and/or incentive to use observed either to have been alternative port services. stable or improved, and reported profitability does not The choice between appear to have been and heavy-handed excessive. economic regulation needs to take into account whether Port of Melbourne To assist further in Corporation has actually determining the appropriate exercised its substantial form of regulation to the market power. To this end, ESC also assessed the the ESC assessed the existing regulatory framework available evidence regarding based on the following movements in the prices, assessment criteria: service quality and Transparency: is the profitability of Port of objective and operation of the Melbourne Corporation’s price-monitoring framework prescribed services to clear? ascertain whether there has Effectiveness: is the been any misuse of Port of framework appropriately Melbourne Corporation’s addressing the regulatory market power, in relation to problem? the provision of prescribed Proportionality: are the services. The available elements of the evidence indicates that price framework movements have been in proportional to the nature of excess of Consumer Price the regulatory problem, Index growth but not including the obligations substantially so, with the currently placed on the Port exception of the impact due to the introduction of the Port Licence Fee. Reported service-quality outcomes are
and/or incentive to use alternative port services. The choice between and heavy-handed economic regulation needs to take into account whether Port of Melbourne Corporation has actually exercised its substantial market power. To this end, the ESC assessed the available evidence regarding movements in the prices, service quality and profitability of Port of Melbourne Corporation’s prescribed services to ascertain whether there has been any misuse of Port of Melbourne Corporation’s market power, in relation to the provision of prescribed services. The available evidence indicates that price movements have been in excess of Consumer Price Index growth but not substantially so, with the exception of the impact due to the introduction of the Port Licence Fee. Reported service-quality outcomes are observed either to have been stable or improved, and reported profitability does not appear to have been excessive. To assist further in determining the appropriate form of regulation to the ESC also assessed the existing regulatory framework based on the following assessment criteria: Transparency: is the objective and operation of the price-monitoring framework clear? Effectiveness: is the framework appropriately addressing the regulatory problem? Proportionality: are the elements of the framework proportional to the nature of the regulatory problem, including the obligations currently placed on the Port
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