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Thursday, January 1, 2009
Licence issues

Although the National Ports Act commenced almost two years ago, the full effects of the law are yet to be felt. The Act contemplates some drastic changes to the regulation of port facilities and services, one of the most notable being the requirement that they all be licensed or registered by the National Ports Authority (TNPA) in terms of the procedures laid out in the act and its rules and guidelines.
There is some relief for persons who provided a service or operated a port facility immediately prior to the commencement of the Act on 26th November 2006 as, in terms of section 65, they are initially deemed to hold a licence in terms of section 57 to operate the facility or provide the service. Such persons must still apply for a licence within six months of a date still to be determined by the Minister of Public Enterprises. The licence will be issued to them if TNPA is reasonably satisfied that they are capable of complying with the licence terms and conditions.
The intention of the act, read with the guidelines, seems to be that certain facilities, (including terminal operations) that were not being operated immediately prior to the commencement of the act must be offered to the public in terms of a tender process.
A problematic issue is that the law does not specify the period of the licence to be issued in terms of section 57, nor what will happen after the termination of the licence. In the circumstances the initial comfort afforded to existing port services providers and port facility operators quickly dissipates with the realisation that these issues may be subject to TNPA’s discretion, leaving the providers and operators no assurance of their ongoing operation within the port.
A further possible barrier to an existing operator’s continued operation in the port is TNPA’s application of the BEE requirements contained in the regulations. From this year until 2010, the regulations oblige TNPA to ensure that at least 25% of the entities with which they conclude new leases or to whom they issue new licences in a particular year are at least Level 4 contributors at the time the contract is concluded or the licence issued. From 2011 onwards, this percentage increases to 75%. Present indications are that TNPA may interpret the regulations to mean that 75% of all existing operators must become Level 4 compliant by 2011.
In the circumstances, it seems that existing operators within the port should seek advice about their rights and obligations under the Act, if they have not done so already. By Victoria Hobson, Director , Garlicke & Bousfield  Inc

Copyright © Insurance Times and Investments® Vol:22.1 1st January, 2009
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