Decision on ACSA tariffs faces further delay

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A decision on the Airports Company SA’s (ACSA’s) tariffs, subject of a long-standing feud between ACSA and the airport economic regulator, could be held up even further if the matter is not settled before the board’s mandate comes to an end at the end of March next year, Business Day reports.

The paper adds the Department of Transport at the weekend published a call for nomination of candidates to the five- member committee that is mandated to determine the tariffs of both ACSA and the Air Traffic and Navigation Service. In the next few weeks, transport minister Sbu Ndebele may force the regulating committee to reconsider its decision in March to grant ACSA a 40.7% tariff increase — far below the 132% requested by Acsa — depending on the findings of a task team set up to investigate the matter.

Regulator chairman Mohammed Sizwe told the Business Report in April the tariff for 2010/11 was revised down because there were transactions which had not been taken into consideration when the regulator made its draft determination. In addition to the 40.7% 2010/11 hike, ACSA has been given a 25.6% raise for 2011/12 and 16.2% in 2012/13. The hikes for 2013/14 and 2014/15 are unchanged at 5.5% and 5.6%, respectively.

But ACSA says it needs the hefty increase to pay for the R16 billion spent upgrading its airports and building a new one in Durban.

Business Day says if a new board is put into place and the process restarted, it may be delayed as the new members familiarise themselves with the case before making a new decision. Zakhele Twala, deputy director-general of transport, confirmed Monday that the task team had completed its work and Ndebele would decide on how to proceed.

The feud between ACSA and the regulator dates back to March when ACSA took the regulator to court to have the 40.7% increase set aside and the regulations reviewed. As a result, a war of words erupted between Ndebele and Sizwe, the chairman of the committee, over the minister’s decision not to fund the regulator’s legal team in the case ACSA brought against it. Instead, Ndebele convinced ACSA to drop its case and appointed a task team to determine the validity of the regulating committee’s decision.

Twala insisted that any decision on ACSA’s tariffs next year would have to be made by the existing board before its mandate comes to an end. However, Sizwe said that he had not been approached by the minister to continue as chairman on the committee and had not been consulted on any aviation matters for some time. “I would stay on if asked. However, I would need clarity on several matters before accepting. If these issues cannot be resolved then there would be little point in me continuing in the position,” Sizwe said.

Acsa spokesman Solomon Makgale was not willing to comment on the matter Monday.

IATA last year added ACSA to its “hall of shame” for proposing the increases at a time global airlines were struggling.

The regulator two years ago changed ACSA’s funding model, saying the company should deliver new infrastructure first and then recover the money. The state-owned enterprise had warned that this might mean asking for hefty increases later.

Chris Zweigenthal, the chief executive of the Airlines Association of Southern Africa, in April said even though there would be relief in the first year, the cumulative increase over the first three years was still the same as the draft permission. “The cumulative increase over three years in the draft permission was about 107% and in the final permission it is 105%… It is disappointing and we are still considering our position and perhaps a response to the regulator,” said Zweigenthal.



Vimla Maistry, the acting head of group corporate affairs at SAA, said: “Any increase by the regulator of airport charges will have an impact on the customer as this charge will be passed onto the customer… We hope that improvements to the infrastructure at our airports will ultimately result in improved customer satisfaction.”