ACCC approves grain port access

The nation's competition watchdog last week gave approval for CBH's current system of auctioning port capacity to continue.

The Australian Competition and Consumer Commission (ACCC) also approved port access undertakings from Viterra, which operates six ports in South Australia, and the Australian Bulk Alliance (ABA), which sets out arrangements for wheat exporters using Melbourne Port Terminal.

Under the access arrangements, port terminal operators must not discriminate or hinder access to port terminal services and they must also provide transparent port loading protocols to manage demand for port services.

ACCC chairman Rod Sims said CBH's existing auction system for allocating capacity at its ports had promoted competition among wheat exporters with benefits flowing to farmers and exporters.

CBH had initially proposed a two-tiered capacity system, which the ACCC raised some concern over.

Some exporters also feared that the proposed baseload port capacity allocation system proposed by CBH would disadvantage exporters that exported lower tonnages.

But CBH has not ruled out revisiting such a model.

The ACCC, however, has overseen changes to the way Viterra allocates port access, after rejecting the Canadian grain giant's plan to continue its 'first come, first served' system.

Viterra's revised undertaking introduces an auction system for allocating capacity by May 2012.

The ACCC noted that under the previous arrangements, only Viterra and one other exporter could access Viterra's deep-water port terminals at Port Lincoln and Adelaide Outer Harbour in the peak months of January to April 2012. Before the introduction of the auction system, Viterra has withdrawn a number of its own bookings.

Viterra's auction system for allocating capacity is expected to be in place by May 2012.

"In welcoming Viterra's initiatives, the ACCC looks forward to a more open, transparent and competitive environment in the SA bulk wheat export market," Mr Sims said.

He added that current arrangements at Melbourne Port Terminal appeared to be working well.

The ABA was a relatively small operator facing strong competition.

In such circumstances, significant changes were not required.

However, ABA made a few amendments to its original proposal to ensure consistency with industry-wide standards, and increased transparency for exporters on the details of port terminal operations.

The access undertakings for CBH and Viterra apply until September 2014, while arrangements for Melbourne Port apply until September 2013.