Deregulate smaller ports – report

The report, by independent economic regulator Essential Services Commission (ESC) recommends to the State Government that the regional ports of Geelong and Portland, and current activities at the Port of Hastings, no longer be regulated.
It recommends port prices for break-bulk (excluding motor vehicles), liquid bulk and dry bulk trades for all ports, including the Port of Melbourne, be freed up.
The report said that regulation through price monitoring should be limited to port berth services for container and motor vehicle cargoes and to the shipping channel services (both the Port of Melbourne channels and the shared channels at the entrance to Port Phillip Bay), used by ships visiting the ports of Melbourne and Geelong.
Price monitoring is currently undertaken by the commission in its role as the regulator of the ports sector.
The draft report recommended that shared shipping channel services currently provided by the Port of Melbourne be subject to the channels access regime, providing for a dispute resolution process in relation to any conflicts over charges for the use of the shared channels.
ESC chairman Dr Ron Ben-David said the draft report’s recommendations would promote competition and focus economic regulation on situations where it was needed to prevent any misuse of market power by ports.
“Our report recognises that the risk of market power being exercised at the regional ports is low, so we have recommended that price monitoring of regional ports be discontinued,” he said.
“We believe the regional ports are now operating in increasingly sophisticated and competitive markets for the cargoes they handle.”
The draft report found that the Port of Melbourne Corporation retained the potential to exercise substantial market power in the provision of port services for containerised trades; however, the available evidence did not support a conclusion that it had misused its market power, Dr Ben-David said.
The commission had therefore recommended that shipping channel services provided at the Port of Melbourne and berth services for container and motor vehicle trades should continue to be subject to the current light-handed economic regulatory regime for a further five-year period.