Articulating South Africa’s port doctrine for a democratic developmental state.

Abstract

South Africa lacks a concise paradigm for port governance. This results in a number of challenges including lack of cost-based pricing for port services, retrogressive cross-subsidization, inequitable cost allocation to user groups, siphoning profits from ports to other loss-making divisions of the transport conglomerate; Transnet’s anticompetitive practices; the port authority’s disregard for the legislative demand to corporatize and poor port performance relative to the premium tariffs charged which compromises South African ports’ global competitiveness. These challenges cannot be satisfactorily addressed without interrogating the socio-political context within which pricing decisions, tariff structuring and port investment is done and questioning the philosophy informing these – the port doctrine. With South Africa professing to be a democratic developmental state, there is no divorcing her political dynamics from government’s strategic intervention in the ports sector. The socio-political demands and economic and trade objectives framing the entire macroeconomic strategy have, therefore, to filter down into the ports sector. This is a PhD by publication with four objectives, addressed through four papers. The study’s overall objective is to ex-ante articulate a South African port doctrine that translates her developmental state policies into a doctrine that addresses pricing methodology, tariff structure and port governance challenges. This study makes prescriptions that account for both historical context from which port governance emerged and the political convictions of the present and economic aspirations of the future, all within the paradigm of a democratic developmental state. Content analysis and document analysis through NVivo 11 Pro® are used to analyze data from secondary sources. It assesses comments from various port stakeholders concerning the Revenue Required tariff methodology, tariff structure and the evolutionary changes made to these through the consultative regulatory process facilitated by the Ports Regulator of South Africa. This study articulates South Africa’s own port doctrine. The doctrine aligns macroeconomic strategic intents with port policies and provides a framework for constructing port policy henceforth, gleaning lessons from some East-Asian states. The proposed doctrine presents a different approach to tariff methodology, tariff structure and port investment. Lastly, it proposes a port devolution strategy to achieve increased local private enterprise participation in ports.