Regulatory framework

The Port of Melbourne (Consolidated Group) operates under a regulatory framework which took effect on 1 July 2016. The regulatory framework is set out in the:

The regulatory framework primarily relates to Prescribed Services, which include channel services, berthing services, short term storage and cargo marshalling facility services and other services that allow access or use of port infrastructure.

Prescribed services

The Pricing Order details the basis for setting the tariffs the Port of Melbourne can charge port users for Prescribed Services. Section 49(1)(c) of the Port Management Act 1995 (Vic) defines Prescribed Services as follows:

“the following are prescribed services –

  1. the provision of channels (except anchorages) for use by shipping in port of Melbourne waters, including the Shared Channels used by vessels bound either for the port of Melbourne or for the port of Geelong and the Dedicated Channels used by vessels bound for the port of Melbourne;
  2. the provision of berths, buoys or dolphins in connection with the berthing of vessels in the port of Melbourne;
  3. the provision of short-term storage or cargo marshalling facilities in connection with the loading or unloading of vessels at berths, buoys or dolphins in the port of Melbourne;
  4. the provision of access to, or allowing use of, places or infrastructure… on port of Melbourne land for the provision of services to port users;
  5. any other service that is prescribed by the regulations.”

Regulatory objectives

The objectives of the regulatory framework are set out in the Port Management Act 1995 (Vic) and include:

  • promoting the efficient use of, and investment in, the provision of Prescribed Services for the long-term interests of users and Victorian consumers
  • ensuring tariffs for Prescribed Services are fair and reasonable whilst having regard to the level of competition in, and efficiency of the Port of Melbourne
  • allowing the Port of Melbourne to recover its efficient costs of providing Prescribed Services
  • facilitating and promoting competition between ports, shippers and third party operators.

See section 48 of the Port Management Act 1995 (Vic) for the full definition.

Pricing principles

The regulatory framework is based on established pricing principles and regulatory mechanisms. Amongst other things, the pricing principles provide that until at least 30 June 2032, tariff increases for Prescribed Services (other than full outbound container tariffs) are constrained by the lower of the:

  • Annual percentage change in the Australian (all groups) Consumer Price Index (CPI). This cap on tariffs is referred to as the Tariff Adjustment Limit (or “TAL”); or
  • Tariffs implied by the forecast Aggregate Revenue Requirement calculated using an accrual building block methodology.

Port of Melbourne currently expects that tariffs for Prescribed Services will be subject to the TAL and therefore increase in line with the annual increase in CPI until 30 June 2037. This is because tariffs implied by the Aggregate Revenue Requirement are expected to be higher than tariffs subject to the TAL over this period.

Tariffs for full outbound container wharfage services will decrease by 2.5 per cent per annum until the year ending 30 June 2020.

From 1 July 2037, Port of Melbourne expects that tariffs for Prescribed Services will be set using the forecast Aggregate Revenue Requirement calculated using an accrual building block methodology.

Port of Melbourne obligations

The Port of Melbourne’s obligations under the Pricing Order include:

  • Publishing its Reference Tariff Schedule on its website by 31 May each year
  • Submitting a Tariff Compliance Statement to the Essential Services Commission by 31 May each year
  • Complying with the pricing principles when setting Prescribed Service Tariffs.

Regulatory quick links