Administered prices study on economic inputs: ports, rail, water: executive summary

Abstract

This report examines the prices of goods and services provided by entities owned by the South African government in water, rail and ports. Prices in these three sectors are referred to as 'administered' due to the public ownership of the entities providing them. Furthermore, each sector provides important economic inputs for firms and consumers in the rest of the economy. Their pricing conduct and behaviour therefore has a major influence on the competitiveness of the economy as a whole and of the alignment between the productive side of the economy under public ownership and government economic policy. A study of administered prices originated as one of the tasks agreed to by all parties in commitments made at the 2002 Jobs Summit. The matter was, however, dormant until it was placed on the 2006 Programme of Action for attention by the National Treasury. In accordance with the commitments made at the Jobs Summit a study of administered prices was adopted as a project for execution through Nedlac and funded by the Fund for Research into Industrial Development, Growth and Equity (FRIDGE). The motivation for undertaking this study on administered prices was to understand the impact of administered pricing on South Africa's competitiveness.