June 2013 Newsletter
Winter in Pretoria has finally arrived, so we are having to deal with early morning temperatures of around 0°C, but which rise to around 20°C by midday – sympathies accepted. This more-or-less matches the spring weather I experienced in the UK at the beginning of May. I spent last week in Cape Town, where we had a few days of cold, wet and windy weather, typical of the “Cape of Storms” during winter.
In South Africa, the media has been focussing on the serious health condition of Nelson Mandela, who is still receiving medical care in a Pretoria hospital, and most recently, the visit of President Obama (he travels from Pretoria to Cape Town today). Trade facilitation, both in South Africa and on the African continent as a whole, is of the key issues being discussed. Much of the freight to and from countries in southern Africa is transported by road via South African ports. As mentioned in one of my previous newsletters, reducing the relatively high cost of logistics in Africa (approximately double the equivalent costs in Europe for containerised freight) remains a major challenge.
In this vein, the 9th State of Logistics Survey for South Africa was launched during June. The theme of this year’s report is “Connecting Neighbours – Engaging the World” and thus has a greater emphasis on Regional logistics issues than previous surveys. The report includes articles on road freight challenges in South Africa, the potential effects of deteriorating road conditions, developing the SADC port community and inland connectivity in the SADC Region. Worth noting is a change in the long-term downward trend of rail freight market share. Albeit it small (less than one per cent), there has been a slight but consistent increase in rail market share since 2010, both in terms of tonnes and tonne-km. The report can be downloaded at www.csir.co.za/sol
A significant heavy vehicle-related event in May was the publication for public comment of the Carbon Tax Policy Paper, Reducing greenhouse gas emissions and facilitating the transition to a green economy by National Treasury. This is an update on the 2010 discussion paper Reducing gas emissions: the carbon tax option. South Africa is a signatory of COP 17 and thus undertakes to implement national actions to curb GHG emissions by 34 % by 2020 and 42 % by 2025 below business as usual. The aim of implementing carbon taxes is to change future behaviour rather than to generate revenue – so they say. Key features of the tax include three 5-year phase in periods, Phase 1 of which starts in Jan 2015; an across the board 60 % tax free threshold of actual emissions; a 70 % tax free threshold for the electricity sector, with some sectors qualifying for up to a 90 % tax free threshold; exemption for the agricultural and waste sectors during Phase 1 (to be reviewed for Phase 2). The carbon tax will start at approx. US$ 12 per ton of CO2e increasing at 10 % per annum during Phase 1. Taking into account the various exemptions, the effective tax rate will vary from US$ 1.20 to US$ 5 per ton of CO2e in 2015. Representatives of the road freight sector have been engaging with government for some time regarding various issues, in particular the limited availability of appropriate fuels for operating Euro 4 and Euro 5 engines in southern Africa. The Carbon Tax policy paper can be downloaded from http://www.treasury.gov.za/public%20comments/
Details of the next HVTT conference in Argentina should be available within the next month or two.
All the best and drive safely
Paul Nordengen
IFRTT President
