercise economic regulation of the South African ports system consistent with Government’s strategic objectives; • Support the development of the ports industry and system; • Promote equity of access to ports and to facilities and services provided in ports; and • Monitor the activities of the National Ports Authority to ensure that it performs its functions in accordance with the National Ports Act, 12 of 2005 www.portsregulator.org

  3. Synopsis • The Ports Regulator (PRSA / the Regulator) aims to reduce the cost of doing business with South Africa (SA), as well as to reduce the cost of exporting SA manufactured products to the world, through a fair and well-structured tariff. • 2016/17 saw the publication of the Regulator’s second multi-year Tariff Methodology. The tariff process continued its open and public approach, conducting public hearings for both the Tariff Methodology as well as the Tariff Determination around South Africa at key centres. • Delivery targets have been met or exceeded in the past year and the Regulator achieved a “Clean Audit” for the third time, improving on its consistent “unqualified audit” status in previous years. • In the years ahead, the Regulator intends to expand its role in the transformation and B-BBEE participation of the sector whilst continuing its analytical and compliance work, with the aim of enhancing its capacity. www.portsregulator.org

  4. Annual Performance Review 2016/17 www.portsregulator.org

  5. Annual Performance Review 2016/17 www.portsregulator.org

  6. Annual Performance Review 2016/17 www.portsregulator.org

  7. Annual Performance Review 2016/17 www.portsregulator.org

  8. Annual Performance Review 2016/17 www.portsregulator.org

  9. Annual Performance Review 2016/17 www.portsregulator.org

  10. Annual Performance Review 2016/17 www.portsregulator.org

  11. Annual Performance Review 2016/17 www.portsregulator.org

  12. Annual Performance Summary: 2016/17 www.portsregulator.org

  13. Summary of Achievements: 2016/17 ORGANISATIONAL & FINANCIAL • Filling of vacant posts – HR, Industry Development, Economic Regulation and 2 interns • Achieved a “Clean Audit” from the AG for 2016/17 for the 3rd time consecutively since the organisation was established. • Exceeded the BBBEE Procurement target - 89.63% of the total procurement was from BBBEE as per framework. • Achieved 100% of all Annual Performance Plan targets by end of financial year • Training for staff members on regulatory as well as statutory training on SCM and other courses GOVERNANCE, LEGAL & TRIBUNAL • Oversight of litigation in respect of Tribunal decisions taken on Review. Together with one matter partly heard with interim order issued; • BBBEE reporting format amended and provided to the NPA to report in terms thereof, resulting in a more accurate reflection of transformation in the port sector; and • Compliance monitoring reports for all ports completed and validated; • First Section 30(5) Report issued. • Ensured governance stability in terms of quarterly reporting and governance training implemented • Legal advice to Minister regarding two section 79 requests. • Achieved high degree of Regulator Member training – Judicial, Governance as well as Regulatory training. www.portsregulator.org

  14. Summary of Achievements: 2016/17 INDUSTRY DEVELOPMENT • Industry / stakeholder feedback surveys indicate an overall average score of 80% for the Regulator with respect to neutrality, independence, efficiency and effectiveness and acceptance of the Regulator’s decisions. • Attendance of PCC’s and NPCC and 4 observation reports submitted to the DoT highlighting effectiveness of respective PCC meetings in addressing issues raised by port users, including areas for strengthening oversight on the Authority. • Facilitated consultations on Port Tariff Incentive Program with government departments. • New methodology (DEA) for developing efficiency frontier and determining efficiency of SA terminals against a sample of other ports implemented - Ports of Rotterdam(Netherlands(, Shanghai (China), Brisbane (Australia), Charleston (USA), Dar es Salam (Tanzania) and Mombasa (Kenya) feature as effiecient, whilst Ports of Said (Egypt), Tangiers (Morocco) and Louis (Mauritius) are peer ports for SA terminals (similar resourcing). www.portsregulator.org

  15. Port user’s feedback on the PRSA (from public consultation roadshows) www.portsregulator.org

  16. Summary of Achievements: 2016/17 ECONOMIC REGULATION • 2nd multi-year Tariff Methodology for the South African Port System published including a performance component (WEGO) • 2016/17 tariff determination for NPA completed, approved and ROD on published 1 December 2016 • 5.97% average tariff change for 2017/18 - below inflation • 5th Annual Global Ports Pricing Comparator Study published • Port Tariff Incentive Programme (PTIP) consulted and published for comment • Asset valuation – sample of NPA assets – first phase of the project completed – work has started on the development of an Asset Valuation Methodology www.portsregulator.org

  17. External Impact of the PRSA in 2016/17 Strong Industry Support through Tariff Decision • 5.97% average tariff change, Below inflation, in support of SA competitiveness within deteriorating economic climate-following a 0% ave. tariff previous year • Beneficiation support: Increased export support for fully beneficiated goods in containers (export Cargo Dues for containers 70% lower than import containers. (i.e. R 2 880 less for a 40 ftexport container) • Incentive for ships registered in South Africa continues (30% discount on marine tariffs for ships registered in 2016/17, 20% in 2017/18 and 10% in 2018/19) ROD published targeted 10 year tariffs (base rates) – transparency allows stability and long term industry planning • Quantifying cross-subsidies in port • system (to be corrected over 10 years) • Allowing targeted industrial support • World first – Tariff Strategy approach New Tariff Methodology published • Port developmental focus with inclusion of Efficiency incentive (WEGO) www.portsregulator.org

  18. Keeping tariff increases below inflation, but ensuring increasing revenue for port sustainability The right Tariff Methodology allows the Regulator to ensure price stability and system sustainability… www.portsregulator.org

  19. www.portsregulator.org

  20. Financial Management Budget, Expenditure and General

  21. 2016/17 Revenue & Expenditure www.portsregulator.org

  22. MTEF Budget (2016/17 -2019/20) www.portsregulator.org

  23. B-BBEE, Woman and Youth Empowerment • The Regulator met its B-BBEE target of 75% discretionary expenditure required from suppliers with a B-BBEE rating of 2 for 2016/2017. • 89.63% of the total procurement was from BBBEE as per the framework. • The Regulator has not yet developed programmes that are directly aimed at youth, supplier, and women empowerment due to funding constraints. • It must be noted as well that the tariff determinations that are made are aimed at making the port tariffs as competitive as possible and increase accessibility to new entrants to the industry as one of the entity values. • It must be noted that in terms of B-BBEE targets, women and youth empowerment are some of the factors that are taken into account when evaluating bids and quotes for procurement of goods and services. • PRSA employees a total of twelve women of a total employee count of nineteen (63% women).

  24. Bursaries, Scholarships and Internships • The Ports Regulator did not award any scholarships and/or bursaries for the 2016/17 financial year. • The Regulator has provided internship opportunities to two graduates appointed effective 01 March 2017. • The limited budget is contributing factor as to why no bursaries have been awarded to individuals outside of the organisation. • Two appointments will be made towards the end of 2017/18 for the Economic Regulation and Industry Development department to strengthen the departments as the Regulator’s Strategy requires a lot more output from these departments. However, more funding is required in order to capacitate other departments.

  25. Challenges • R6m drop in budget between last year and the current year (over 20% drop) • Additional baseline funding is required to employ more staff and capacitate the Regulator, as once off additions can’t be committed for recurrent expenditure items. Current funding is not sufficient to complete the organogram to fully discharge the mandate. Two key executive level posts are unfunded in Economic Regulation and Industry Development. • Despite limited staff capacity as a result of low budget, the Regulator has done its best, however the minimal employees (2-3) in each department may result in possibledelays to future Regulator programmes and the implementation thereof ,or the risk of an unreliable service to its stakeholders. • Amendments to the Act are required in order to give the Regulator increased powers and resources in order to honour its mandate through the proposed funding model which will reduce fiscal reliance and reliance on the DOT budget. • Legal reviews/challenges to the Regulator require a larger financial reserve set-aside in order to buffer against large legal costs (in relation to its small budget). • Resignation of Members - We would appreciate additional Regulator Members (within the legal profession) that could assist in eliminating tribunal backlogs – commensurate support budget also required to offset greater costs. • Tenure of the current Regulator members will expire on 31 August 2018 - propose that DoT start the process early to ensure that governance is not affected.

  26. Conclusion Many important initiatives are being undertaken, such as: • the development of the Port Tariff Incentive Program (PTIP); • the development of a Regulatory Asset Valuation Methodology ; • the Implementation of an operational efficiency incentive as part of the tariff setting process (The Weighted Efficiency Gains from Operations (WEGO)) In the years ahead the Regulator intends to expand its role in: • transformation and B-BBEE participation of the sector; • the analysis of lease and rental pricing in ports, • greater scrutiny and prudency assessment of capital investments, • the development of an Asset Valuation Methodology, arising out of the valuation of a sample of NPA assets. All these issues will be attended to whilst we still continue with our other ongoing analytical, tribunal and compliance work. We hope to be able to enhance the capacity of the Regulator as required by the NDP for all economic regulators, fill key unfunded posts and strive to retain the skills we have assembled as greater financial resources become available. www.portsregulator.org

  27. THANK YOU

More Related