The Australian Competition and Consumer Commission will not oppose two separate proposals by consortia to acquire the 50-year lease of the Port of Melbourne, following careful consideration of potential cross-ownership interests and vertical relationships.
The ACCC’s review of both the IFM Consortium and QIC Consortium proposals focused primarily on the cross-ownership interests in the Port of Melbourne, NSW Ports, and the Port of Brisbane, and vertical relationships with port services providers operating at the Port of Melbourne.
The ACCC also explored a number of potential vertical issues arising from some consortium members having interests, or managing interests on behalf of clients, in port users, including DP World Australia (a stevedore and container terminal operator) and ANZ Terminals (a bulk liquids storage provider), in relation to the IFM Consortium; and DP World Australia and Pacific National (a rail freight provider), in relation to the QIC Consortium.
The proposed regulatory regime is largely a separate matter to this competition assessment. The regime to apply at the Port of Melbourne will be overseen by the Victorian Essential Services Commission and will cap many fees and prices for port users at CPI for the first 15 years of the lease.
The ACCC also considered whether the potential cross-ownership issues would give the ports an increased ability to raise rents further than would otherwise be the case, due to knowledge of rents being charged at other ports and information about a port user’s willingness to pay.
The ACCC determined that benchmarking already occurs, rents and other charges are typically known to an extent across the industry and that, even if the port operator gained some additional knowledge about rents or willingness to pay, this is unlikely to significantly increase their bargaining power in rent negotiations with tenants.