Brisbane — The Australian Competition and Consumer Commission, or ACCC, and the country's National Competition Council are at odds, with the latter saying Wednesday that key coal export Port of Newcastle's shipping channel should be freed from government regulation.
The shipping channel is the "only commercially viable means of exporting coal from the Hunter Valley region in New South Wales" the ACCC said.
After Newcastle port's privatization in 2014 on a 98-year lease, charges for ships entering the port were raised 40% to A$0.69 ($0.50) per gross ton.
Port of Newcastle Operations, the privatized entity that owns the port, further increased user chargers for the shipping channel to A$0.76/gross ton in 2018, before Glencore appealed to the ACCC and it ordered the charge to be cut to A$0.61/gross ton.
The ACCC said it is "extremely concerned" about the potential removal of regulation of the shipping channel service following the release of the NCC's preliminary view to recommend that Australia's treasurer revoke declaration of the service.
"Removal of regulation of the port would be an extremely disappointing outcome and would have significant implications for all users of monopoly infrastructure," the ACCC's chair Rod Sims said, adding that it would mean the port is an unregulated monopolist that is able to determine the terms and conditions of its access with little constraint.
"It would be reasonable to expect that, without regulation, further price increases at the port would follow and this would be a bad outcome for users and the economy," he said.
The NCC's recommendation follows an application from Port of Newcastle Operations that the declaration of the shipping channel be revoked.
The NCC is a research and advisory body, which was established in 1995 by agreement of the Council of Australian Governments. Its main function is to recommend on the regulation of third party access to services provided by monopoly infrastructure.
The ACCC is an independent Commonwealth statutory authority, whose role is to enforce fair competition legislation.
-- Nathan Richardson, newsdesk@spglobal.com
-- Edited by Norazlina Jumaat, newsdesk@spglobal.com