Towage charges at the Port of Melbourne will rise by a weighted average of 10 per cent, rather than the 17.5 per cent sought by Howard Smith Towage, the Australian Competition and Consumer Commission Chairman, Professor Allan Fels, announced today. The last price rise was in 1987. "An increase for Howard Smith Towage charges was found to be justified," he said. "The ACCC noted both improved services and significant savings, due to reduced tug usage experienced by most users, over the past year.
"Reforms by Howard Smith have reduced the number of tugs required per ship, chiefly by using more powerful tugs. Invoiced costs to users have therefore fallen. However Howard Smith's costs have risen as the tugs are available on a 24 hour, more flexible basis.
"As a result of the imbalance, Howard Smith Towage proposed to increase prices by a weighted average of 17.5 per cent.
"The ACCC had some concerns, especially about Howard Smith Towage's accounting for depreciation costs. A downward adjustment to the 17.5 per cent weighted average price increase was warranted.
"A 10 per cent weighted average price increase will allow Howard Smith Towage to earn a reasonable rate of return and provide users with better service. Few users will be paying more when compared to the pre-reform period.
"Harbour towage in the major ports is a declared service under the Prices Surveillance Act. Towage companies must notify the ACCC of any proposed price rises.
"In assessing Howard Smith Towage's price notification the ACCC consulted widely with industry over several months and sought expert advice on key issues. Information provided by the industry was invaluable.
"Howard Smith Towage has increased the efficiency of the Port of Melbourne and the ACCC supports moves toward a more efficient service. Users agree with the direction of reform".