THE Solomon Island Ports Authority (SIPA) has implemented its new gazetted ports tariff as of 1st of September.
Chief Executive Officer (CEO) for Solomon Island Ports Authority (SIPA) Collin Yow, revealed this during a press conference held at his office yesterday afternoon.
Mr Yow said, the new tariff increase was gazetted on 1st of September since 1956.
“This is the first major port tariff increase since SIPA ‘s inception in 1956 and since independence. These new tariff rates are comparable to our neighbouring ports such as Port of Lae and Port Moresby.
“Prior to its implementation, SIPA did a comparison survey with the regional ports only to find that Solomon Islands had been charging the lowest rates in the region,” Mr Yow said.
Mr Yow explained to the media not all tariff rates have increased.
“It has to be clarified that not all tariff rates were raised. The rates were raised to be on par with other regional ports are primarily pilotage charges, berth age, tonnage dues and container storage.
“These charges are only applicable to foreign vessels. Concessions are given to foreign vessels. Under the new tariff, SIPA has waived anchorage fees for vessels waiting to berth. SIPA is giving away approximately SBD 2 million by not charging anchorage fees,” Mr Yow explained to local media yesterday.
However he explained that SIPA has recognised and values the importance of local shipping industry and under the new tariffs, locally registered vessels rates have been reduced by 12 percent. SIPA’s new tariff is a fair and equitable one.
“I wish to point out a few facts and also elaborate why the new tariff is relevant and how SIPA will use its revenue. For many years, the Ports had struggled to meet their commitments based on the old tariff.
“Infrastructure, facilities and equipment have run down and aged due to lack of funds to replace or upgrade them thus causing productivity issues. Many revenue streams which should belong to the ports were either not paid or paid minimally resulting in substantial loss of revenue. The new tariff rates are not excessive. It is aligned to other ports in the region,” Mr Yow said.
He also explained that there have been a few protests by some shipping lines regarding the new tariff rates but SIPA will not tolerate anyone.
“Our tariff rates have to be read in context relative to the value of goods and their associated freight charges. For example freight charges per 20ft/40 ft container from Australia to Honiara is 25,000/44,000 respectively plus charges of 4,500/9,000 respectively.
“These are revenue that the shipping lines charge. SIPA’s tariff rates are relatively Insignificant compared to the shipping and clearance charge,” he said.
“The recent initiative by some shipping lines to levy a congestion fee of 1,780/1,550 per container. The shipping lines justified this as being a recovery of costs. Similarly, SIPA has to recover its costs of providing the ports facilities and infrastructure to port users.
“The revenue raised from the tariff is earmarked to fast track port infrastructure works and equipment in preparation for the new wharf and the replacement of old equipment. The road works at the international and domestic ports are to be upgraded.
“A facelift is required for the domestic port as well as the repair of old jetties and the project to build 3 new jetties which is estimated at $16 million each,” he explained.
“The loss of revenue in past years had weakened the ports sustainability into the future. If this is not addressed, the ports will remain in a state of disrepair due to lack of funds to improve its infrastructure.
“A crucial part of SIPA’s reform is in addressing the issue of an ageing workforce. A recruitment drive of employing 80 new employees most of them under the age of 30. This number is due to increase in the near future. Through increased revenue, primarily via its new tariff, SIPA intention is to increase employment for the people of Solomon Islands. This requires funding,” Mr Yow said.
“SIPA pays an above average wage and provides free lunch to its employees. This is expected to be self-funded from port revenue.
“SIPA is making it clear that all services provided by the ports have to be paid for. The revenue will enable SIPA to provide better port facilities such as roads, lighting , wharves and jetties ; making it safe and an enterprise that Solomon Islanders can be proud of,” Mr Yow concluded.
By DENVER NEWTER