Competition regulator wants to allow CBH to implement long-term access arrangements at its WA terminals
Co-Operative Bulk Handling’s (CBH) proposed changes to access arrangements at its four port terminals in Western Australia look likely to go ahead.
The Australian Competition and Consumer Commission (ACCC) today released a draft decision approving CBH’s plan, which applies to third party exporters using its terminals for bulk wheat exports.
CBH currently allocates port terminal capacity to exporters for one year at a time via annual auction and first-come first served processes but it now wants to introduce long-term agreements for port terminal capacity.
CBH says the move will provide up to 66 per cent of total port terminal capacity to customers who are willing to book a minimum of 600,000 tonnes of capacity per year for three years.
The remaining capacity not allocated by long-term agreements will be available to all exporters through the existing processes.
ACCC commissioner Cristina Cifuentes says the arrangements appropriately balance the interests of different exporters.
“The ACCC considers that long term agreements can offer benefits to both the port terminal operator and the access seeker by providing greater certainty to plan long term export programs and assisting supply-chain planning and investment,” Cifuentes says.
“Importantly, smaller exporters and those who choose not to enter into long term arrangements with CBH are provided for under the proposal. These companies will have access to a minimum 34 per cent of port capacity on an annual basis as they do now.”
The ACCC says the proposed arrangements retain features such as a publish-negotiate-arbitrate approach to access, dispute resolution processes and obligations on CBH not to hinder access to services or to discriminate in favour of its own trading division.
The proposed arrangements are due to begin on September 30 if a mandatory code of conduct governing access to wheat ports is not introduced.
The ACCC says it assessed the commercial benefits of CBH’s plan, with a particular focus on the impact it may have on smaller exporters that could not meet the minimum capacity thresholds in the proposal.