WEST PERTH, AUSTRALIA — The CBH Group said on March 24 that it has made a submission to the Australian Competition and Consumer Commission (ACCC) to replace its existing port access undertaking which expires on Sept. 30.
CBH's proposed undertaking includes the option of entering into long-term agreements (LTA) with exporters who use its port services.
CBH Operations General Manager David Capper said that its export customers have been asking for LTA's for a number of years.
“The option of an LTA appeals to customers as it provides greater certainty in terms of supply, with better planning over the long term. It also gives CBH further confidence to make investment in the Western Australian supply chain with the aim to increase capacity over the four port terminals,” said Capper. “With the added certainty in the LTA process we should be able to increase port capacity up to 15 million tonnes, from 12.7 million tonnes currently. Our long term goal is to increase capacity to 18 million tonnes to better match exporter demand with a shipping profile that is historically high in the first half of the year.”
The proposed undertaking still has the existing provisions for acquiring port capacity including the port capacity auction system.
“We have made provision for a minimum of 34% of total capacity each month to be reserved for non-LTA capacity. This capacity, and any capacity not taken up in an LTA, will be auctioned through the existing process,” he said. “By providing exporters with an option to acquire capacity outside of the auction, we'd expect that the costs of acquiring capacity in the auction will be reduced for all participants. The LTA and auction system combined will provide exporters with the flexibility to acquire port capacity in a way that meets their needs.
“The LTA arrangements, revisions to the proposed undertaking and the resulting increased certainty and investment in the grain export industry will provide benefits back to Western Australian growers and the economy as a whole.” As part of the approval process, the ACCC will call for public submissions in relation to CBH's proposed undertaking.
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