NATIONAL PORTS AUTHORITY 2017
Market Demand Strategy (MDS)
Sustainable Developmental Outcomes (SDOs)
Financial capital Human capital
Manufactured capital Social and relationship capital
Intellectual capital Natural capital
Improvement on prior
year performance Target achieved
Decline on prior year
to prior year Target not achieved
MDS strategic thrustsMaterial clusters
Build social trust through
ethical leadership and
value by attracting talent,
fostering innovation and
Ensure long-term financial
stability in a tough economy
and build partnerships for
and growth in the wider
South African economy
Navigating this report
BUSINESS OVERVIEW 2
REGULATORY ENVIRONMENT 4
PERFORMANCE CONTEXT 5
OPERATIONAL PERFORMANCE 6
Core initiatives for 2017 6
Overview of key performance indicators 9
Financial performance review 11
PERFORMANCE COMMENTARY 12
Financial sustainability 12
Looking ahead 12
Capacity creation and maintenance 13
Looking ahead 13
Market segment competitiveness 14
Looking ahead 16
Human capital 17
Organisational readiness 17
- High-performance culture and environment 17
- Skills development 17
- Health and safety 17
Governance and ethics 18
- Environmental stewardship 18
- Social accountability 18
NATIONAL PORTS AUTHORITY TOP 5 RISKS
AND KEY MITIGATING ACTIVITIES 19
ABBREVIATIONS AND ACRONYMS 21
CORPORATE INFORMATION 22
1TRANSNET National Ports Authority 2017 1
Port security audits were
completed in alignment
with International Ship and
Port Facility Security Code
Two port festivals at the
ports of Durban and Port
Elizabeth were held during
the year under review.
Port festivals are platforms
to promote interaction
with communities and
expose them to the maritime
sector as a way of
to the sector.
NATIONAL PORTS AUTHORITY
Net operating expenses
increased by 3,9% to R4,0
billion (2016: R3,9 billion)
– which is below the
inflation rate of 6,1%.
have been completed
for all ports.
Four new tugs
to the port
system as part of
during the past year.
4,28 million m3 vs
4,25 million m3)
Port real estate
the target range.
The Division’s EBITDA
was 12,6% lower than
the previous year at
R6,2 billion (2016:
R7,3 billion), mainly due
to inadequate volumes
and revenue performance.
On the construction of Joint Operations
Centres (JOCs) across seven ports: the
JOCs in the ports of Durban, Richards
Bay, East London, Port Elizabeth, Cape
Town and Saldanha are operational, with
the Port of Durban JOC operating 24/7.
The Port of Ngqura is in the final stages
of construction. The Port of Mossel Bay
is still at early stages of construction.
Joint Operations Centres
In the year under review, revenue dropped by 6,9% to R10,4 billion (2016: R11,1 billion). The decline is largely attributable
due to a zero tariff determination by the Port Regulator and a negative claw-back adjustment of R1,0 billion (2016: positive
R136 million), as well as a decrease in break-bulk and automotive volumes. The depressed local economy adversely affected
volumes directly linked to the country’s GDP performance.
TNPA, in its role as regulator, is required to ensure that
efficient port services are rendered to port users.
As part of its oversight responsibilities, it ensures
compliance by port users with conditions contained in
the operators’ agreements and licences.
South African ports owned by TNPA facilitate over 90% of
South Africa’s global trade and service the shipping feeder
network connecting the west and east coasts of Africa.
Major commodities handled at the ports include coal, iron
ore, containers, automotives, steel, fruit, ferrochrome,
manganese ore, and petroleum and chemical products.
The National Ports Authority (TNPA) operates as a port landlord - managing, controlling and administering the South
African ports system. Core services include the maintenance and provision of port infrastructure, as well as the
provision of maritime operations, such as pilotage, towage (tug assistance), dredging, and lighthouse and navigational
services. The Operating Division owns and operates Transnet’s commercial ports, which are situated in Durban, Richards
Bay, Cape Town, Port Elizabeth, Ngqura, Mossel Bay Saldanha, and East London.
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3TRANSNET National Ports Authority 2017 3
Eight operational ports under the National Ports Authority’s control
Mossel BayCape Town
• In response to managing regulatory and revenue risks,
Transnet engaged with the Ports Regulator of South
Africa and port users (through roadshows) during
October 2016 to review the multi-year tariff
methodology, which was then published on 31 March
2017 for the 2019 to 2021 tariff periods.
There are three levels of regulation and control within
the port environment:
1. Regulatory oversight and compliance;
2. Economic regulation; and
3. Efficiency of port operations.
• On 1 August 2016, the National Ports Authority applied
for an average tariff adjustment of 8,02% for the 2018
financial year. On 1 December 2016, the Ports Regulator
of South Africa published its tariff decision for the
2018 financial year, approving an overall average tariff
increase of 5,97%.
The National Ports Authority, as a regulated entity, is required to ensure that the execution of its strategy is in
compliance with the National Ports Act, No 12 of 2005 (Ports Act). The Ports Act requires TNPA to assume the role of a
regulator of port users, while also being regulated by the Ports Regulator.
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5TRANSNET National Ports Authority 2017 5
Strategically, TNPA assumes the role of market integrator
aimed at creating value across the supply chain.
During the 2017 financial year, operational performance
measures were better than target across most measures
used by the Division. This is indicative of the value-
adding role that the Division aims to play. However, with
the national and global economies still underperforming,
the operational efficiency improvements made by the
Division are not translating into commensurate financial
returns as yet.
Against the background highlighted above, TNPA’s
strategic efforts during the year were focused on
managing its regulatory obligations, delivering on its
planned infrastructure programme, improving integration
of operational performance, and enhancing customer
relations as part of the total value proposition to
facilitate market segment competitiveness.
TNPA continues to implement key elements of its
operating strategy, which is geared towards the
reduction of ship turnaround time, vessel waiting time
and cargo dwell times, as well as to the better utilisation
of port assets – thereby reducing port costs.
The National Ports Authority aims to create sustained economic value with respect to its policy mandate. It does
so through its strategic role as the national provider of port infrastructure capacity and efficient and competitive
Core initiatives for 2017
Implement the capital and maintenance programme.
Improve the availability of the marine services fleet through the fleet management
Oversee compliance with Terminal Operator Performance Standards and Marine Operator
Performance Standards performance targets.