Increased Surveillance and Action on Overweight Co

In a recent letter to AFIF, The Port of Melbourne Corporation has advised us of the following status of the Port Licence Fee recovery:

As part of the Port Licence Fee (PLF) implementation process, Port of Melbourne Corporation (PoMC) advised industry that it would provide a status report on the PLF recoveries following the completion of the first half of the financial year. The purpose of this letter is to provide this information to industry.
For the first six months of the financial year (1 July to 31 December) PoMC recovered $36.5 million related to the PLF. This is approximately 5 per cent ($1.8 million) less than PoMC’s estimated amount for the half year. The under recovery is mostly due to lower trade growth than forecast, particularly in containers. Total container trade for the financial year to date (31 December) was in fact below that recorded for the same period in 2011-12 and has been affected by a fall-off in both international imports and exports. This is reflective of the current slow economic conditions that are prevailing in the domestic economy, particularly the eastern states.
The variance between the budget figure and the actual PLF revenue collected is not unexpected and as noted in PoMC’s PLF March Information Paper it was always assumed that there would be some over or under recovery of the PLF.

The reasons, as outlined, were that the tariff rate increases to recover the PLF were based on assumptions regarding the forecast trade growth for each trade sector, and the seasonal fluctuations in the port’s annual trade throughput. However, this interim outcome appears to be consistent with the broad range of the outcomes forecast for the recovery of the PLF provided to industry last year (i.e. between $70 million and $80 million). While it is too early to make any predictions regarding the full year results and their impact on the PLF recovery, it must be said that a continuation of the current below forecast trade growth outcomes will impact on the end of year results.

It should be noted that the principle adopted to reconcile any over or under recovery each year is an adjustment to the subsequent year’s charges. As part the stakeholder engagement program associated with PoMC’s review of its pricing for 2013-14, PoMC will provide another update to industry following the completion of the third quarter of the financial year. At that point in time PoMC will be in a better position to inform industry of the likely impact of the recoveries on price adjustments for 2013-14.

Please ensure all relevant parties are advised accordingly

Thanks and regards

Brian Lovell
Chief Executive Officer