The Australian Competition and Consumer Commission will review Adsteam Marine Limited's proposal to raise charges for harbour towage services.
The services relate to tug boats that assist ships to enter and exit various ports around Australia. Adsteam Marine is the sole provider of harbour towage services at major ports in Australia. As a result, Adsteam Marine is a 'declared' company under the Prices Surveillance Act 1983, and is therefore required to notify the ACCC of proposed price increases.
Adsteam Marine notified the ACCC on 14 December 2001 of its intention to raise charges for towage services at the ports of Sydney (Jackson and Botany), Adelaide, Melbourne and Brisbane. The proposed price increases are:
- 11.7 per cent in Brisbane
- 13.1 per cent in Port Botany
- 15.8 per cent in Adelaide
- 23.4 per cent in Melbourne
- 26.2 per cent in Port Jackson
The ACCC has until 17 January 2002 to decide on Adsteam Marine's notification. In its consideration of Adsteam Marine's proposals, the ACCC will focus on:
- the efficiency of the cost base that Adsteam is working from to earn a return
- the reasonableness of the rate of return that Adsteam is seeking
- recent changes to Adsteam's operating environment
- the effectiveness of competition
The price increases proposed by Adsteam Marine represent increased costs to businesses involved in international and domestic shipping. To assist in its consideration of Adsteam Marine's proposal the ACCC is now seeking comments from shipping businesses.
The timing of the ACCC's process is determined by the Prices Surveillance Act which provides
21 calendar days for the ACCC to make a decision. This time may be extended with the consent of the declared company. In this case Adsteam Marine has consented to an extension of only 14 days.
Submissions should therefore reach the ACCC by the close of business, Wednesday 2 January 2002, as a final decision on the notification will need to be made by 17 January 2002.