THE plan by the Port of Melbourne plan to raise rents 800 per cent on the DP World terminal operating at the facility has led to suggestions that ports should be regulated by federal competition law.
The fee hike is reportedly based on the lease rates agreed to by Manila's International Container Terminal Services Inc (ICTSI) in 2014 when it won the concession to operate the port's third container terminal, the Newark's Journal of Commerce reported.
Critics of the move contend the benefit of the increase will flow to owners of the port, which is being privatised, and serve an unnecessary tax on import-export trade that will only increase prices for consumers.
Subjecting the port to the National Access Regime would make it more difficult for port owners to discriminate against competitors operating within a port and would grant port infrastructure tenants such as terminals a right of appeal to regulators in the event of a pricing dispute, according to the Financial Review.
Australian Competition and Consumer Commission (ACCC) chairman Rod Sims met last week with the CEO of DP World Australia Paul Scurrah who told the Financial Review that the commission needs to have "a deeper role" in regulating container ports in Australia.
"We do favour some sort of check and balance, if we got to the point of full regulation it would be a less than optimal outcome, but if it's necessary, we'd definitely support it," he added.
Melbourne, which handles 2.5 million TEU annually, is in the process of being privatised by the Victoria government, a key issue for critics of the higher lease fees being imposed on DP World.
Mr Sims has expressed concerns "about allowing monopoly infrastructure providers to significantly increase prices just before or after privatisation," according to the Sydney Morning Herald.
Other terminal operators are also saying they support port authorities being brought under the competition law.
"We believe the ACCC should have an enhanced role in regulating the conduct of monopoly port operators through the national access regime established in the Competition and Consumer Act," said chief executive of Asciano John Mullen.
Mr Mullen said the rent increase being imposed on DP World would alter regional trade flows, for example freight volumes headed to Adelaide and Hobart through Melbourne as well as volumes that are railed to Melbourne from western New South Wales, would possibly move through Sydney instead.
"Over the longer term, this disparity in competitiveness would enable Sydney to become a deep water hub for larger vessels, with a significant amount of volume being unloaded and loaded in Sydney and then moved by rail and truck to and from Melbourne," Mr Mullen said.
PORTS
19 March 2015 - 21:16
Melbourne port's 800pc rent hike sparks talk of Canberra control
THE plan by the Port of Melbourne plan to raise rents 800 per cent on the DP World terminal operating at the facility has led to suggestions that ports should be regulated by federal competition law.
PORTS
19 March 2015 - 21:16
Melbourne port's 800pc rent hike sparks talk of Canberra control
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