• Don't commit legacide

    Common but false legacy business ideas could be slient killers of innovation, says Ian Mann.

  • A special kind of coup

    Scared or compromised ANC leaders seem ready for collective suicide, says Solly Moeng.

  • Excuses, excuses...

    ‘White monopoly capital' is just a ploy to avoid SA’s real problems, say two analysts.

All data is delayed
See More

No fleet costing SA billions

May 08 2012 18:15
Parliament - While its Brics partners strive to expand their already considerable merchant fleets, South Africa does not have a single own-flagged commercial vessel on its shipping register, MPs heard on Tuesday.

"South Africa has no ships on its register, and pays R37bn a year [2007 figures] in maritime transport services to foreign owners and operators," SA Maritime Safety Authority (Samsa) CEO Tsietsi Mokhele told Parliament's transport portfolio committee.

This was the cost of moving 180 millions tons of freight into and out of the country at that time.

Mokhele later said the most recent (2011) figure was about 264 million tons, moved at an estimated cost of R45bn.

Committee members heard that Brazil operated a fleet of 172 merchant vessels; Russia, 1891 vessels; India, 534 vessels; and that China had 2044 merchant ships. Brazil, Russia, India, China and South Africa make up the BRICS group of countries.

In a document tabled at the briefing, Mokhele called for a policy framework to enable the establishment of both a coastal and a blue-water (high seas) merchant fleet.

About 98 percent of South Africa's total import and export trade, by volume, was currently carried by foreign ships. Up to 12,000 vessels visited the country's eight commercial ports each year.

"We are almost 100 percent dependent on foreign shipping to get our goods to market."

Yet, South Africa was a maritime country, with over 3000km of coastline and a vast seaward economic exclusion zone (EEZ), which was set to expand to 3.5 million square kilometres once continental shelf claims were internationally settled.

The country's sea-borne cargo constituted a "significant" 3.5% of global sea trade.

"All our BRICS partners are regional maritime powers, with vast maritime interests and capabilities in sea trade, commerce and naval influence."

Mokhele also questioned the commercial terms under which South African companies exported their products.

Many products shipped out of the country "free on board", which meant the point of sale for the product was the port through which it was exported.

But, most commodity-exporting nations used a CIF (cost, insurance and freight) system, which included all transportation.

"All the benefits of [moving the product] from here to there [the export destination] accrue to the nation that nominates the transport," he said.

Transport in economics was part of the industrial production cost, but South Africa had been "cut out" of the delivery side.

"We only deliver up to [the export port]. That's where all our trade stands. From [the port] all the way to market is deemed as a risk taken by the other economies. And that is where we're losing out as a country."

Mokhele said there was a "huge appetite" for investment in the local maritime sector.

He had recently spoken to two sets of South African investors who were keen to operate SA-flagged vessels, but were constrained from doing so by certain factors.

"There are certain competitiveness factors that they require from our market," he said, but would not elaborate.

He said Samsa was talking to the Industrial Development Corporation "to see how special financial facilities could be created that could support the maritime sector".

Mokhele also called for the development of a plan to train more mariners in South Africa.

Committee chairwoman Ruth Bhengu said the meeting with Samsa followed a request by National Assembly Speaker Max Sisulu.

Among other things, it was to look at "whether there are disadvantages that are a result of the... government getting rid of the fleet of ships that were owned by the country in 1993, and whether there is a need to review that decision".

Bhengu said a report on the briefing, as well as on a coming joint briefing involving Samsa and the transport, public enterprises, and trade and industry portfolio committees, would be sent to Sisulu.

Mokhele also spoke out on South Africa's ageing fishing fleet, saying the sector had an "unacceptable level" of fatalities.

There were currently about 1750 registered fishing vessels, but 900 of these were "decades old and in terrible condition".

The fishing industry employed over 20 000 people, mostly from poor coastal communities, but it was a high-risk profession.

"We bury too many fishers in South Africa," he said.

Among the services Samsa provides to government is, among other things, making proposals on maritime issues affecting the country.




Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Do you think women are under-represented in leadership positions globally?

Previous results · Suggest a vote