Tariffs Gazetted for the tolling of Gauteng highways will be suspended until further notice, Transport Minister Sibusiso Ndebele said on Tuesday.

The announcement does not mean a change in the rolling out of the system in June, leaving only three months to deliberate and come to conclusion.

It comes after a meeting with Gauteng premier Nomvula Mokonyane.

A panel of experts, made up of representatives from the transport department, the SA National Roads Agency Limited and the Gauteng government, will also review the financial model on which the R20-billion transaction was based.

“The Premier and I agree on the principle of tolling. Government reiterates its commitment to fully honouring the terms of the loan agreement for this transaction,” said Ndebele.

“We will be engaging with the investors to keep them in the loop and assure them that we remain fully committed to the repayment of the R20-billion loan.”

Mokonyane said it would be unfair to say that government took long before reacting to concerns.

A structured process of consultation and one for input from the public on the cost structure and financial model will soon be announced.

“South Africans can be best assured that government is doing everything possible to resolve this matter in a manner that will be in the best interest of the commuter, road user and the state for future development and management of our road infrastructure in the country,” Mokonyane said.

Consultations would at most take a month, before the rolling out of the toll system in June.

“We need to give commuters options,” she said.

Tempers flared after it was announced that in June it will cost 66c/km at the 42 electronic toll gates erected on the N1, N3, N12, N17, R21 and R24.

The tolls cover a distance of about 185km.

Concern was raised by businesses, labour and political parties, about the effect toll fees will have on the poor, the economy and alternative routes.

The modernization of South African Customs operations has gone a long way to improving clearance times and fast forwarding the movement of goods to neighbouring countries.

The introduction of the EDI system has helped speed up South African customs clearance times. The EDI system is all about improving and increasing trade by reducing document processing tasks and costs. It also improves the entire supply chain by organizing the flow of information from one end to the other.

The new system, which makes the Form F178 (an exchange control declaration) redundant should also have a positive impact as it will reduce exporters’ time spent preparing documentation. Efficiency is about good planning and understanding of customs systems on both sides of the border. It is important to ensure that all necessary customs criteria are met prior to the movement of cargo.

The International Air Transport Association (IATA) reported full-year 2010 demand statistics for international scheduled air traffic that showed an 8.2% increase in the passenger business and a 20.6% increase in freight. Demand growth outstripped capacity increases of 4.4% for passenger and 8.9% for cargo. Average passenger load factor for the year was 78.4% which is a 2.7% improvement on 2009. The freight load factor saw a 5.2% improvement to 53.8%.

Compared to the pre-recession levels of early 2008, December air travel volumes were 4% higher. Air freight was 1% higher than pre-recession levels; however volumes have fallen 5% since the peak of the post-recession inventory re-stocking boom in early 2010.

“The world is moving again. After the biggest demand decline in the history of aviation in 2009, people started to travel and do business again in 2010. Airlines ended the year slightly ahead of early 2008 volumes, but with a pathetic 2.7% profit margin. The challenge is to turn the demand for mobility into sustainable profits,” said Giovanni Bisignani, IATA’s Director General and CEO.

Severe weather across Europe and North America in December put a dent in the industry’s recovery. It is estimated that this shaved 1% off of total traffic demand for the month. As a result passenger demand dipped to 4.9% growth on December 2009 levels, significantly lower than the 8.2% growth recorded in November. Hardest hit was Europe which saw December growth slow to 3.3%.

Freight demand growth varied wildly over the year from a high of 35.2% in May to a low of 5.8% in November. Overall the industry is trending towards a normal growth pattern in line with the historical growth rate of 5-6%.
The regional variation in growth remains particularly marked. Latin American carriers recorded the highest full-year growth rate of 29.1%, followed by Middle East carriers (accounting for 11% of the market) at 26.7%, Asia Pacific airlines (with a 45% market share) grew by 24.0%, Africa at 23.8% and North America by 21.8%. Against these industry gains, Europe’s 10.8% growth stands out as exceptionally weak.

“The story this month is the sharp rise in oil prices. We predicted that 2011 would see a consecutive second year of profitability but with industry profits falling by 40% to $9.1bn. This was based on an oil price of $84 per barrel. Fuel accounts for 27% of operating costs and a sustained rise in the oil price could spoil the party. With uncertainties in the Middle East, oil prices are now hovering near the $100 per barrel mark. For every dollar increase in the average price of a barrel of oil over the year, airlines face the difficult task of recovering an additional $1.6bn in costs,” said Bisignani.

Producer price inflation slowed year on year last month, slightly less than market forecasts, but it is not expected to remain subdued, because of high oil, food and commodity prices abroad.

This, coupled with some rand weakness and higher wage demands, could easily translate into increased domestic inflationary pressure this year , off a low base, Stanlib economist Kevin Lings said.

“This is one of the key economic risks for SA this year,” he said.

Producer price inflation fell last month to 5,8% year on year from 6,2% the month before. A Bloomberg consensus of economists had forecast the figure to be 5,9%. Between November and last month , producer price inflation rose 0,3%. Between October and November, it had increased 0,7%.

Statistics SA said the relative month-on-month decrease was due to the fall in prices of mining and quarrying processes, petroleum and coal products, and rubber and plastic goods. Mr Lings said the effects of key rising prices overseas had not yet all filtered through into the South African economy’s data.

However, Thebe Securities analysts said they expected producer price inflation to continue to fall in the coming months. But this would not have any medium-term “disinflationary” effect on consumer price inflation.

“From a CPI (consumer price index) point of view, we see the threat from oil, food and the exchange rate as currently underestimated,” they said. They saw the CPI breaching the top end of the Reserve Bank’s 3%-6% band next year, “with a risk of even higher surprises”.

However, this did not suggest an interest rate cut was likely any time soon. “For the Bank, indications are that another rate cut in the current cycle is unlikely, with the focus having now shifted towards the timing of the first rate hike. We also expect the next Bank move to be a rate hike, which we pencil in for middle to late 2012,” they said.

Inflation pressures will grow if unions manage to gain high wage hikes this year, even if they are in the private sector, analysts have noted.

Last week Reserve Bank governor Gill Marcus said increases in productivity needed to be borne in mind when workers were awarded pay increases and that all parties needed to act cohesively.

Last year, the state set a precedent for high wage increases which may flow through to the private sector, labour analyst Tony Healy said.

Even if statistics suggested they were lower compared to previous years, the wage bill may be unsustainable, he said.

Rand Merchant Bank economist Rudolf Gouws said on Wednesday that SA had the highest proportion of middle-class citizens employed in the public sector compared to other emerging economies.

The huge spending of the state on its public sector wage bill crowded out much other spending, he said.

This related to ransom money paid, higher insurance premiums (war risk premiums and ransom payments up ten-fold respectively), naval patrols, security equipment, piracy protection, vessel re-routing and other indirect costs such as higher food prices in East Africa.

“What is even more disconcerting,” asserts One Earth Future Foundation researcher, Anna Bowden, “is that all these are simply treating the symptoms – almost nothing is being done to treat the root cause.”

Scrutinising the problem in three major affected areas – the Horn of Africa, Nigeria and Malacca Straits – the study suggests the biggest cost, some US2.4 billion, lies in re-routing ships from risky areas.

Bowden estimates the total cost of piracy has increased roughly five-fold since 2005.  The average ransom last year was around US150 000 in 2005.

The study finds that the 20% drop in Suez Canal traffic over the past two years cannot be ascribed solely to piracy, but rather to the global economic crisis, though it is thought around 10% of shipping is avoiding the area due to the threat of ocean banditry.

Some 1600 incidents of piracy have been recorded since 2006 with the loss of 54 lives, while 1181 hostages were captured in 2010, 1016 of them by Somali pirates.

Of the 53 vessels seized worldwide last year, all but four were Somali pirates.