Application by Port of Newcastle Operations Pty Ltd [2019] ACompT 1

Application by Port of Newcastle Operations Pty Ltd [2019] ACompT 1

The scope of the access determination is confined to where Glencore owns or, directly or by agent, charters a vessel to enter and load Glencore coal in the Port precinct. No deduction for user contributions is justified in the regulated asset base as there is no satisfactory evidence either of an agreement or of a shared expectation leading to such anticipated adjustments in pricing. The Tribunal restored the RAB to full ORC value and set the Navigation Service Charge accordingly. The DORC methodology agreed between the parties, with prudent input assumptions and an integrated 12-year construction period, appropriately reflects efficient replacement cost. There is no requirement for a...

Parties
Applicant: Port of Newcastle Operations Pty Ltd; Applicant/respondent/user: Glencore Coal Assets Australia Pty Ltd; Respondent/arbitrator: Australian Competition and Consumer Commission
Jurisdiction
Australia
Judgment Date
30 October 2019
Procedural Posture
Applications for Review (re Arbitration) Under S 44 ZP of the Competition and Consumer Act 2010 (cth) of an Arbitration Determination by the ACCC in an Access Dispute / Final Determination by the Tribunal on Review (re Arbitration)
Outcome
The Tribunal varied the ACCC's Final Determination.
Legal Topics
Access Pricing, Declared Services, Regulated Asset Base (rab), Depreciated Optimised Replacement Cost (dorc), User Contributions, Port Charges, Navigation Service Charge, Wharfage Charge, Scope of Arbitration, Regulatory Methodology, Pricing Principles, Capex True Up, Interest During Construction, Non Coal Assets Allocation, Construction Period
Competition Law Administrative Law Access to Essential Facilities Access Pricing Declared Services Regulated Asset Base (rab) Depreciated Optimised Replacement Cost (dorc) User Contributions +10 more

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Parties

Port of Newcastle Operations Pty Ltd

Applicant

Glencore Coal Assets Australia Pty Ltd

Applicant/respondent/user

Australian Competition and Consumer Commission

Respondent/arbitrator

Procedural Posture

Applications for Review (re Arbitration) Under S 44 ZP of the Competition and Consumer Act 2010 (cth) of an Arbitration Determination by the ACCC in an Access Dispute / Final Determination by the Tribunal on Review (re Arbitration)

Legal Issues

  1. 1 What is the appropriate scope of the access determination applying to Glencore for use of the Port of Newcastle?
  2. 2 Should user contributions be deducted from the regulated asset base in setting the Navigation Service Charge?
  3. 3 What methodology and assumptions should be applied in valuing the replacement cost of port assets (DORC)?

Ratio Decidendi

The scope of the access determination is confined to where Glencore owns or, directly or by agent, charters a vessel to enter and load Glencore coal in the Port precinct. No deduction for user contributions is justified in the regulated asset base as there is no satisfactory evidence either of an agreement or of a shared expectation leading to such anticipated adjustments in pricing. The Tribunal restored the RAB to full ORC value and set the Navigation Service Charge accordingly. The DORC methodology agreed between the parties, with prudent input assumptions and an integrated 12-year construction period, appropriately reflects efficient replacement cost. There is no requirement for a...

Court Disposition

The Tribunal varied the ACCC's Final Determination.

Orders

  • Scope of the determination confined to Glencore owning or directly/through agent chartering a vessel entering and loading Glencore coal; not applicable to other vessels/charges than Navigation Service Charge and Wharfage Charge; Navigation Service Charge as at 1 January 2018 set at $1.0058 per gross tonne.