SHIPPERS and land transport operators are hoping the Essential Services Commission’s first formal review of land rentals in the port of Melbourne will draw regulators’ attention to the flow-on impacts of unfettered price rises.
Victoria’s ESC late last week launched the mandated inquiry under section 53 the Port Management Act 1995 (Appendix A) which requires the Commission to consider whether the privatised Port of Melbourne has market power in relation to the process for setting and reviewing land rents, and whether it has exercised market power in a way that causes material detriment to Victorian consumers (a misuse of market power).
Freight & Trade Alliance/Australian Peak Shippers’ spokesman Andrew Crawford said port privatisation was always a risk, particularly for a strong export economy like Victoria.
“Any port-related price increases, including rent, will inevitably be passed down to port users (importers and exporters), impacting their competitiveness,” Mr Crawford said.
“This has flown on effects for the whole economy.
“It’s important that the ESC and other regulators have the power and appetite to regularly review the regime and the appropriateness of port-related pricing.”
Container Transport Alliance Australia’s Neil Chambers noted that the ESC is interested in views about how any misuse that tenants may experience is then passed on to their suppliers or customers, which may then in turn be passed on to Victorian consumers.
“In this regard, CTAA will be drawing the attention of the ESC of the spiralling stevedore infrastructure charges, which the stevedores claim are due to rising operational costs, including increased rents,” Mr Chambers said.
While the port’s three container stevedores have been amongst the loudest critics of land rent rises claimed to have been as much as 700%, DP World Australia chose not to comment and Patrick did not respond to an emailed request.
The ICTSI-owned Victorian International Container Terminal said it will assist the ESC with its inquiry, but pointed also to recent comments about perceived unfairness of the PoM’s proposed port rail levy.
Port of Melbourne said yesterday it is “fully cooperating with the ESC in relation to our obligations”.