Acsa asks for 132% fee hike

[daveza]

http://www.fin24.com/articles/default/display_article.aspx?ArticleId=1518-24_2564755

Johannesburg - The Airports Company of South Africa (Acsa) has applied for a 132.9% tariff increase, it said in a statement on Thursday.

"Our tariff application is simply based upon common financial principle of return on investment (ROI)," said Acsa executive finance director Priscillah Mabelane.

"Allowing Airports Company SA to levy the proposed tariff increase of 132.9% for the 2010/2011 financial year will enable the company to reward its investors adequately for their investments," she said.

"Like Eskom, Acsa is calling on users of its airports to fund its financial shortfall,"

Why does that last line really get up my nose...

Sounds like someone didn't do their homework and suddenly they need a 132% increase to give the investors what they were promised .

132% ?

Hell why stop there - 200% is a nice round figure.

 

[sox63]

One would think they would charge the airlines more for operating in their airports!

 

[Natas]

Why don't they just confiscate and sell all the stuff that their staff steals from your bags!??!

@ Sox 63... thats essentially what they will do.. the problem then is that the airlines will pass this escalation on to passengers.. all of a sudden it'll cost you R500 to fly to Cape Town.... with an airport tax of like R2000!

 

[Blaze786]

SO now we pay for ACSA investor bonus's as well!

 

[bwana]

Isnt it bad enough that the pseudo-taxes are already higher than the fares?

If they need more money they can start by taking back whatever they paid in architect fees for JNB/ORT airport.

 

[Kosmik]

Allowing Airports Company SA to levy the proposed tariff increase of 132.9% for the 2010/2011 financial year will enable the company to reward its investors adequately for their investments," she said.

What a great company to invest in! Even if it flops, goes bankraupt, they'll bail it out and pay there investors a divivdend! Sign me up!

 

[daveza]

I wonder what they mean by ' adequately ' ...

Would a 50% increase not reward them adequately enough ?!

 

[zippy]

These figures are unbelievable. Here in the UK, they wet themselves when someone suggests 1%

Unlike electricity, air travel is to a degree, a discretionary expense. A lot of flights can be cancelled and meetings held over teleconference.

Ofc, you cant do your holidays over the telephone, so the tourist industry is going to get hit hard.

 

[daveza]

http://www.acsa.co.za/home.asp?pid=53

In the last five years, ACSA paid dividends in excess of R2 billion to its shareholders, 74,6% of which went to the main shareholder, the South African government, the government also received an additional R1,3 billion in taxes from ACSA in the period.

The remarkable growth of commercial revenues as a proportion of total revenues has contributed significantly to ACSA’s financial success over the years.

In the financial year ended 31 March 2008, commercial revenue grew by 23% to R1,342 billion.

 

[Hosehead]

Shocking

The Airports Company South Africa's (Acsa's) request for a 133 percent increase in passenger charges is due to over-spending, particularly on "an unnecessary airport"at La Mercy to replace the existing Durban Airport and threatens growth in the tourism industry and other airline travel, according to Yasas Sri-Chandana, chief financial officer of Comair.

In a statement issued on Wednesday Chandana, who is also on the committee of the Airlines Association of Southern Africa (AASA), said that although Acsa - like Eskom - was calling on users of its airports to fund its financial shortfall it had achieved profit margins of more than 24 percent in the past few years and had paid "billions of rands worth of dividends to its shareholders”, who include the government, the Public Investment Corporation and Acsa management."Acsa fees that impact on air ticket prices include the passenger charge, landing fees and rentals, cumulatively amounting to R81 per passenger per single trip.”

"The proposed increases would take these charges up to over R185 per passenger. When you consider that a low cost flight between Johannesburg and Durban costs on average only R300, Acsa charges will make up more than half the cost of a ticket."

 

[DSTVUser]

From ACSA's "Company Profile" page

ACSA was formed in 1993 ...

In 1998, ACSA ...

ACSA was established as a public company under the Companies Act of 1973 as amended and the Airports Company Act of 1993 as amended. While ACSA is majority owned by the South African government, the Company is legally and financially autonomous and operates under commercial law.

In 1998, ACSA was partially privatised when 25,4% shareholding was sold ....

In 2005, the 20% foreign shareholding was sold to a South African investment company, by which time the Company’s value had grown to about R8 billion. Today, ACSA continues to represent a valuable investment to its shareholders. ​

(I've stripped-out the boring bits and highlighted what I though were the best bits)

Interesting reading in the context of the announcement / request for "tariff adjustment"...

sidenote: does anyone know how I can start my own company and charge my customers "taxes"?...

 

[daveza]

The major shareholder is the government and the government gets its funds from the taxpayer.

So what they are saying is they want to give us lots of money.

Don't know why I didn't pick that up earlier.

 

[DJ...]

"Allowing Airports Company SA to levy the proposed tariff increase of 132.9% for the 2010/2011 financial year will enable the company to reward its investors adequately for their investments," she said.

It's 3/4 owned by government. WTF are they on about? They want government to thumbs-up their increase, that goes straight back to government? Sorry but this is just ridiculous - in private sector corporate governance, that's called a conflict of interest. More than just that, a 132% increase is plain absurd - you fire the entire board of a private sector organisation that needs this to stay afloat. CEOs in the private sector would resign before making such statements.

What these imbeciles continually overlook is that state-owned entities are not revenue-generators (or at least they shouldn't be)...

 

[DJ...]

To add to this, this is becoming ridiculous wrt the funding limitations of today's public sector EXCO member. FFS, it is not necessary to raise prices to fund capital expansion projects. If the project will realise an ROI, then raising finance for these projects shouldn't be much of an issue (unless of course you're a piss-poorly run company, which is probably the case here). Private capital funding is a big market, especially with government guarantees in place. These public sector service providers need a rather swift kick up the arse now - this is getting beyond a joke...

 

[daveza]

I'm confused ( again )..

This from the Acsa site:-

Our success as a commercial, world-class, globally competitive company is a model for successful privatisation. ACSA is a prime example of how an innovative, private-enterprise undertaking can emerge from a loss-making, state-run institution.

So they are private, their major shareholder is the state and competition is not allowed ?

How exactly does this make them private ?

 

[DJ...]

They sold a portion of the float to management, PIC, BEE consortiums and Aeroporti di Roma. Aeroporti di Roma own 20%, the state owns 75%, and the others share the rest. They're still represented by the state predominantly. The 20% Aeroporti di Roma stake is a ruse imho. They call it a partial privatisation but there's nothing private about it...

 

[sox63]

Now we know how the treasury plans to make up for the short fall in tax collections.

IMO, the tax revenue collection is going to flatten out from now on, and the state has realised that to fund their obligations, they must find new sources of revenue, OR simply raise the revenue they already have by increasing rates.

 

[MidnightWizard]

HOMEWORK

They sold a portion of the float to management, PIC, BEE consortiums and Aeroporti di Roma. Aeroporti di Roma own 20%, the state owns 75%, and the others share the rest.
They're still represented by the state predominantly. The 20% Aeroporti di Roma stake is a ruse imho.
They call it a partial privatisation but there's nothing private about it...

You need an update -- Aeroporti di Roma -- sold their shares some time ago

GUESS who they went to (the ANC shadow fund raiser)

OK -- look it up and tell us the "REAL" answer

Now I am guessing that if there is a problem THERE then this is VERY serious and a smoking gun that someone should be looking at.


Apart from the Elastic / Plastic budget of the new La Mercy airport ( and other over budget expenditures )

PLEASE some clever and knowledgeable CA MBA look into this


Try looking up some of the ACSA BOND issues

Screwed by the "Unholy Alliance" AGAIN

[EDIT]

Weellll anyway -- here for ALL you LAZY guys -- and those that do not read my posts ( and do not know what they are missing )

A slight bit of googling

La Mercy too EXPENSIVE and a Black Elephant

"The clearest example is the new La Mercy Airport in Durban, which will have cost more than R7 billion when the original proposal was R3bn.
The current Durban Airport is perfectly functional and has significant growth capacity"

Now THIS really makes my blood BOIL

The ORIGINAL budget was for about R1.8 Bill

WHERE were you useless @rseh0les when the EIA was conducted -- when so few of us fought so hard to stop this INSANITY.

WHERE were you @rseh0les

STFU you never said a word when you could.

WHERE were ALL the useless passengers -- good I hope you pay through your @RXXES

I hope ALL your useless airlines go bust as well as BARSA and SAA.

I hope everyone STOPS flying useless F-SUKKERS

Sue Botes, the commercial manager of British Airways in South Africa,
said
the airline periodically reviewed the situation in response to requests from Durban,
but had not yet found any reason to provide a direct service there.

BA was at the BARSA conference at ZIMBALI
WTF did you NOT say anything then.
I hope your CEO gets the chop.

PIC buys Acsa stake for State pension fund

Another sad moment for SA -- and STILL the talking media heads go on about 2010

NO excuses -- you all deserve what you gonna get
[/EDIT]

MW

 

[DJ...]

You need an update -- Aeroporti di Roma -- sold their shares some time ago

You're 100% correct. I see they sold their stake in 2005 to PIC for what looks to be a discount as well. That means that it is a 100% state-owned entity again - they cannot refer to themselves as privatised in any way whatsoever. The only private portion is held by management which is a negligible figure. In fact PIC have an effective controlling stake in PIC - massive conflict of interest here. What ever happened to ACSA's proposed public listing?

Regarding their bond issues, ABSA issued a R1.1bn bond in March this year but I can't find the prospectus so not sure what the 'Use of Proceeds" clause indicates it's being used for. Not sure how they can claim to have a funding shortfall considering the bond issues. It merely points to the company being run piss-poorly. How do the bond investors not hit panic mode when statements such as the one in the OP is made? It indicates massive cash flow issues which are the cornerstone of the bond's performance. I'd like to know who the investors in the ACSA bonds are - I'd bet they know a lot more than your average Joe (or reporter) about this issue. It's a pity it's a private placement...

 

[JK8]

I know a few of the guys at ACSA... they a bunch of clowns, mostly the finance guys.