This document is our commentary on the Port of Melbourne’s annual tariff compliance statement for 2017–18. Our key observations relate to the weighted average cost of capital, the impact of longer regulatory periods and the treatment of deferred depreciation.
Clause 7 of the pricing order requires the Port of Melbourne to submit a tariff compliance statement to us each year to demonstrate how it has complied with the order. We conduct an inquiry into the port’s compliance with the order every five years. In the years between these inquiries, we publish interim commentary, which sets out our preliminary observations on the tariff compliance statements to inform the port and users of our informal views on the port’s statements.