Antitrust watchdog says deregulation of tariffs at seaports helps ensure strong performance
The state policy should be stable on tariff setting and antitrust laws enforcement, an official of the Federal Antimonopoly Service (FAS) of Russia said Monday commenting the results of the FAS Methodological Council meeting held August 12.
The meeting was focused on the issues of tariff regulation, deregulation and market pricing at Russia's seaports.
The meeting was attended by all stakeholders, including port authorities, stevedore companies, port investors, shippers, fleet operators, research institutions and state authorities.
"Tariff regulation must be based on the market analysis to be carried out in accordance with the norms of the antimonopoly legislation," Deputy head of FAS Anatoly Golomolzin commented.
The market analysis is carried out in accordance with the Executive Order №220 of FAS. The law on natural monopolies prohibits the actions that restrain the transition of the market from natural monopoly to a competitive environment. In line with the agreement of the Eurasian Economic Union, a decision on the introduction, modification or termination of tariff regulation may be made only after a market analysis.
"If the analysis of the market shows that there's no competitive environment then tariff regulation should be applied,” Golomolzin said. “If we create the conditions of the transition from natural monopoly into a competitive state, a flexible tariff regulation should be applied. When the conditions for competition are available, we need to deregulate tariffs. And the competition may be both in port and between ports as well as between Russian and foreign ports," the official said.
Market participants pointed out that actually competition conditions have been present in most of the segments of the market, both at sea and river ports.
It has been noted that in assessing the effects of the tariff deregulation the key factor is the result: how the port services volume grows and how favorable are the conditions for investment in the development of new ports and port facilities.
The decision to deregulate tariffs, adopted earlier, has helped preserve the favorable economic results. However, deregulation does not mean, Golomolzin says, that the market situation will be uncontrollable. The norms of antimonopoly legislation are still effective and it can be enforced against offending parties.
"This approach will surely contribute to the stability of tariff and competition policy, and hence sustainable operation and development of ports and the economy as a whole", highlighted the FAS official.
The meeting experts agreed on the need to consider at the meetings of the FAS Methodological Council price formation techniques with participation of all stakeholders.
The Association of Sea Commercial Ports of Russia (ASOP) noted that the trend prevailing in the market and the analysis of port capacity utilization confirms the development of competition in the industry, and adequate pricing policy by Russian operators of marine terminals.
FAS of Russia offers to change the current situation when the tariffs formation in the port industry entails a significant deterioration of the financial situation of maritime transport companies, namely due to the introduction of restrictions on the size of the standard profit, on ROE, etc. and to economically unjustified increase in payback period. The sharp decline in the profitability of the stevedoring activities will lead to the multi-fold reduction in the tax base of operators of marine terminals, which are the main taxpayers in the coastal regions, ASOP said.
