We have conducted a preliminary assessment of the costs and benefits of regulating Eastland Port and decided in 2015 not to commence a Part 4 inquiry.
In 2012 Eastland Port substantially increased the prices it charges its forestry customers who use the port to export logs from the Gisborne region. These prices may lead to excessive profits accruing to Eastland Port which is not in the long-term benefit of consumers.
In April 2012 we received a complaint from the Eastland Port Forestry Industry Customer Group (EPFICG) concerning the extent of price rises notified by Eastland Port.
After assessing information received from EPFICG, we issued a draft preliminary assessment in October 2012. This was issued to Eastland Port and EPFICG to gather their views on our initial position. At this stage we did have some concerns with the conduct of Eastland Port but considered the benefits of regulation were unlikely to materially exceed the costs.
After considering responses received we undertook further work including gathering and analysing further information from Eastland Port. This included the financial model used by Eastland Port in setting its prices.
In June 2014 we issued our finalised preliminary assessment in a letter to Eastland Port, stating that we expected to commence work on a Part 4 Inquiry in 2015.
In September 2015, EPFICG wrote to the Commission advising us that it had reached a commercial resolution with Eastland Port. Eastland Port has confirmed this outcome too. As a result, we confirmed to both parties that we consider commencing work on a Part 4 inquiry is not justified, and that our work on this matter is complete.
During 2015, we engaged with EPFICG and Eastland Port on a regular basis to monitor progress in their ongoing negotiations. Given the long and potentially costly Part 4 Inquiry process, we are satisfied that this issue has been resolved in the best long-term interests for consumers and all parties involved.
