Thursday 13th Dec, 2018

ACCC gives provisional approval to Brisbane-Carnival terminal deal in draft decision

Photo: Shutterstock
Photo: Shutterstock

IN a draft decision, the Australian Competition and Consumer Commission proposed to allow a deal between the Port of Brisbane and Carnival Cruise Line that would help fund a new $158m cruise terminal at Brisbane.

But, the ACCC proposed conditions on the authorisation, citing competition concerns.

Under the proposed agreement, Carnival would pay a fixed yearly amount to the Port of Brisbane over the 15-year term of the agreement, helping to underwrite the cost of building the terminal.

In return, Carnival would receive preferential berthing rights at the new terminal, including 100 “foundation berthing days” a year, which allow the company to have first pick of 100 days per year at the terminal, up to a maximum four days per week.

The competition watchdog voiced concerns about the prospect of Carnival being granted a right of first refusal over a possible future second berth at the terminal.

ACCC Commissioner Roger Featherston said, “We are concerned this will block other cruise operators from being able to offer alternate cruise options to consumers in Brisbane.”

The ACCC proposed to impose a condition on its authorisation; that the Port of Brisbane and Carnival not give effect to these provisions in the agreement.

Commissioner Featherston said he recognised a new cruise terminal at Brisbane capable of berthing larger ships would be a real public benefit to the community, as the current infrastructure is lacking.

“Of course the ACCC recognises that commercially, having a foundation customer helps to underwrite the projected $158m investment for the Port of Brisbane to build the new terminal,” he said.

The ACCC also pointed to concerns about another aspect of the agreement, but stopped short of proposing conditions on the agreement in connection with it.

Commissioner Featherston said there were concerns that Carnival’s four days per week of preferential access to the terminal may limit or prevent competition from other cruise liners, particularly during the peak summer season.

A spokesperson for Carnival Australia told DCN the company would review the ACCC’s draft comments and respond as part of the usual process ahead of the regulator’s final determination.

“We respect the ACCC process and will engage directly rather than comment while it is underway,” the spokesperson said.

A Port of Brisbane spokesperson said the Port would assess the ACCC’s drat determination and respond according to the established processes.

“We don’t intend on commenting further while the process is ongoing,” the Port spokesperson said.

The ACCC is seeking further submissions about the proposal and draft determination from all interested parties, more information is available on the ACCC website.

The ACCC declined to grant interim authorisation for the agreement back in November 2017, saying there would be no activity to which authorisation would apply. Carnival said interim authorisation would have provided them with “some level of comfort” before construction began in November.

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