On 27 July 2010, Transport Minister Sibusiso Ndebele held a meeting with officials from the Department of Transport, Airports Company South Africa (ACSA), the Regulating Committee, Air Traffic and Navigation Services (ATNS) as well as other relevant stakeholders from the aviation sector regarding economic regulatory matters.
During September 2010, Minister Ndebele appointed a Task Team to advise the Minister on the way forward regarding the impasse between Airports Company South Africa (ACSA) and the Regulating Committee with respect to the 2010/11–2014/15 Permission.
The Regulating Committee is a statutory body established through the Airports Company Act of 1993, mandated to perform the economic regulation of both ACSA and ATNS.
At the time Minister Ndebele said: “Considering the fact that, as Minister of Transport, I am expected to grant approval to the proposed Permission, I have decided to subject this process to an independent Task Team that will, among others, consider and analyse all information tabled as part of the application for the Permission by all parties; interact with all stakeholders, and provide advice to the Minister on whether the proposed permission and suggested tariffs are appropriate, considering all the circumstances.
“This process is aimed at assisting us arrive at a logical conclusion on the Permission. This does not in any way undermine the independence of the Regulator, but rather aims to complement the work they have done. This process will afford the Task Team an opportunity to synthesise all available information, receive appropriate presentations and derive the best conclusions.”
The Task Team, chaired by Ms Busi Mabuza, delivered its report during January 2011. Both ACSA and the Regulating Committee were subsequently informed accordingly.
Based on the recommendations of the Task Team report, the Regulating Committee was requested to consider the recommendations, and provide necessary inputs.
The Regulating Committee adjusted the 2010/11-2014/15 Permission, and on 30 June ACSA gazetted tariffs for 2011/12 in line with the Permission to avoid a further burden on the industry.
The Task Team acknowledged that the current framework does create room for ambiguity and, to this end, the Department of Transport has developed a proposed Road Map to address shortcomings in the current economic regulatory framework of the regulated entities. This exercise has been necessitated by different interpretations of both the ACSA and ATNS Acts, in both principle and procedural matters.
Earlier today, 7 July 2011 we met with stakeholders in the aviation industry to present the proposed road map and receive inputs from the industry.
The road map provides for the formulation and promulgation of regulations to support the purposes and the intentions of the Acts. These regulations will be promulgated in terms of Sections 15 and 14 of the ACSA and ATNS Acts respectively. This exercise will be done in consultation with ACSA, ATNS as well as aviation industry stakeholders. The road map also provides for the review of the funding model of the respective regulated entities. This process is expected to be completed by the end of December 2011, in support of the next Permission cycle to commence in 2012.
It is clear that broader review of the economic regulatory framework within the transport industry, including the aviation sector, is necessary to enable more predictable, transparent and balanced economic regulatory frameworks going forward. This will play a critical role in the facilitation of the implementation of the integrated transport master plan.
As the Department of Transport, we remain committed to a more stable, predictable and transparent economic regulatory environment conducive to continued strong growth of the Aviation Sector.
In this regard, we are working towards establishing a full-time Transport Economic Regulator to assist us to move away from an ad hoc approach. This will allow for improved planning, coordination and efficiency.
Following today’s meeting with the aviation industry, a Steering Committee, chaired by myself (DG: Transport) and comprising of key representatives from the industry, will be meeting bi-weekly (first meeting on 20 July) to drive this process forward. The Steering Committee will be assisted by a Project Team who will commence work immediately.
Finally, as you are aware, ACSA’s Managing Director Ms Monhla Hlahla as well as its Finance Director Ms Priscillah Mabelane will be leaving ACSA.
It is well-known that Ms Hlahla and Ms Mabelane have made an invaluable contribution at ACSA, and will certainly be missed. Both of them have communicated their intentions to the Department of Transport, and so the department is well aware of their departures. However, a strong and competent team is in place at ACSA, and we are confident that the good work will be continued by the quality leadership that has been mentored and nurtured. The ACSA Board is also well on track to find replacement candidates.
Under the current leadership headed by Ms Hlahla, ACSA has become one of the best government agencies in the country. Current airport infrastructure in South Africa has been recognised as being of world-class standard.
The second report card on infrastructure, released on 5 April by the South African Institution of Civil Engineering, states that the country’s best performing infrastructure was its aviation infrastructure which was awarded the report’s only A rating.
According to the report, ACSA performed exceptionally well. Earlier this year, the OR Tambo International Airport was named the best airport in Africa, and was also in the top three most-improved airports worldwide at the World Airport Awards for 2010/11 held in Denmark.
Transport infrastructure in South Africa will radically change over the next few years. Consolidated multi-billion rand improvements by government to transport infrastructure over the next two years are guaranteed to alter the way South Africans travel. Amounting to R66 billion over the next year, and rising to R80 billion by 2013/14, the improvements are set to also create numerous job and tourism opportunities, with both urban and rural areas benefitting.
Enquiries:
Sam Monareng
Cell: 083 326 1521
