Commission challenges regulated access
The Productivity Commission has released a draft report into the access of national significant infrastructure, saying that legislation governing regulated third party access should be changed.
In releasing the report, Presiding Commissioner Patricia Scott said that changes must be made to the existing legislative framework to boost productivity in the freight sector.
“The National Access Regime contains regulatory powers that can affect investment both positively and negatively. Those powers need to be better focused to where access regulation is likely to generate net benefits to the community,” Ms Scott said.
The National Access Regime, established under Australia's competition law, grants third parties a right to negotiate access with infrastructure owners after a ministerial decision to 'declare' the infrastructure.
Infrastructure that has been subject to declaration applications in the past includes rail lines in the Pilbara and the Hunter Valley, and airport facilities used for cargo handling and the supply of jet fuel.
“While there have been six decisions that granted declaration over the past 17 years, the limited use of declarations does not mean that the Regime has been unsuccessful. Only in exceptional circumstances should third party access to infrastructure be regulated,” Ms Scott said.
“The threat of regulated access must be credible and encourage private settlement of access disputes. But balance must be found so investors can build and expand infrastructure without undue concern that their business decisions will be affected by access regulation where it is not justified.”
The Australian Competition and Consumer Commission (ACCC) can determine access terms if third parties are unable to reach agreement with the owner of declared infrastructure. In certain circumstances, when making a determination on an access dispute the ACCC can direct owners to extend their infrastructure to accommodate use by third parties.
The ACCC has not been called on to use its power to direct extensions but Commissioner Scott said that 'The power to direct owners to extend their infrastructure is potentially very strong and regulatory certainty would be improved if the ACCC published guidance on how it would exercise that power.'
The Productivity Commission will be holding public hearings in July and is seeking responses to its preliminary recommendations before submitting its final report to the Australian Government in October 2013.