Executing public-private partnerships in transport infrastructure
Executing public-private partnerships in transport infrastructure
A public private partnership (PPP) has been mooted by many as the solution to South Africa’s transport woes – especially when it comes to the country’s ports. In the second instalment of this two-part article, PROF JOHN MALULEKE explains how a PPP can be implemented.
In South Africa, the Railway Safety Regulator (RSR) ensures that all safety regulations are complied with, while the Railway Economic Regulator (RER) ensures that there is absolute compliance with economic regulations.
Railway Safety Regulator
The RSR was established in terms of the National Railway Safety Regulator Act of 2002. It is mandated to oversee railway operations, monitor operators, and enforce a safe operating environment. This includes rail operators in neighbouring countries with operations that enter South Africa. Over the medium term, the regulator focuses on issuing safety permits, conducting inspections and audits, investigating railway accidents, and developing regulations and safety standards. When embarking on a PPP initiative, both Railway Safety and Port Regulators must cast an eagle eye over potential applicants aiming to gain access to the transport operating environment.
Road-based transport constitutes the best flexible transportation mode to facilitate the efficient flow of freight from inbound vessels to customers. When containerisation is performed, the speed at which containers are offloaded from vessels to trucks and exit the berth area is called cross-docking. The image below shows how cross-docking can improve the berth occupancy ratio and thus ensure that the port dynamic capacity is efficiently utilised.
Cross-docking and its benefits
The concept of cross-docking enhances the efficient and seamless flow of freight from the point of origin to the point of sale. It reduces human capital logistics costs by eliminating the traditional material handling technique. It also reduces the cost of keeping inventory in storage facilities or warehouses, thus potentially eliminating the need to retain safety stock. Finally, cross-docking enhances the convenience and quality of service delivery, as products safely reach distributors (and consequently customers) more quickly.
When considering the concept of PPP in both the rail and maritime transport infrastructure, road-based transport logistics cannot be excluded, because increased flexibility and accessibility to the port infrastructure area will always bring efficiency in the entire supply chain.
Seaport services
It is worth noting that different agents compete in providing multiple services within port infrastructure. In most cases, some agents may establish themselves and construct warehouse facilities at a private siding outside the port area. In such situations, the regulatory body responsible for ensuring the safe operation of such sidings would be the RSR.
When an array of safety critical services is being rendered at the port area, the Port Authority assumes responsibility – this is a fundamentally important point to remember. It is the prerogative of the Port Authority to consider adopting the concept of private sector participation, on the condition that an enabling legal framework has been enacted. The private party will only participate if the enabling legal framework is in place and supported by the so-called “political will”.
Berth area
In shipping terminology, the berth area refers to the space allotted to ships for mooring or securing by means of thick ropes. Each port or terminal has several berths with equipment for handling cargo, as well as open or closed storage areas. The unloading and loading of vessels at the berth area can be assigned to the private sector. These are the logistical cargo handling activities that can be assigned to the private party through management contract agreements, and are part of short-term contractual agreements that can be awarded to the small and medium enterprises in the maritime industry.
Port Regulator
The National Ports Act of 2005 empowers the Port Regulator to exercise economic regulation of the ports system in line with government’s strategic objectives. It further promotes equity of access to ports, as well as facilities and services provided in ports. The Port Regulator strives to regulate the maritime transport ports infrastructure system. On the transport economic regulatory side, it sets tariffs for the National Ports Authority and oversees compliance with a view to maintaining transparency and competitive practices for ports infrastructure. The regulator remains focused on strengthening the economic regulation of the ports’ infrastructure and compliance with the ports’ regulatory framework.
South African Maritime Safety Authority (SAMSA)
SAMSA is a government agency responsible for the implementation of current international and national regulations regarding the maritime industry, as well as its application upon all recreational marine vessels within its jurisdiction. The agency was established on 1 April 1998 in terms of the SAMSA Act, Act No. 5 of 1998. The key mandate allocated to SAMSA in terms of the Act is to ensure safety of life and property at sea, prevent and combat pollution from ships in the marine environment, and promote South Africa’s maritime interests. In addition, SAMSA is tasked with the administration of the Merchant Shipping (National Small Vessel Safety) Regulations and implementing and executing the Long-Range Identification and Tracking (LRIT) of vessels along the South African coastline.
Conclusions
It remains the responsibility of the public sector to ensure that different vessels are navigated safely and securely in and outbound of South African territorial waters. The time has come for the existing transport infrastructure to be rehabilitated and operated with a view to complying with International Maritime Organization standards, while there is also a critical need to enhance the fundamental principles of efficient operations in modern transportation systems. The concept of public private participation in both the maritime and rail industry is a strategic must. It should be given the highest priority by ensuring that the so-called “political will” becomes a culture that can navigate the transformation of South Africa’s logistics systems and industry.
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