The transport sector yesterday said the enactment of the Economic Regulation of Transport Bill, which is expected to prioritise the establishment of an industry regulatory body with enhanced powers to enforce compliance, was long overdue as the shared infrastructure had badly deteriorated and needed the multi-modal management principles.
This comes as the bill, signed into an act earlier this month by President Cyril Ramaphosa, missed the March timeline for implementation.
The Department of Transport (DoT) has confirmed groundwork on enactment of the act after it was signed into law, which included the process to appoint a service provider to review the legal reforms of the regulator as outlined in the bill.
DoT spokesperson Sam Monareng, in reference to Minister Sindisiwe Chikunga’s statement, said the Ports Regulator of South Africa (PRSA) had been mobilised along with its staff to form the nucleus of the Transport Economic Regulator (TER) as it already performed economic regulatory functions.
PRSA CEO Jowie Mulaudzi said the current ports regulator needed to morph into the new entity with enhanced powers to enforce compliance and decisions.
“It is important to note that the single transport economic regulator expands the regulation beyond infrastructure. Secondly, we will not only be regulating in terms of pricing, but also access to infrastructure, services and facilities,” she said.
Analysts said that unlike with the energy crisis, where there were options of seeking alternative sources of power due to load shedding, industry players could not find individual solutions, hence the importance of a regulator to define the rules and promote efficiency.
“The regulator is envisaged to act similarly to the National Energy Regulator of South Africa (Nersa) and will approve price tariffs of regulated entities, such as Transnet, for use of the infrastructure in those sectors,” said transport and logistics experts at Cliffe Dekker Hofmeyr, Vivien Chaplin and Gaby Wesson.
“This aims to prevent monopolistic pricing by regulated entities and inefficiencies, while also levelling the playing field. Importantly, the regulator has the discretion to tailor the price controls in respect of each sector.”
They said the streamlining of regulators, if implemented effectively, will help to make the transport system more efficient and cost effective.
“Notably, there is no mention of capacity as a rate determinant as historically applied by Nersa, which has resulted in hiked-up tariffs. Importantly, the regulator is also mandated to consult with industry players and the public regarding the proposed price tariffs before approval.”
Bazil Govender, Unitrans’s senior business development manager, said the complexity of aligning multiple stakeholders with different objectives has led to a disjointed approach that often fails to meet the diverse needs of the country’s commuters.
Govender said that notwithstanding the soundly crafted policies, implementation has been slow and inconsistent, leading to a perception that transport was a low national priority.
Yet, he said it should be prioritised if the country was to progress economically as when transport was readily available, access to opportunities increased exponentially.
“Real change for the industry can be brought about by working with the private sector through concession agreements or long-term investment mechanisms,” Govender said.
“South Africa needs a sustainable, reliable, efficient and punctual integrated multi-modal transport system daily. This is critical to promoting mobility and creating growth opportunities.”
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