AUSTRALIA’S corporate regulator has raised concerns about the Victorian government’s plans to use the state’s Essential Services Commission (ESC) to monitor charges at the Port of Melbourne.
Stevedoring company DP World is challenging fee rises of up to 760 per cent, which the company said would make the port the most expensive in the world.
Now, Australian Competition and Consumer Commission (ACCC) chair Rod Sims said while it was not currently involved, it would retain a watching brief.
“We will have a role in assessing the bidders and seeing if there are any competition issues,” Mr Sims said.
Only governments, the stevedores or shipping lines could invite the ACCC in to have the port declared under Part III of the Competition and Consumer Act 2010.
“The state regulators can do a great job, but it’s only a price monitoring regime – there’s not a regulatory role, it’s a monitoring role,” Mr Sims said.
“I don’t know a monitoring role really does much,” he said.
He welcomed the Victorian government’s role to cap pricing increases at the Consumer Price Index (CPI)
“I assume that is a contractual cap, with whoever wins the bid,” Mr Sims said.
“That could be useful, but if demand increases a lot, you still have to ask whether CPI increases are appropriate.”
Legislation currently before the Victorian Parliament allows for the PoM to be leased for 50 years.
It is Australia's busiest container port, visited by more than 3,000 ships each year.
The Government said it expected to earn $5 billion to $6 billion from selling the long-term lease.
Annual tariff increases would be capped for at least 15 years.
Mr Sims said while the legislation was “not a bad start” it did not include land rent costs, payable by stevedores.
“That is still a concern, in some ways,” Mr Sims said.
“There is no question they have to pass it on, it’s those who export through that port who really suffer from higher costs – that’s very much a concern.
“One wouldn’t want to see an 800 per cent or 200 per cent increase its very worrying to talk about that.”
The Tasmanian government has welcomed the tabling of the legislation, but warned it would still proceed to have the port declared, if the state’s interests were not protected.
Infrastructure Minister Rene Hidding said he had made it very clear Tasmania would not accept the state’s industries having to pay the price of privatising the port.
“The legislation is a key element of the Victorian Government delivering its assurances that Tasmanian exporters and shippers will not be unfairly disadvantaged by its move to lease the Port of Melbourne,” Mr Hidding said.
“We welcome that the Bill provides for Victoria’s independent economic regulator, the Essential Services Commission, to oversee the pricing structure for a range of activities and services, and would also cap annual tariff increases at the rate of Consumer Price Index rises.”
Tasmania would continue to work productively with the Victorian Government and acknowledged the good will demonstrated by the Victorian Premier, Daniel Andrews.
However, it was important that the assurances provided by the Victorian government are met.
“If those assurances aren’t met, the Tasmanian government reserves the right to take all actions available to it, including application to have the port declared under Part III of the Competition and Consumer Act 2010, if needed to protect the State’s interests,” Mr Hidding said.
Independent Tasmanian MP Andrew Wilkie said he was delighted progress was being made over port fees.
“However this is only half the problem Tasmania faces, the other half being the license fee which is a tax on interstate trade and unconstitutional,” Mr Wilkie said.
A $75-million Port Licence Fee was imposed in 2012, indexed each year and already estimated to cost Tasmanian exporters $13 million a year, Mr Wilkie said.
“The previous State government was of this view but didn’t have the gumption to challenge Victoria in the High Court.
“The community would expect the current State government to finally deal with this matter,” he said.
Mr Wilkie has previously told Federal Parliament the Victorian government was "ripping off" the exporters of Tasmania with their sky-rocketing port fees and ever-increasing licence fee.
