Guest

The fuel berth at the Port Elizabeth Port was damaged in June of this year, resulting in industry hauliers having to transport fuel via road from East London to Nelson Mandela Bay.

The Department of Minerals and Petroleum Resources, in response to the additional costs associated with transporting the fuel to the metro, then decided to implement revised transport tariffs in October and November 2024 for petrol, diesel and paraffin for Nelson Mandela Bay and surrounding areas. This resulted in interim zone changes in the affected areas, to allow the industry hauliers to recover their fuel transportation costs.

The Chamber notes that this pricing structure is supposed to be temporary in nature, and once the fuel berth is repaired the area will return back to its former allotted zone. We however estimate that this decision is causing an irrecoverable direct loss to the local economy of approximately R50 million per month. By way of example the October unleaded 95 petrol price decrease was supposed to have been 114 cents per litre but due to the rezoning of Nelson Mandela Bay this price decrease was only 31c per litre, representing a loss of 83 cents per litre.

In November the price of unleaded 95 petrol increased by 25 cents a litre but due to the inland zoning this was increased by 83 cents a litre for consumers in Nelson Mandela Bay.  Collectively this means that to date Nelson Mandela Bay consumers have paid R1.66 more per litre for 95 unleaded fuel versus what they would have paid if the area was still a coastal zone.  In terms of diesel and paraffin the collective additional amount paid by consumers is also R1.66 more per litre.

In the best interests of our members, consumers and communities, the Chamber took action by filing an urgent review application in October, to gain access to the information which informed the Minister’s decision and have since received the record of decision from the Department.

From the records received it would appear that the Minister did not consider any other options to mitigate the impact of the issue on consumers, but rather focused solutions on addressing the additional transport supply costs and the recovery thereof.

More over we remain concerned, that this potentially creates a precedent for the state to simply transfer its obligations to innocent parties without taking accountability and without regard to the right to administrative justice which is enshrined in our Constitution.

While we have achieved success in putting pressure on the Minister, as well as Transnet to accelerate the repair of the berth at the Port Elizabeth Port and return the metro back to being part of a coastal pricing zone, we are extremely disappointed that consumers and businesses continue to carry additional costs through the fuel price adjustments to fund this. It casts doubt that the berth, which is earmarked to be repaired by the 6 th of December, is on track and potentially may not achieve this deadline. This may mean that the metro may potentially not revert back to its coastal zone pricing status ahead of the holiday season.

As we are a non-profit organisation and do not have the financial resources of the state, the Chamber decided to reach a settlement with the Minister, whereby through a court order it has been agreed that Nelson Mandela Bay will revert back to being part of the coastal zone once the berth is operational again.  The Minister was not willing to make this change from early December or January when the fuel price adjustments take place, indicating the low confidence levels in the berth becoming operational timeously.

We are very unhappy with the lack of firm commitment and ongoing approach of punishing Nelson Mandela Bay based consumers and businesses for an issue which is not of their making.

It is the Chamber’s view that the additional costs incurred to date in transporting these fuels into the area by road has been unfairly passed on to businesses, consumers, commuters and local communities. None of these key stakeholders were consulted prior to the rezoning by the Minister. Businesses, consumers, commuters and local communities have been made to bear the brunt of a shipping vessel accident, not caused by them, by paying inflated prices for fuel and indirectly for other goods and services.

It is of concern that the Minister did not adequately consider key regional indicators which reflect that Nelson Mandela Bay is in recession and has amongst the highest unemployment rates in the country. Of equal concern is that consumers and businesses are already reeling from the consequences of the massive municipal utility price increases and other factors affecting the cost of living as well as costs associated with operating businesses.

fter two years of disruption caused by criminal vandalism, the traffic lights located at the crucial intersection linking Perseverance Industrial Area to the major routes between Kariega and Despatch has finally been repaired. Its restoration was made possible through a successful collaboration between the Nelson Mandela Bay Municipality and the Nelson Mandela Bay Business Chamber’s Perseverance Geographic Cluster.

The Perseverance Cluster, which operates as the Perseverance Business Association, was the first geographic cluster to be established under the banner of the Business Chamber and the number has now grown to 11 geographic clusters operating across the Metro.  

The traffic lights, which serves as a key traffic control point for the industrial area, one of the Metro’s main economic hubs, had been out of service since vandals repeatedly targeted it. The broken signal caused significant safety concerns and traffic delays for both businesses and residents, negatively impacting the flow of goods and services in the region.
However, thanks to the power of public-private partnerships, the traffic lights are now operational again. The association recognised the importance of maintaining smooth traffic flow and installed a camera system aimed at monitoring and deterring further vandalism.

The association, working alongside the municipality, have committed to regular monitoring of the intersection and have implemented additional security measures to prevent future incidents of vandalism. This partnership underscores the importance of cooperation between the public sector and private enterprises in addressing challenges that affect both local economies and public safety. It further highlights how local businesses are stepping up to help protect vital infrastructure.

“The restoration of this traffic light is a testament to what can be achieved when public and private entities come together with a shared goal. By working collaboratively, we are not only solving an immediate problem but also demonstrating a model of cooperation that can be applied to other areas of service delivery in our region,” said Siyolo Dick, chairperson of the Perseverance Business Association.

“This is a major win for everyone who relies on this route for work and trade. With this partnership, we’ve shown that community engagement and private sector support can play a pivotal role in addressing public service challenges.”

Dick said the traffic lights are now back in full operation, helping to improve the efficiency of traffic flow, reduce congestion and ensure safer travel for thousands of daily commuters using this route.

“The collaborative effort is a prime example of how communities, businesses and government can join forces to enhance service delivery and improve quality of life for all. Our aim as PBA is to continue creating an enabling environment for the businesses within this zone and ultimately create self-sufficiency which will add value for all the stakeholders.”

Perseverance is one of the oldest industrial zones in the Metro and has a competitive advantage of housing world-class businesses and brands, who employ over 10 000 people within an area that is equidistant to customer locations and harbours.  It contributes 5% per month of the total municipal rates paid in the metro.

The Nelson Mandela Bay Business Chamber participated in NERSA’s hearing today on Eskom’s 6 th multi-year price determination which reviews electricity increases for the 2025/26 and 2027/28 financial years. The proposal is for electricity tariffs to increase in the 2025/26 financial year by 43.55% for municipalities, and follows two decades of much higher than inflation related increases in electricity tariffs, says Chamber chief executive, Denise van Huyssteen.

The requested increases are the result of a range of well documented issues including delays in the commissioning of new power stations.

The Chamber is opposing this increase which is looking for around R300 billion income through the imposition of electricity tariffs at an above inflation rate for the next three years. Transferring these costs to businesses and consumers is simply unsustainable.

One of South Africa’s competitive advantages used to be having among the cheapest electricity rates in the world, and now we have a situation where by 2026, medium sized industry in municipalities will be subjected to less competitive tariffs versus other emerging markets.

Municipal inefficiencies and particularly non-payment to Eskom, is a further burden, which is being shifted to the electricity users. The application includes unresolved municipal debt of R187 Billion, to be funded by Eskom through the tariffs.  

Added to this the electricity distribution in many municipalities, including in this metro, is financially unsustainable. In fact the Nelson Mandela Bay Municipality is budgeted to make a R1.3 billion loss in electricity, which previously was a profitable function. Key issues which need to be addressed include illegal electricity connections and meter tampering.

Equally worrying is the lack of investment in routine maintenance and upgrading of the electricity infrastructure. This poses a serious risk to the sustainability of businesses and especially those in the manufacturing sector.  Within the industrial and commercial areas of the metro, we have tracked 66 major power dips this year and 114 unplanned power outages since January 2023. These power outages pose massive risks to our economy among which include production volume targets not being met, loss of export orders, costly damage to equipment and machinery, the elimination of shifts and placement of workers on short time, retrenchments and even relocation of manufacturing plants to other countries or their permanent closure.

One of the fundamental requirements of operating a business is having access to cost effective and reliable electricity power. The Chamber regards this as a high priority and is willing to collaborate with the relevant stakeholders to find and implement sustainable solutions. Specific initiatives which we are currently driving include Adopt A Sub-Station and the Electricity Technical Task Team which incorporates the participation of the Municipality, Eskom and Chamber members and is focused on addressing critical municipal electricity infrastructure issues.