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Port of Melbourne compliance with pricing regulations

Read the resources we produce on the Port of Melbourne's compliance with pricing regulations.

Overview

Tariff compliance statement 2019-20

The Port of Melbourne operator has provided a submission for us to prepare our interim commentary on their tariff compliance statement for prices that apply from 1 July 2019. The port's tariff compliance statement submission also included a number of appendices with supporting information, such as its regulatory model and consultant report on the rate of return.

We are preparing our interim commentary, based on both public information (published here) and confidential information provided with the Port of Melbourne's submission, which we intend to publish in the last quarter of 2019.

Our commentary on the 2019-20 tariff compliance statement

We have published our interim commentary on the Port of Melbourne's tariff compliance statement for prices that apply from 1 July 2019.

Following our consideration of the port's tariff compliance statement, we have the following main observations:

the port has improved the transparency of its modelling and the transparency of its treatment of depreciation in the revenue requirement, improving ease of understanding of the calculation of its tariffs
the port has made a number of minor changes to its weighted average tariff calculations and tariffs, which we consider is now more consistent with the requirements of the pricing order
the port’s rate of return continues to appear high and, in the commission’s interim view, would require further substantial justification to demonstrate compliance with the pricing order
we are still unclear on the port’s approach to managing its deferred depreciation and the subsequent future price impacts arising from deferring depreciation until after the ‘tariff adjustment limit’ period (being the period during which tariffs are essentially limited to increases in consumer price index).

17 December 2019

Interim commentary - Port of Melbourne tariff compliance statement 2019-20

(pdf, 634.13 KB)

Our role

Each year, the Port of Melbourne must submit a tariff compliance statement to us. The port’s statements outline how it has demonstrated compliance with a pricing order (legislation that regulates how the port sets its prices). Every five years we are required to assess whether there has been any significant and sustained non-compliance with the pricing order.

Outside of these five-yearly reviews, we provide interim commentaries on the port's compliance statements in order to provide guidance to the port, as well as identify important issues to other stakeholders. Our commentaries are not an assessment of the port’s compliance with the pricing order, nor do they provide findings on whether any non-compliance was significant and sustained.