The Ports Regulator of South Africa (PRSA) recently announced its final decision on the key performance indicators (KPIs) that will be considered in terms of its new port efficiency incentive initiative.
Branded WEGO – the Weighted Efficiency Gains from Operation – its aim is to provide incentives for better performance.
Following consultation with the National Ports Authority (NPA), port users and other stakeholders, five KPIs were chosen to determine year-on-year port performance improvements.
These include ship turnaround time, vessel delay at anchorage, berth productivity, ship working hours and a ship productivity indicator (total TEUs handled divided by total hours in port).
This basket of KPIs will be reviewed annually in line with PRSA’s Multi-Year Tariff Methodology and each of the KPIs will be evaluated at a port level across the different cargo handling types.
PRSA chairperson Thabadiawa Mufamadi said that in the selection of KPIs under the new incentive initiative, those aimed at CAPEX implementation and/or maintenance were not considered as they were seen as falling outside of the scope of “operations”.
Under WEGO, the NPA will achieve up to 5% additional profit or loss for a 10% increase or decline, respectively, in year-on-year improvements of the five KPIs at South Africa’s commercial ports.
“The background to the initiative is that if we have more efficient port systems we will be able to spend less in the long run on ports, berths and infrastructure,” PRSA CEO Mahesh Fakir told FTW Online. “More efficiency from our port operators will benefit the country through the perception of its port systems which will bring in more business and satisfy customers at the ports.”
He pointed out that improved efficiency for port users would result in less wastage and an increase in investments in SA’s ports.
Fakir said that the incentives would be based on a composite score of the overall performance level rather than on a port-by-port basis. WEGO would not however set any performance target for ports.
Performance in 2017/18 will be used as a starting baseline for the initiative and increases or decreases in performance in 2018/19 will determine the WEGO profit or loss multiplier for 2019/20.
“Port users, in general, as well as the NPA are happy about the port efficiency incentive programme as our commercial ports have not been performing well in the past and there is a lot of anecdotal evidence to support this,” Fakir added.
