Appeal for SA to get shipshape
Business Live - Jul 9th 2012, 09:41
The maritime industry is currently housed in the Department of Transport, which is also responsible for aviation, logistics and rail.
"The sector is big and the Department of Transport has too much in its hands," said Mxolisi Zwane, head of policy at the Black Business Council.
Zwane was speaking on the sidelines of the South African Maritime Industry Conference in Cape Town this week.
Despite South Africa's trade being heavily reliant on shipping, the country does not own a single shipping vessel. Ships registered in other countries are responsible for moving cargo on a free-on-board (FOB) basis, which critics say disadvantages potential local entrepreneurs.
"It allows people to buy our mineral resources on their own terms, where prices are being set by conglomerates. This inhibits transformation," said Zwane, who intends to pressure government to look into the matter.
Zwane said many job opportunities could be created if the marine sector was properly regulated.
"On our part we will encourage our communities to participate in all the marine sector activities through workshops by the South African Maritime Safety Authority," he said.
Nkanyiso Buthelezi of Inala Shipping said: "We need to have a firm commitment from cargo owners to dedicate about 50% of their cargos for black companies."
Buthelezi said part of the problem lay with conglomerates, active in South Africa, that have their commercial offices offshore.
"If you want to negotiate business with the company, they will always tell you that their office is either in London or Zurich. That is very difficult for a black emerging company. This makes the costs of doing business skyrocket. We need to rectify the problem before someone says the sector should be nationalised," said Buthelezi.
Xolani Mkhwanazi, president of the South African Chamber of Mines, said even if the mining conglomerates had offices in South Africa, the fact remained that there are no South African-owned shipping companies.
"We export about 130 million tons of cargo per year and unfortunately all of them are exported on non-South African registered vessels," said Mkhwanazi.
Since 1997 South Africa has declined as a ship-owning nation as a result of better tax jurisdictions being offered by other countries, with Singapore the most preferred destination.
It also emerged at the conference that the fishing industry, which employs about 28000 people has been hit hard by rising fuel costs, which now accounts for 40% of the sector's input costs.
Representatives from the oil and gas sector said decisionmaking in the state-owned entities is lax, and that the infrastracture of ports is not cost effective which renders the sector uncompetitive.
Delegates also urged the, ports and rail parastatal to continue to invest in infrastructure despite the downturn to be prepared for an uptick in the industry.
Transnet should avoid the 2008 and 2009 "fiasco" when the transport utility cut back on investing in infrastructure because of the global financial meltdown.
"There is a need of making sure that the costs at our ports are reasonable and that they have greater efficiency so that the country is able to compete with the rest of the world," said Ben Martins, minister of transport. Work on the maritime policy will be completed by the end of the year, he said.
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