COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case Number: 52/IR/Sep01
In the matter between:
South African Fruit Terminals (Pty) Limited Applicant
and
Portnet First Respondent
Capespan (Pty) Ltd Second Respondent
International Harbour Services (Pty) Ltd Third Respondent
Fresh Produce Terminals (Pty) Ltd Fourth Respondent
REASONS AND ORDER
INTRODUCTION
This is an application for interim relief brought by South African Fruit Terminals (Pty) Ltd in
respect of a complaint lodged by it with the Commission on 19 September 2001, against Portnet,
Capespan, and its related companies. The applicants allege that the respondents are engaged in
practices prohibited by Chapter 2 of the Competition Act, 89 of 1998. More specifically, the
applicants allege that the respondents are contravening the provisions of sections 5(1),
alternatively 5(2) 1, alternatively 8(b), alternatively 8(c), alternatively 8(d)(ii), alternatively 8(d) (iv),
alternatively 9 of the Competition Act.
1 It appears that the allegation of a section 5(2) contravention was made in error.
1
The Parties
SAFT
The applicant is South African Fruit Terminals (Pty) Limited (“SAFT”), a
company incorporated in South Africa, which provides agency and logistical
services for the export of citrus and deciduous fruit from South Africa. SAFT is
controlled by SAFT Europe BV in Rotterdam, the Netherlands. The ultimate
ultimate controlling shareholders are Seabrex Rotterdam BV of the Netherlands
and the SeaInvest Group of Belgium.
Portnet (Transnet)
The first respondent is cited as Portnet, (“Portnet”) and is merely an operating
division of Transnet Limited (“Transnet”). It is the latter which is the registered
owner and/or operator of all port facilities in the ports of the Republic of South
Africa, specifically, Durban, Cape Town and Port Elizabeth. Transnet had no
objection to the incorrect citation and we allowed the applicant to amend the
citation. Transnet was formed in terms of the Legal Succession to the South
African Transport Services Act No. 9 of 1989 and became the legal successor to
the South African Transport Services (“SATS”). It thus inherited all its rights and
obligations vis àvis existing agreements as well as those under the old harbour
regulations in terms of which SATS controlled the ports. It further acquired
ownership of all movable and immovable property previously owned by SATS.
Transnet is specifically designated as the port authority in terms of various Acts.
It owns, controls, manages, maintains and exploits the harbours of Table Bay,
Durban and Port Elizabeth. For convenience all the parties herein have
throughout the proceedings referred to Transnet as Portnet and we, likewise,
adopt this approach in this decision.
Capespan
The second respondent is Capespan (Pty) Ltd (“Capespan”), the largest export
Capespan
The second respondent is Capespan (Pty) Ltd (“Capespan”), the largest export
agent and logistics service provider in the fruit export market. It has been trading
since 1999 when it acquired the operations of Unifruco and Outspan and their
associated subsidiaries. The latter two companies are now Capespan’s principal
shareholders, each holding 34.29% of its issued share capital.
2
IHS
The third respondent is International Harbour Services (Pty) Ltd (“IHS”).
IHS was originally incorporated under the Companies Act No. 61 of 1973,
its entire issued share capital being registered in the South African Co
operative Deciduous Fruit Exchange Limited (which later became known as
“Universal”). It was brought into existence to handle deciduous fruit
exports at arm’s length from the Deciduous Fruit Board (“DFB”). 2 When
Unifruco took over the position of marketing agent for deciduous fruit from
the DFB in 1991, Universal sold and transferred its entire shareholding in
IHS to Unifruco, which became a whollyowned subsidiary of Unifruco.
The shares in IHS were subsequently transferred to Capespan on 1
January 1999. 3
IHS is entitled to conduct certain cargo operations, including handling of fresh
fruit at Table Bay Harbour, by virtue of an agreement concluded with Transnet in
1993.
FPT
The fourth respondent is Fresh Produce Terminals (Pty) Ltd (“FPT”), a subsidiary
of Capespan, held via an intermediate company, Fleurbaix (Pty) Ltd. At present,
FPT operates as the managing agent of Capespan and IHS. 4
By virtue of the sharing of premises and certain common directorships between
the various companies, the applicant contends that the second to fourth
respondents constitute one economic entity. They therefore refer collectively to
all the respondents as “Capespan”. Portnet concedes that Capespan, IHS and
FPT are in effect one and the same economic unit or “combined respondents”. 5
Capespan contends that although Capespan, IHS and FPT conduct their
businesses as part of the Capespan group, they do not form one economic
entity. Nevertheless, it has been accepted by all parties that “Capespan” be
used to refer to the three respondents for the sake of convenience 6. We will also
used to refer to the three respondents for the sake of convenience 6. We will also
follow this approach throughout these Reasons.
2 Second to Fourth Respondents’ Answering Affidavit p 410
3 Record page 398.
4 The parties state that Capespan wishes to restructure all its port assets by vesting them in FPT
and to attract an overseas investor thereto. Negotiations are underway between Capespan and
Portnet to assign the requisite rights and obligations to FPT under existing agreements.
5 Record page 27.
6 Capespan first set of Heads p 4.
3
BACKGROUND
History of the Litigation
On 19 September 2001 the Applicant lodged a complaint with the Competition
Commission against the respondents.
Simultaneously, on the 19 September 2001 the applicant launched an application
for interim relief against the respondents. Lengthy papers were filed by all the
parties and the matter was only set down for hearing on the 13 December 2001.
The hearing lasted one day and was then resumed on 1 st and 2 nd February
2002 and again on the 4 th and 5 th March 2002.
The issues in the case
South Africa currently exports approximately 1.4 million pallets of deciduous,
citrus and subtropical fruits per annum. 7 Historically, the export of South
African fruit was controlled by the Deciduous Fruit Board and the Citrus Board.
South African fruit was marketed abroad by agents of the various Control Boards.
Capespan is the effective successor to one such control board that was the
single channel marketer of the SA fruit industry. As the only company acting as a
marketing agent for South African fruit, it enjoys long lease agreements with
Portnet in respect of the various South African ports. 8
In particular, Capespan is the inheritor of a long lease in respect of the Cape
Town port. and through such lease benefits economically from the lease insofar
as Iit is entitled to use the leased premises, as well as B, C, and D berths on a
longterm basis. In return, it pays a market related rental to Portnet for the
quayside and existing sheds. 9
Both SAFT and Capespan provide logistical services for the export of citrus and
deciduous fruit to overseas markets. In its capacity as export agent, Capespan
acts as middleman between producers and foreign fruit purchasers and provides
7 Page 16. A pallet comprises one ton of fruit, packed into cardboard boxes.
8 There was much dispute in the matter as to where certain of these leases now reside, as due to
restructuring within Capespan, certain of these leases held historically by other related entities
are now in the process of being ceded to it. For the purpose of our decision, however, the
present location of the leases is not pertinent.
9 Just before the commencement of the first set of hearings, the applicants procured a Deed of
Cession by and between Unifruco and Capespan executed by Unifruco on 22 January 2001 and
by Capespan on 23 November 2000 and approved by Portnet on the 5 th May 2001. In terms of
this Deed of Cession, all rights, title and interest of Unifruco in the Cape Town quayside cold
storage facility were ceded, assigned and transferred to Capespan. (Record page 870).
4
agency services in this regard. It however also logistical and other service
functions to itself and other export agents. SAFT only provides logistical services
to export agents and in this regard, is the competitor of Capespan. This entails
logistical (chain) management of the entire export process. SAFT has been in
existence for approximately 3 years and allegedly has a 30% market share of the
logistic services market. 10 There are no other competitors other than Capespan
and SAFT which provide this specialised service.
The citrus and deciduous fruit market can be broken down into two segments,
sterilised (“steri”) and nonsterilised (“nonsteri”). The distinction comes about,
not because of any intrinsic difference in the products, but because of the health
requirements of the country to which the fruit is exported. Countries whose
phytosanitary health requirements place them in the sterilised fruit market, are
distinguished by the fact that they impose a more rigorous control regime on the
exporting country, (which has to certify fruit as being of the sterilised category), in
the language of the industry, “to ensure the integrity of the cold chain.”
The practical effect of the distinction for the purpose of this case, is the different
manner in which the fruit is handled at the ports by logistic service providers.
Fruit that meets the sterilised fruit standard has to be loaded from a cold storage
facility located at the quay; non–sterilised fruit may be stored in a cooling facility
that is located away from the quay and, as is the case with the applicant, this
facility need not be located on the port premises i.e. the property controlled by
Portnet.
Capespan is active in both these markets. It, or entities it controls, have long
term leases with Portnet at Cape Town and Durban harbours which have
enabled it to construct a quayside storage facility at both harbours from which it
enabled it to construct a quayside storage facility at both harbours from which it
handles both sterilised and nonsterilised fruit. This location means that it is able
to handle sterilised fruits, an advantage none of its rivals has.
In relation to nonsterilised fruits, its arrangement with Transnet is also different
to that of its rivals, in that it can load its non–steri from its quayside facility thus
obviating the necessity to have to enter into an extensive arrangement with
Portnet for access to the quayside and use Portnet labour. It does however pay a
royalty to Portnet at R7.83 per pallet in Cape Town and R1.93 in Durban.
As mentioned, SAFT presently competes against Capespan in the nonsteri
market for the provision of logistic services to export agents and has been doing
so since 1999 when it entered the market. 11
10 Record p 154
11 Record page 16.
5
SAFT does not compete in the steri market although it wishes to do so. At the
moment it claims it is unable to do so because it does not have access to
quayside cold storage facilities, which it alleges is an essential prerequisite to
enter this market.
It states that in order to enter the market either of two things needs to happen –
1. Portnet should lease it appropriate space at the quayside so it could have
an arrangement similar to that of Capespan; or
2. Capespan should be required to lease it part of its existing facilities .
It alleges that neither has been willing to enter into such an arrangement and that
each has pointed a finger at the other as the cause of the applicant’s
predicament . For this reason SAFT seeks relief in the form of temporary access
to an essential facility against Capespan. (Prayer 6.1 in the original Notice of
Motion, prayer 3.1 in the amended notice of motion )
As ancillary relief it seeks the excision of certain clauses in the leases that
provide for the exclusive use by the respondents of the quayside cold storage
facilities. .
It further complains that it is not able to compete on an equal footing with
Capespan in the nonsteri market because Portnet’s arrangement with it is less
favourable than the arrangement it has with Capespan. This discrimination raises
SAFT’s costs in comparison to that of Capespan. It alleges that Capespan’s
response has been to lower its fees in the nonsteri market, to a level where
SAFT cannot make a return and has crosssubsidised this by increasing its fees
in the steri market, where it is not subject to competition.
Portnet, as a dominant provider of quay loading facilities, is obliged to treat it in a
nondiscriminatory fashion – it has not done so and hence SAFT argues that it is
entitled to the relief sought under the heading quayside services. These prayers
for relief are designed to level the playing fields so that it can continue in the
market.
for relief are designed to level the playing fields so that it can continue in the
market.
The relief sought by SAFT against both Capespan and Portnet in respect of
access to the cold storage facilities has undergone a major shift during the
course of this case. in relation to the essential facility. Prayers sought primarily
against Portnet in respect of access to the multipurpose terminals, the access to
the quayside service claim, have also evolved, although less dramatically. For
this reason it is convenient to set out below the changes in the relief sought, and
when they were sought, as the evolution is relevant as becomes apparent later
6
on, especially when it comes to the issue of costs.
The Nature of the Relief Claimed
The applicant, in its original Notice of Motion, sought an order in the following
terms:
1. that Portnet allow SAFT to conduct its own Quayside services against
payment by SAFT to Portnet of a royalty of R7.82 or such other royalty
payment currently paid by any of the other respondents to Portnet for
such right;
2. that all provisions in the Lease Agreements and other relevant
agreements between Portnet and the other respondents which expressly,
tacitly or by implication reserve or provide for the exclusive use by any of
the respondent of the Quayside Cold Storage Facilities in all the relevant
ports of South Africa be varied and/or expunged from these agreements;
3. that Portnet makes available to SAFT an area constituting at least 30% of
the Quayside Cold Storage Facilities in all the ports in South Africa 12 for
the purpose of arranging, managing and/or exporting produce to foreign
destinations on behalf of its clients;
4. that SAFT pays to Portnet 30%, or a proportionate equivalent, of the sum
currently paid by the respondents to Portnet for the use of and access to
each of the Quayside Cold Storage Facilities in the relevant ports of South
Africa;
5. that Claimant pays to the relevant respondent/s, on a monthly basis, 25%
of the cost incurred by such respondent/s in regard to the running
expenses of the various Quayside Cold Storage Facilities , alternatively a
sum to be determined by the Tribunal which will adequately reimburse the
respondent/s for such running costs;
ALTERNATIVELY TO PRAYERS 2 TO 5
6.1 the second to fourth respondents be compelled to allow SAFT access to
at least 30% of the Quayside Cold Storage Facilities in all the ports in
South Africa for the purpose of arranging, managing and/or exporting
produce to foreign destinations on behalf of its clients; and
produce to foreign destinations on behalf of its clients; and
12 All claims were abandoned with respect to Durban and Port Elizabeth as explained above.
7
6.2 that SAFT pays to either of the second to fourth respondents 30%, or a
proportionate equivalent, of the sum payable by such respondent/s in
respect of its leases of such Quayside Cold Storage Facilities with
Portnet; and
6.3 that SAFT pays to second to fourth respondents , on a monthly basis,
25% of the costs incurred by such respondent/s in regard to the running
expenses of the various Quayside Cold Storage Facilities , alternatively a
sum to be determined by the Tribunal which will adequately reimburse the
respondent/s for such running costs.
7. Costs of the Application; and
8. Further and/or alternative relief .
At the first hearing, it transpired that SAFT was only requiring use of the cold
storage facility situate at Berth D in Cape Town. The respondents took the view
that they could not proceed with their arguments until they (the respondents)
received clarity on the relief which was being sought by SAFT. The Tribunal
accordingly requested SAFT to reformulate its prayers specifically with regard to
the access point. The matter was accordingly adjourned until February 2002 to
enable SAFT to file a supplementary affidavit reformulating its prayers for relief,
which it duly did.
In its Notice of Intended Amendments to Prayers, filed on 14 January 2002, the
Applicant requested an order in the following terms 13:
QUAYSIDE SERVICES
1.11 that Portnet allow SAFT to conduct its own Quayside services against
payment by SAFT to Portnet of a royalty payment as is currently made by
either Second and/or Third and/or Fourth Respondent to SAFT for the
same right.
1.2 that SAFT be ordered to pay to Portnet in addition to such royalty, an
amount per pallet, alternatively an amount per square metre, as the
Tribunal deems reasonable, for the intermittent and nonexclusive use of
Tribunal deems reasonable, for the intermittent and nonexclusive use of
the Quayside area adjacent to the Quay Apron required by SAFT for the
effective provision of logistic services.
1.3 In the alternative to 1.1 and 1.2 above, the Tribunal orders that Portnet
13 Record page 895.
8
reduces its charges to SAFT, current R50 per pallet in Cape Town and
R52,50 in Durban, to a level which , in the view of the Tribunal, is non
discriminatory, fair and reasonable in the circumstances.
2. LEASE AGREEMENTS
2.1 that all provisions in the Lease Agreements and other relevant
agreements between Portnet and the other respondents which expressly,
tacitly or by implication reserve or provide for the exclusive use by any of
the respondents of the Quayside Cold Storage Facilities in all the relevant
ports of South Africa be varied and/or expunged from these agreements.
3. ACCESS TO AN ESSENTIAL FACILITY
3.1 that First Respondent and/or Second Respondent and/or Third Respondent
and/or Fourth Respondent allow SAFT effective access to an area
constituting at least 30%, or, alternatively, such percentage as the
Tribunal deems appropriate, of the Quayside Cold Storage Facilities in all
the ports in South Africa for the purpose of arranging, managing and/or
exporting produce to foreign destinations on behalf of its clients; and
3.2 SAFT pays to Second or Third Respondent a proportionate equivalent
(commensurate to the rights attached to and period of time of such access) of
the lease payments currently incurred by Second or Third Respondent having
regard to the square metre area of the Quayside Cold Storage Facility to
which access is awarded by the Tribunal, alternatively an appropriate sum
determined by the Tribunal for such access; and
3.3 That SAFT pays to Second or Third Respondent on a monthly basis 25% of
the aforesaid lease payment determined in paragraph 3.2 above, in order to
reimburse Second or Third Respondent for any other cost it may incur in
respect of the area to which access is awarded by the Tribunal to SAFT (in
terms of paragraph 3.1 above) during the period of access of such area by
terms of paragraph 3.1 above) during the period of access of such area by
SAFT; alternatively a sum to be determined by the Tribunal which will
adequately reimburse the relevant Respondent /s for such costs; and
3.4 Such other terms and conditions of access as the Tribunal deems
appropriate.
4. Costs of this Application.
5. Further and/or alternative relief.
9
The nature of the relief claimed changed yet again on the final day of hearing.
SAFT abandoned its claims against Capespan contained in prayer 3, with the
exception of prayer 3.4. and the question of costs. It therefore requested the
Tribunal to make an order in terms of prayer 3.4 only. SAFT made a proposal as
to how we should formulate this relief which we deal with more fully below when
we consider the case against Capespan. What is relevant to note at this stage is
that SAFT did not propose a formal amendment of the notice of motion arguing
that this could be accommodated in terms of the existing prayer 3.4. As against
Portnet, it abandoned its prayer 2 but persisted with prayer 1, in respect of the
quayside services at the multipurpose terminals. 14
It is common cause that we may confine ourselves to the relief sought by SAFT
on the final day of argument.
EVALUATION
Legal Issues
Standard of proof required for an interim relief application
Section 49C(3) of the Act states:
‘In any proceedings in terms of this section, the standard of proof is
the same as the standard of proof in a High Court on a common
law application for an interim interdict.”
It is important to note that the section mandates the application of the common
law “standard of proof”, for an interim interdict, but not the common law
requirements for an interim interdict. 15
The requirements for an interim interdict in terms of section 49C are set out in
section 49C(2)(b) and are similar to the requirements for an interim interdict at
common law:
“The Competition Tribunal
may grant an interim order if it is reasonable and just
to do so, having regard to the following factors:
(i) The evidence relating to the alleged prohibited practice;
(ii) the need to prevent serious or irreparable damage to the
14 Pages 1618 Transcript 5 March 2002. This latter change casts doubt on whether SAFT did in
fact abandon relief in relation to the ports of Durban and Port Elizabeth.
15 York Timbers Limited and SAFCOL 15/IR/Feb01
10
applicant; and
(iii) the balance of convenience.”
The standard of proof required is less exacting than the civil burden of a balance
of probabilities. 16
Factual Issues
SAFT claims Portnet is discriminating unfairly against it in respect of the
multipurpose terminals (“MPT”) 17 it uses, relative to those charges levied
againstd to Capespan in respect of the leased quayside facilities that it uses.
While not abandoning a claim under section 9, it frames its case primarily under
section 8(c) since there is some legal doubt as to whether this case, where the
services being compared are not equivalent transactions, could be sustained
under section 9, which envisages classic price discrimination between like
services. 18 The MPT through which the cargo handled by SAFT is shipped are
the E and F berths in Cape Town and L and M berths in Durban.
We have been mindful about how we should decide the matter. We have been
faced not only with the considerations of section 49D of the Act, but a veritable
minefield of other points either taken in limine or as part of the consideration of
the merits. 19 We have decided to approach our decision by deciding as limited a
range of issues as are necessary for us to come to a conclusion on whether it
would be competent to grant interim relief. The matter may well be referred to us
for final relief on a more extensive record and it would thus be inappropriate for
us to express a view on factual or legal issues that are not necessary for us to
decide at this stage. Because of this we decided to approach the matter from the
end rather than the beginning.
We have found that SAFT has not made out such a case for interim relief
and accordingly relief is denied against all the respondents. Our reasons
for this follow. Because it is convenient to do so, we have dealt separately
with the relief sought against Portnet and Capespan.
with the relief sought against Portnet and Capespan.
16 York Timbers Limited and SAFCOL 15/IR/Feb01 paragraph 43.
17 Defined as all berths, quay aprons and adjacent areas under Portnet from which different
commodities, including fruit, are exported. (Record page 11).
18 Transcript 4 March page 142. We need not decide this, as will be explained later.
19 The respondents took a number of in limine points at the commencement of the proceedings.
These included objections with respect to jurisdiction; nonjoinder; locus standi; retrospectivity
and expropriation.
11
CAPESPAN
The relief sought against Capespan is now limited to prayer 3.4:
“Such other terms and conditions of access as the Tribunal deems
appropriate.”
As stated above, the precise nature of the relief claimed was never formally
framed in terms of an order, nor did SAFT request an amendment thereof. SAFT,
in its oral address to us, asked, in terms not entirely clear to us, for an order that
Capespan be required to deal with it on a nondiscriminatory basis and on terms
no less favourable than those granted to its most favoured customers. The shift
in relief from that claimed in the original notice of motion and the amended notice
of motion is profound SAFT instead of seeking to be Capespan’s sublessee,
seeks to be its customer, treated on most favoured customer terms.
SAFT does not claim that Capespan is refusing to deal with it – rather that it is
only prepared to deal with it on terms that SAFT says would make it
uncompetitive in the steri market. The issue is the manner in which Capespan
calculates volumebased discounts to its customers. The discount structure does
not distinguish between steri and nonsteri produce and offers a discount based
on the aggregate of both. SAFT states that its steri volumes will never reach the
level at which it can obtain the maximum discount 20. The only way to do this
would be for it to give its nonsteri to Capespan, which would be pointless, or to
subsidise its steri customers. Neither alternative is viable. It wants, in effect, for
us to order that the discount structure for steri and nonsteri be calculated
separately.
Capespan opposes this relief. In the first place, they complain that at the
eleventh hour, when all the affidavits had been filed and after we had ruled that
we would accept no further affidavits from any party, SAFT has come with a new
case not contemplated on the papers. In the second place, a point which flows
case not contemplated on the papers. In the second place, a point which flows
from the first, they have not been given the opportunity to meet this new case
which is now about their standard contract when they had come to us to meet a
case which was about access to their facilities. They have thus not only been put
in a position where they do not know why their contract is objectionable, but they
also have not been afforded the opportunity to meet such a case by justifying its
terms.
We accept this argument. Whilst competition law recognises that volume
discounts may be applied in a discriminatory manner to raise rivals’ costs, they
are equally defensible on the grounds that they either raise no competition
20 Recall that the steri market is much smaller than the nonsteri.
12
concerns, or if they do, that they are premised on achieving efficiencies based on
those volumes. In this case, the lateness of the amendment has meant that
Capespan only knows of the case against it from submissions from the bar and
has not been given an opportunity to state its case in its filings.
SAFT seeks to persuade us that we have a wide discretion to award alternative
relief and that the order sought is contemplated in correspondence forming part
of the record. If the respondent had chosen not to deal with these issues it was
its own fault.
We cannot agree. The oblique mention of these issues in the welter of
correspondence forming part of this record does not excuse SAFT from making
its case. Whilst we do not take a formalistic approach in relation to amending
one’s relief, knowing what case you have to meet and being afforded the
opportunity to answer itthis is not a mere technical matter , it is about fairness.,
knowing what case you have to meet and being afforded the opportunity to
answer it Capespan has been afforded neither.
It is unclear whether SAFT is seeking to make out a new case for interim relief
based on a new prohibited practice or whether it is seeking to allege a different
form of relief for the prohibited practice made out in the papers. If it is the former,
then this prohibited practice has not been made out properly in the papers so as
to enablein order for Capespan to have been able to respond. If the latter, then
Capespan has still not been afforded the opportunity to respond. It does not avail
SAFT to say it could respond in the form of argument from the bar when, as we
have said, the facts are not properly before us. It is an express requirement of
section 49 C (2)(a) that the Tribunal must give the respondent a reasonable
opportunity to be heard. That right would be frustrated if we were to allow SAFT
the relief it seeks on the current papers.
We have been asked to grant this relief as part of our broader discretion to award
We have been asked to grant this relief as part of our broader discretion to award
an alternative form of relief in terms of prayer 3.4. That form of relief can not be
utilised as a cureall for a case not made out on the papers and we decline to do
so.
PORTNET
The relief sought against Portnet has changed. However, to the extent that it has,
it has not prejudiced them in the way that it has Capespan; it remains consistent
with the original relief sought. SAFT wants to be able to conduct its own quayside
services at the quay apron which it requires, as a logistic service provider, in
order to fulfil it obligations to export agents. The problem with this type of relief at
an interim relief stage is that it requires us to determine a price for Portnet’s
13
services on either formulation of the relief.
Both the evidence of costs that SAFT seeks to rely on for this prayer and its
methodology are placed in dispute. We cannot resolve this dispute on the
existing papers in SAFT’s favour. Firstly, the discrepancies about the amount of
costs and the methodology adopted for their calculation are of such a nature that
we cannot be certain that there is discrimination. Secondly, assuming there is, its
extent is uncertain and for that reason it is impossible for us to divine an
appropriate royalty or rental.
The difficulty is occasioned by the fact that we are not comparing like with like.
The lease agreement with Capespan means they have their own berth from
which they perform their quayside activities. This arrangement forms part of their
broader lease with Portnet and we are not satisfied that the applicant has made
out a case for extracting the economic value of its quayside services in a lease
agreement where this was not contemplated as a discrete cost.
Before analysing the glaring factual discrepancies in the evidence placed before
the Tribunal, it is necessary to highlight and be mindful of the obvious
peculiarities in the service relationship between Portnet and SAFT on the one
hand, and Portnet and Capespan on the other.
Firstly, Capespan exclusively utilises the berths, which are leased to them with
the cold storage facilities., T they do not occupy the multipurpose terminals at all.
Secondly, SAFT provides its own infrastructure, comprising IT services and
forklifts in Cape Town, but is not allowed to provide its own labour since Portnet
provides its labour. It therefore depends on Portnet for forklift drivers and
labourers who hook pallets onto the crane 21.
Thirdly, the underlying basis of the compensation is different. Portnet refers to
minimum volume guarantees required from Capespan on the berths it utilises,
which guarantees are not required on the MPT.
which guarantees are not required on the MPT.
Capespan is permitted by Portnet to provide its own infrastructure, namely IT
services and forklift operations, as well as its own labour force. In return for this
privilege, Capespan pays Portnet a royalty. It is common cause that the royalty is
payable for the reason that, unlike SAFT, Capespan undertakes its own quayside
services at the berths it leases. The royalty is designed to compensate Portnet
for the “lost opportunity” of generating a profit from rendering such services
itself.22 By contrast, the tariff that Portnet levies on SAFT is for the rendering of
21 Record page 1034
22 Portnet Heads page 33.
14
the aforesaid quayside services that Portnet renders on behalf of SAFT.
There is no doubt that Capespan does enjoy a somewhat privileged position vis
àvis SAFT in its relationship with Portnet. But whether this translates to
discrimination in respect of its tariffs levied is another question. There is an entire
history which could account for exactly why Capespan was able to negotiate
these royalties. Some, put forward by Portnet, suggestpose plausible
explanations: the lost opportunity to Portnet arising from Capespan conducting
these quayside services itself; the fact that Capespan has, over the years,
effected significant improvements at these berths which have become Portnet’s
property without due compensation to Capespan; the decision to allow
Capespan to conduct its own quayside services against payment of a royalty
agreed over 20 years ago when there were no other competitors in the fruit
export market; the imposition of certain minimum volume requirements on
Capespan at the berths leased to it. There is simply not enough evidence to
enable us to evaluate the circumstances under and basis on which the royalty
was determined.
The fact remains that we are not dealing with equivalent transactions. As Portnet
states:
“the act of levying a charge or tariff for the rendering of a service and the receipt
of a royalty for not doing so are two very fundamentally different concepts.” 23
We shall in any event outline SAFT’s analysis of the alleged price discrimination
in order to illustrate the insurmountable factual disputes before us.
Analysis of Costing and alleged Price Discrimination
SAFT states there are three components which comprise the cost of exporting –
royalty; rental; and labour. SAFT attempts to tease out the various three
components from the charges to it by Portnet and compare those elements with
components from the charges to it by Portnet and compare those elements with
similar charges to Capespan, in order to prove that price discrimination is
occurring relative to what Capespan is charged by Portnet. SAFT, seeks to
extrapolate rental and labour costs using various techniques and comparisons, in
order to prove the extent of the price discrimination against it by Portnet. It
employs this elongated method, since it is not clear ex facie the levied charges
precisely what is charges are to be attributed to each element.
Portnet charges SAFT a tariff for the rendering of the quayside services at the
MPT.24 SAFT states that it is charged an allinclusive tariff of R50 per pallet in
23 Portnet Heads page 33.
24 Such services on the quay apron comprise the offloading of fruit from the transport vehicles
15
Cape Town and R52.50 per pallet in Durban, for the provision of labour and a
rental in respect of the quayside. 25
(i) Royalty
SAFT maintains that there is a royalty charge to Capespan of R7.82 per pallet in
Cape Town and R1.93 per pallet in Durban. This royalty is paid in exchange for
the privilege of fulfilling their own labour needs in these ports, as more fully
described above.
(ii) Labour
SAFT has valued the labour component provided by Portnet at R13.20 per
pallet, based on various quotes from labour brokers to whom Portnet allegedly
outsources its labour requirements 26.
Initially, Portnet maintained that its labour costs were R54.32, but SAFT alleges
that they failed to recognise that there are 4 hatchets in a ship served by 4
gangs. Therefore, the actual per pallet labour cost of Portnet is in fact much
lower than they submit. 27 SAFT therefore constructs its own figure of what
Portnet’s labour costs would be, by taking Portnet’s avowed labour cost of
R54.32 per pallet, 28 and dividing it by 4, representing the number of hatches on
a ship which are loaded, to arrive at a figure of approximately R13.58 per
pallet.29
by way of a forkliftoperated by an operator; the placing of the fruit by forklift below the ship’s
crane; the manual hooking of the crane onto the pallet; the execution of various IT services in
conjunction with the aforesaid. (Record page 33).
25 Note that these figures are not disputed by either Portnet or Capespan. Between 1999 and
2000 this amount was rebated from R60.19 by R10 per pallet to compensate for the provision by
SAFT of its own IT tracking system and forklift equipment. Portnet maintains they were
incorporated in a tariff agreement with SAFT, concluded in May 2001, subject to a reduction on a
sliding scale for volumes exceeding 130,000 pallets. They therefore contend that SAFT has
waived its right to asserting price discrimination. (Portnet Heads at 17,41). SAFT however
waived its right to asserting price discrimination. (Portnet Heads at 17,41). SAFT however
maintains, as stated in correspondence by their attorneys to this effect, that in order to use their
harbour facilities, they were left with no choice but to pay the prescribed tariff. (Page 155 of
record).
26 Signal Hill quotes a rate of R13.20 per pallet (page 975 record).
27 SAFT Heads page 51.
28See Trevor Kotze’s affidavit (page 879 record). Computation at page 885(b).
29 On page 100 Portnet confirms that it does 28 pallet moves per hour per hook.
Further, on page 903, it states “in determining a reasonable rental as aforesaid
the Tribunal is advised that the loading activities of the claimant as currently
performed and as envisaged in the future, in respect of each ship worked, it is
accepted to constitute the loading through each of the loading vessels, four
hatches, at the rate of 28 pallets per hour”.
16
(iii) Rental
SAFT arrives at the rental cost by taking the total annual market rentals that
Capespan pays in terms of the lease agreement, for unimproved land for B, C
and D Berths, namely R6 016 182. Capespan utilises a total square metreage of
76 862 square metres, or R78.27 per metre. 30 SAFT divides the total rental by
the number of pallets put through per annum (450 000) to arrive at a figure of
R13.37 per pallet.
SAFT then multiplies the per metre charge by the 17 200 square metres it would
require in Eberth, therefore arriving at its total rental, approximately
R13,359 ,000. By dividing this figure by 100,000, which is the estimated pallets
SAFT exports per annum, SAFT arrives at its own per pallet rental figure of
R13.59 per pallet. SAFT therefore concludes that the appropriate rental should
be somewhere between R13.37 and a maximum of R13.59 per pallet. 31
Portnet gives no separate rental figure per se, but initially includes the quayside
rental in its labour calculation of R54.32 per pallet.
On this basis, SAFT sketches various scenarios based on each party’s evidence
of their costs, as described above, in order to attempt to determine the extent of
the alleged discrimination levied on it by Portnet, (amount overpaid) and to arrive
at a figure representing what a fair tariff would be.
SAFT’s initial estimates based on market related costs
CAPE TOWN: Rand Cost/pallet Current Portnet
Charge/Tariff
Current Portnet
Charge/TariffDBN
Labour R11.0432
Rental R 6.88 33
Subtotal R17.92 52.5034
Profit Margin (15%) R 2.69
30 Record page 951.
31 Record, page 951. (Transcript 2 February page 63).
32 Assuming 12 500 pallets are shipped per month, using 16 forklift drivers, 12 unskilled
labourers, 2 supervisors permanently employed on two shifts per day. (Record p 35, 148). The
lower labour figure SAFT arrives at is R9.44 per pallet. It later builds in an amount for
management and overheads. It uses the higher figure of R11.04 as an indication of its willingness
to accept any order the Tribunal will make.
33 Monthly rental cost for land adjacent to quayside is R86,000 divided by 12,500, again on the
assumption that this number of pallets is shipped per month. This per pallet cost comprises
equipment, overhead, rental costs and a profit margin of 15%. (Page 789 of record).
34 Initially a gross amount of R62.50, but then subject to a R10 rebate in respect of machinery
and equipment costs.
17
Total R20.61 50.00
Amount overpaid
CT
R29.39
DBN R31.89
SAFT estimate using Portnet Figures
CAPE TOWN: Rand Cost/pallet Current Portnet
Charge/TariffCT
Current Portnet
Charge/Tariff
DBN
Labour & Rental R13.5835
Royalty36 CT R 7.82
DBN R 1.93
Total CT R21.40 50.00 52.50
DBN R15.51
Amount overpaid CT R28.60
DBN R36.99
SAFT estimate using Capespan Figures:
CAPE TOWN: Rand Cost/pallet Current Portnet
Charge/TariffCT
Current Portnet
Charge/Tariff
DBN
Labour R13.20
Rental R13.59
Royalty37 CT R 7.82
DBN R 1.93
Total CT R34.61 50.00 52.50
DBN R28.72
Amount overpaid CT R15.39
DBN R23.78
By taking the figures which show the least price discrimination, SAFT concludes
that Portnet is charging, at the very least, an excess of approximately R15.00 per
pallet in Cape Town and approximately R23.00 per pallet in Durban.
SAFT therefore asks us to fashion an appropriate and fair remedy in accordance
with the these costings which it alleges are the true costs faced by Portnet and
Capespan. They point out that, in the case of rental and labour, these figures
represent the “high water mark” per pallet and the cost may in reality well be
significantly lower. 38 Notwithstanding these possibilities, they are prepared to
35 R54.32 divided by 4 gangs for 4 hatches.
36 Offered to Capespan in respect of its doing its own services.
37 Offered to Capespan in respect of its doing its own services.
38 In the case of labour, Portnet’s initial costing of R54.32 represented both labour and rental. In
18
accept a remedy based on the above conservative calculations.
“So at the end of the day on the labour, if the Tribunal can make one of
two decisions as we see it. Either let us do our labour and then pay the
same royalty as they do, and do our own labour, alternatively the Tribunal
must look at this and at the very worst, at the very worst, it must give us a
seventeen Rand (R17,00) discount on Cape Town and a twentythree
Rand (R23,00) discount in Durban on the charges currently levelled,
because that’s the extent of the discrimination, as I’ve just explained… I’m
saying at the very worst, I’m taking the figures that’s the worst for us” 39
However, the obvious disputes of fact prevent us from accepting these figures
with any certainty. Both Portnet and SAFT attack the bases of the various cost
comparisons. 40
Labour
While Portnet accepts that the actual labour component of costs proposed
by SAFT are relatively comparable, it maintains that there must be an
additional apportionment for equipment, management and land rental
costs, which would increase Portnet’s costs. 41 It is significant that, on its
own version of Portnet’s costs, SAFT makes allowance for all these
elements.42
Similarly, the labour comparisons ignore both associated labour and other
overhead costs, such as office accommodation, pension contributions,
annual and holiday bonuses 43.
Similarly, the labour comparisons ignore both associated labour and other
overhead costs, such as office accommodation, pension contributions,
annual and holiday bonuses 44.
Capespan steadfastly maintains that FPT pays a flat rate in respect of
the case of rental, SAFT envisages that Capespan’s actual rental component may even be lower
to account for the benefits it receives such as building its own infrastructure. (Transcript 4 March
page 112).
39 Transcript 1 Feb page 73.
page 112).
39 Transcript 1 Feb page 73.
40 SAFT accuses the respondents of obfuscating the true state of things, a claim which is not
necessarily without merit, however, this does not assist us in arriving at an unequivocal
conclusion of the existence of price discrimination, which is necessary to grant interim relief.
41 Portnet Heads page 40 (Record page 885b).
42 See footnote 31 above (page 789 of record) .
43 Kotze affidavit, paragraph 13 (a) to (l) page 885 (b).
44 Kotze affidavit, paragraph 13 (a) to (l) page 885 (b).
19
labour of R29.11 in Cape Town and R25.84 in Durban to a labour trust
which provides for all its labour requirements in the harbour. Accordingly,
this is a flat rate per pallet. They contend that they cannot break down the
labour cost any further since this flat rate is negotiated regardless of the
type of market they serve. They allege that this excludes stevedoring and
maintain that their total cost is not confined to just the royalty and labour,
but also includes management, equipment and office costs. Their average
cost figure is R133.55 in Capetown and R104.56 in Durban. 45
SAFT adduces evidence to show that outsourced labour is brought in by
Portnet, which works under the supervision of SAFT. 46 It accordingly
premises its labour cost calculations on a temporary labour force provided
by labour brokers as and when required. 47 However, Portnet vehemently
maintains it utilises a permanent labour force at the MPT, which costs
cannot be appropriately compared to those of temporary outsourced
labour.
Portnet alleges that SAFT’s labour cost comparisons ignore seasonal
fluctuations a greater workforce may be required during the high fruit
season than at other times.
Furthermore, the number of pallets handled per hour (“handling norm”) will
fluctuate and determine whether gains or losses are made.
The respondents also attack SAFT’s rental assumptions creating other nagging
factual disputes preventing us from forming any coherent view of the status quo,
namely –
Rental
Portnet maintains that there is no factual or legal basis for comparing the
rentals paid by Capespan and those paid by SAFT. 48 The leased berths
are dedicated exclusively to the export of fruit, while those at the MPT
through which SAFT exports its produce handle, as the name suggests, a
wide range of commodities. SAFT however maintains that both E and L
wide range of commodities. SAFT however maintains that both E and L
Berths in Cape Town and Durban respectively, have been established as
dedicated berths for direct fruit shipments in terms of a common
45 Record page 481
46 Record page 1030.
47 Which Portnet maintains is new matter, not raised before in SAFT’s founding affidavit but
appearing for the first time in its last supplementary affidavit filed in reply to Kotze’s affidavit.
Portnet applied to strike out this affidavit claiming that it was prejudiced by this affidavit in that it
had not had a proper opportunity to reply thereto. (Record page 1066).
48 Portnet Heads page 34, 54.
20
understanding with the MPT arm of Portnet for more than two years, while
F Berth in Cape Town and M Berth in Durban are used as overflow Berths
for direct fruit shipments where more than one vessel is docked at the
same time. SAFT states that these Berths’ occupancy levels are very low
in respect to other commodities. 49 Nevertheless, even on SAFT’s own
submission, Capespan has exclusive use over its berths throughout the
year, while SAFT itself shares its facilities with other users for a portion of
the year. 50
Portnet attacks SAFT’s rental comparisons as being contrived and artificial
insofar as it seeks to extrapolate rental figures based on what Capespan
pays for the entire area it leases, and translate it into a rental figure per
pallet in respect of an area in the multipurpose terminals. Notwithstanding
SAFT’s protestations that its rental calculations were based on
unimproved land only, without financial or actuarial evidence as to how
these rentals were calculated, Portnet’s submissions in this regard, are
tenable:
“There can be no question about the fact that the leases foreshadow that
Capespan would enjoy the benefit of the improvements undertaken by it
for the duration of the lease agreements. A value is accordingly
ascribable, for the purposes of the SAFT comparison, to the
improvements undertaken by Capespan. No evidence was placed before
you as to how the value should be established or determined for the
purposes of the comparison. Any argument to the effect that
improvements effected by Capespan should be ignored would, in our
submission, be nonsensical…. The improvements effected by Capespan
constitute the very basis whereupon it was afforded the benefit of the
lease agreements and the right to undertake its own quayside services.
lease agreements and the right to undertake its own quayside services.
Regard must be had thereto in determining the duration of the relevant
lease agreements and the consideration levied by Portnet for the benefits
afforded to Capespan.. ”
You’re dealing with the rental of a large area, you’re dealing with rentals in
respect of a place where the fundamental infrastructure has been constructed by
Capespan. On the other hand, in the multipurpose terminals, you’re dealing with
structures, which are constructed by us entirely. You’re dealing with services,
which are provided by us entirely and you’re dealing, generally, with an entire
facility, which is provided by us to SAFT. ”51
49 Record pages 99, 1034.
50 SAFT Heads page 55.
51 Transcript 4 March 2002 page 4 and 53.
21
In any event, as Capespan points out, there is no evidence that Capespan
pays a per pallet rental. 52 Capespan alleges it pays a fixed rental in terms
of its lease agreement with Portnet. It refers to volume requirements and
time considerations. There are minimum volumes that Capespan must
guarantee to Portnet, which means that if Capespan exports more pallets
in any given year than the number on which SAFT bases its calculations,
then, on SAFT’s methodology, the per pallet rental will be lower. This
serves to confirm the unreliability of SAFT’s figures.
As for Portnet’s figures, according to Portnet’s Business Development
Manager of its Port Operations Division, Trevor Kotze, quayside rental is a
component of its per pallet labour cost of R13.58, together with other
labour overheads. 53 However, he attributes no values to quayside rental
or any of the other management costs. SAFT therefore attempts to
quantify the labour and rental components of Portnet’s per pallet cost. The
manner in which they do this is based on assumptions that, in the absence
of hard evidence are, at best, tenuous. 54
“If we look at Portnet’s figures…..the labour and rental is R13.58 all
in. And we say that of that the labour is probably R8.00 and the
rental is anything between 46.5c and R5,55.” 55
Portnet contends that this method is flawed.
Later, Kotze contends 56 that notwithstanding his averments in his first
affidavit, he did not intend to allow for office accommodation, quayside
rental, equipment costs or profit margins in his initial labour cost
calculation. Despite being a glaring contradiction of his previous evidence,
we have no hard and fast evidence to gainsay this assertion. While it is
doubtful that Kotze did not include quayside rental in his initial
doubtful that Kotze did not include quayside rental in his initial
computation, especially after having specifically referred to it, there
remains the possibility that Portnet’s costs could well be higher were one
52 Transcript 5 March 2002 page 3.
53 As per his initial affidavit dated 12 December 2001 (record page 879). On page 881 of the
record, Kotze builds quayside management and labour overhead costs into his computation,
which, when divided by 4 hatches, approximates SAFT’s figure. (at page 885(b) of record).
54 Based on Kotze’s statement that management and labour overhead costs comprise 69.7% of
its total cost structure, SAFT determines that quayside rental must be 8.5% of the markup of
69.7% (one twelfth of 100%), namely R5.50 and the labour component, R8.00.
55 Transcript 1 February 2002 pages 66, 70.
56 Second Affidavit at page 1004 of Record. Portnet cites the reason for excluding these
additional costs as being that these were not applicable when the tariffs in Cape Town and
Durban were agreed to. However, these have now become applicable since the divisionalisation
of Portnet into the National Port Authority and Port Operations Division since the POD is liable to
the NPA for rental in respect of office accommodation and quayside space. (Record page 1005).
22
to take account of these costs, on top of the labour costs. Ultimately SAFT
concedes that on this basis, it cannot attribute a figure for rental. This
exercise nevertheless becomes academic, since SAFT later accepts the
R13.58 allin figure in proving discriminationabandons this exercise:
“The difficulty is that we don’t … the only thing that is not definite
here, that is not certain and based on the papers of Portnet, is their
last affidavit by saying that the 13.58 did not include rental…If you
believe him now to say he made a mistake, then we must assume
that that thirteen fiftytwo (R13,52) is now only his labour cost,
which seems … you see, when we get to the rental calculation we
don’t know, because the labour cost can vary from nine (9) to
thirteen (13). So it may be that there was quayside rental included
in here. He says not, but I think at the end of the day I will argue it
doesn’t matter which way you decide, because I am prepared, the
claimant is prepared to accept everything of these figures to the
benefit of what could possibly be the best deal for Capespan … for
Portnet.” 57
Portnet maintains throughout its argument that the rates of R50 and R52.50 are
based on the published tariff rates, relative to which SAFT enjoys a discount of
40% on the normal user charge. 58 SAFT contends that these published rates
have no relevance to the services currently provided by Portnet to SAFT. They
aver that there is no appropriate tariff which would correspond to this adapted
service.59 The fact that this is an adapted service for which there is no applicable
formal tariff serves to confirm the complexity of constructing an appropriate costs
order where the factual evidence is equivocal, were we to find evidence of
discrimination.
If we cannot calculate what the quayside service is costing Capespan we cannot
be certain of discrimination by Portnet.
be certain of discrimination by Portnet.
For this reason we cannot find that Portnet is discriminating against SAFT
and without such a finding the relief on which it is premised must fail.
In its first prayer, SAFT requests that Portnet allow SAFT to conduct its own
quayside services. Portnet objects to allowing SAFT to conduct its own quayside
services since insofar as it would entail, it alleges, severe delays and disruption
of the port operation at the MPT, it would neither be feasible nor viable. 60 Again,
57 Transcript 1 Feb 2002, pages 59, 71.
58 Transcript 4 March 2002, page 29.
59 Record page 1044.
60 Transcript 4 March 2002 page 43. Portnet alleges that t he effect of an order against
23
this is subject to significant disputes of fact, but since we cannot find evidence of
discrimination against SAFT, there is, in any event, no basis for us to allow SAFT
to conduct its own services at the quayside.
Accordingly we find that the applicant has not made out a case, even on
the interim relief standard, that Portnet is involved in any form of unfair
discrimination against it. Without proof of unfair discrimination the
applicant cannot establish the existence of a prohibited practice.
APPLICATION TO STRIKE OUT SAFT LAST AFFIDAVIT BY PORTNET
Portnet requests that SAFT’s latest affidavit and supporting affidavits responding
to Trevor Kotze’s affidavit be struck out on the basis that they introduce new
matter for the first time and try to make out a new case. In fact, as SAFT point
out, it is merely responding to specific facts raised in Kotze’s affidavit, facts
which were not raised with any particularity in any of Portnet’s papers until then.
Portnet alleged inter alia, organisational hazards would arise if SAFT were
allowed onto the quayside, which SAFT was obliged to respond to in order to
contradict the assertions.
We have therefore decided to admit this affidavit as well as its supporting
affidavits.
COSTS
Insofar as Portnet is concerned, subject to our previous costs order of 2 February
2002, SAFT is liable for Portnet’s costs. SAFT is however entitled to costs in
respect of the unsuccessful striking out application.
As far as Capespan is concerned, the situation is more complicated. Although
Capespan has been successful we have decided to reduce its costs. (We
should give effect to this in the costs order below)
When it filed its answering papers, Capespan took the point that there had not
been proper joinder of the lessees of the facilities at Durban and Capetown from
whom its was alleged that Capespan sublet . It subsequently emerged that the
premises at Cape Town had been ceded to Capespan contrary to what it had
premises at Cape Town had been ceded to Capespan contrary to what it had
alleged. This information was uncovered by SAFT, much to the embarrassment
Portnet requiring it to reduce its tariff and/or allow SAFT to undertake its own quayside
services would, in all probability, open the floodgates to complaints and probably litigation
from other users of the port for similar benefits. The efficiency with which Portnet
undertakes its services would be significantly interfered with and affected.
24
of Capespan., At the hearing on 13 December 2001 Capespan conceded that
they had taken cession of the Cape Town premises but alleged that due to an
administrative error, they were unaware that the lease had been ceded.
Apparently the cession had for some time awaited Portnet’s consent and
signature and when that eventually took place, unbeknown to the senior
executives of Capespan, the cession had been returned to them and filed away
without their having sight of it.
Even if we accept the factual allegations of this explanation, it does not excuse
Capespan’s conduct which put the applicant to considerable expense and
inconvenience. Once they had taken the point, Capespan had to make sure they
had done their homework and on their own version, they had not. The situation is
aggravated by the fact that they knew of the pending cession and yet insisted on
taking the point without taking the most elementary steps to verify them. To show
our disapproval of this, we have decided to reduce Capespan‘s costs by an
amount of 15% of the amount finally awarded to them on taxation.
Accordingly we make the following order:
The application is dismissed against all the respondents.
1. Subject to our order on 2 February 2002, the first respondent is awarded
costs on a party and party basis including the costs of three legal
representatives.
2. The second to fourth respondents are awarded costs on a party and party
basis including the costs of three legal representatives. Such costs to be
reduced by an amount of %.
3. SAFT is awarded the costs of the application to strike out on a party and
party basis including the costs of three legal representatives.
29 April 2002
N. Manoim Date
Concurring: D. Lewis and M. Moerane
25