The Port of Newcastle, jointly owned by The Infrastructure Fund (managed by Macquarie Infrastructure and Real Assets) and China Merchants Group, is facing two legal battles over the use of its monopoly power just weeks after apparently seeing off a challenge from coal company Glencore over access charges.
The Australian Competition and Consumer Commission announced today that it would appeal to the Federal Court for a review of an October 30 decision by the Australian Competition Tribunal on Glencore’s terms of access at the port.
The competition watchdog determined then that the port should reduce the charge for ships entering the port to carry Glencore’s coal by 20 percent to A$0.61 ($0.41; €0.38) per gross tonne, with a major part of the dispute centring on whether the port should be able to charge for dredging of the shipping channel that had been undertaken or already funded by users of the port.
The ACCC excluded those amounts from the costs the Port of Newcastle could recover, but the ACT’s new ruling in October this year included these amounts and determined an access charge of A$1.01 per gross tonne.
“The ACCC does not consider it to be economically efficient for a service provider to be allowed to charge any user for costs of assets that have already been funded by users,” ACCC chairman Rod Sims said in a statement. “Our appeal will focus on what we will argue are errors in the way the ACT has approached the principles of user funding, which could have implications for other regulatory matters.”
The ACCC only had a role in arbitrating the dispute because the shipping channels at the Port of Newcastle had been ‘declared’ under Part IIIA of the Competition and Consumer Act 2010 in 2016. That declaration was revoked in September this year following a request from the Port of Newcastle to the National Competition Council, an advisory body that provides recommendation to governments on the regulation of third-party access to services provided by monopoly infrastructure.
The ACCC said its arbitration determination remains in force until 2031, despite the revocation of ‘declared’ status.
Another dissatisfied customer
Separately, the Port of Newcastle has become embroiled in a legal dispute with another of its customers, logistics company Qube Holdings.
Qube filed a lawsuit at the Federal Court earlier this month, bringing a claim of misuse of market power against the Port of Newcastle.
The Australian Financial Review reported that the dispute centres around ownership of quay-side cranes used to load and unload container ships at one of the port’s two dry bulk berths. Qube is reportedly set to argue that port-owned equipment is a gateway to it moving into the stevedoring business, and that port management is exercising its monopoly power to ensure users have no choice but to use its service.
The ACCC defines misuse of market power by saying that a business “with a substantial degree of power in a market is not allowed to engage in conduct that has the purpose, effect or likely effect of substantially lessening competition in a market”.
Port of Newcastle had not responded to a request for comment on the Qube lawsuit or the ACCC appeal prior to publication.
Qube Holdings did not respond to a request for comment.