20 February 2002

Inquiry into the Provision of Harbour Towage Services (Terms of Reference)


NO.006 Attachment



I, IAN CAMPBELL, Parliamentary Secretary to the Treasurer, pursuant to Parts 2 and 3 of the Productivity Commission Act 1998, hereby refer Harbour Towage and Related Services to the Commission for inquiry and report within 6 months of receipt of this reference. The Commission is to hold hearings for the purpose of the inquiry.


2. In 1991, the provision of harbour towage at the major ports of Melbourne, Sydney (Port Botany and Port Jackson), Newcastle, Brisbane, Fremantle and Adelaide was made a 'declared' service under the Prices Surveillance Act 1983. A company providing a declared service must notify the Australian Competition and Consumer Commission (the ACCC) of proposed price increases. Once notified of the proposed increases, the ACCC can either:

  • not object to those increases,
  • not object to price increases lower than those proposed or
  • object to the proposed increases.

3. The declaration was made to address concerns over the lack of competition in the provision of harbour towage. The declaration has been extended twice since 1991, and is due to expire on 19 September 2002. Since harbour towage services were originally declared, the port sector has undergone structural reforms, including labour market reform. The purpose of this inquiry is to examine whether declaration of harbour towage services continues to be appropriate, and to recommend alternative arrangements where justified.

4. The Government is currently considering the report of the Commission's inquiry into the Prices Surveillance Act 1983.

Scope of Inquiry

5. The Commission is to report on:

(a) the impact of structural reforms on the provision of harbour towage and related services (eg. mooring lines), including the extent to which efficiency and productivity gains have been passed on to the users of these services;
(b) other measures that could be taken to increase the level of competition in harbour towage and related services, where desirable; and
(c) whether there is a continuing need for prices oversight of certain harbour towage services and, if so, the most effective forms of price oversight.

6. In making its recommendations, the Commission is to review the market structure in the provision of harbour towage and related services, including:

(a) the effectiveness of competition, including factors that might restrict competition;
(b) the extent to which costs structures differ between ports depending on the market structure in each port;
(c) pricing of harbour towage and related services, including structural and regulatory impediments to efficient pricing or service provision; and
(d) relevant regulations and legislation that may affect the efficient provision of harbour towage and related services.

7. The Commission should take account of any recent substantive studies relevant to the above issues.

8. In undertaking the inquiry, the Commission is to advertise nationally, consult with key interest groups and affected parties, and produce a report.

9. The Government will consider the Commission's recommendations, and its response will be announced as soon as possible after the receipt of the Commission's report.