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The Democratic Alliance (DA) is concerned about the Airports Company of South Africa's (ACSA) proposed 132.9% tariff hike in order to "enable the company to reward its investors adequately for their investments." This place a further burden being placed on the already stressed consumer, and the decision is particularly problematic given the reasons that ACSA has used to justify the hike.

ACSA has denied that the tariff hike was necessitated by a funding shortfall due to accelerated infrastructure development for the 2010 World Cup as they were able to secure loans to cover this. This is misleading - acquiring a loan results in the ancillary responsibility of re-payment. ACSA may indeed have been able to successfully borrow money, but they do not appear to have the funds to pay this money back, thus presumably necessitating the tariff hike.

The need for a tariff hike may also have been caused by the R1.7-billion cost overrun experienced due to the construction of La Mercy Airport in Kwazulu-Natal. Instead of placing the burden of the construction of this airport on the consumer, ACSA should rather consider allowing Durban International Airport to be sold to highest bidder and funds used to offsetting some of the capital against La Mercy.

The Minister of Transport must look at various options in order to ensure that ACSA has sufficient funding:

A large cash injection from the 2010 World Cup infrastructure fund
Lifting the moratorium on the sale of ACSA shares
Allowing ACSA to consider listing on the JSE
Taking over some of the loans entered into by ACSA for its development projects by the state to alleviate the burden on ACSA
The returning dividend funds derived as the major shareholder in ACSA

Also, the model and the methodology of determining the tariff by the Economic Regulator needs to be re-examined. The current regulator is of a temporary nature and only meets on an ad hoc basis. Legislation needs to be passed making it a permanent structure and its mandate widened to include long term interests of the airline industry.

The DA will be posing further questions on the matter and will be writing a letter to the Minister of Transport calling for an industry lekgotla to discuss alternatives to the proposed tariff hike.