Ports of Jersey responds to CICRA published Initial Notice on future price levels
From Port of Jersey,
02 July 2019
Ports of Jersey has issued a formal response to a statement released by CICRA on Monday 01 July 2019. The CICRA notification reads as follows:
The Channel Islands Competition and
Regulatory Authority (The Competition Authority) has published its Initial
Notice relating to proposed price increases from Ports of Jersey Limited
Price control is a regulatory tool commonly
used by regulators where an incumbent supplier faces little or no actual or
potential competition from other suppliers, as is the case with PoJL. This
means that commercial pressures are not present to the same extent and a fair
balance between their interests and other consumers is not always assured. To
redress this, regulators scrutinise these businesses to ensure decisions such
as price rises are better controlled.
The Competition Authority has been working
closely with PoJL to agree a five-year framework which will allow the business
to increase prices for those products and services that are regulated under the
Law. The process has included reviewing PoJL's proposal and consulting
publicly, to evaluate if the requested increases are proportionate and to
consider the impact on port users and consumers.
The Competition Authority is also mindful of
PoJL's strategic business objectives and the need to ensure it can deliver
these in a sustainable way. The effect of price control regulation is therefore
to protect consumers from unreasonably high prices whilst at the same time
providing incentives for PoJL to become more efficient in operations and to
seek out new ways of growing its markets.
The Competition Authority proposes to direct
PoJL that regulated prices for individual products be allowed to increase
annually throughout the five-year price control period by a maximum of RPI +
1%, from January 2020 to December 2024.
The control will be formally monitored on an
annual basis with a full review in 2022 to allow for any adjustment to be made
for a second five-year control period (from January 2025).
The Initial Notice is published today and, if
no written responses are received from PoJL within the specified period of
time, the Authority will issue a Direction to PoJL, which will then become
legally binding. If written responses are received from PoJL, the Competition
Authority will consider these and either issue a Final Decision, a new Initial
Notice or decide not to take the proposed action.
Full details of the Initial Notice and
supporting information can be found on the Competition Authority's website www.cicra.gg
Ports of Jersey response statement, issued via media on Tuesday 02 July 2019 as follows:
"Ports of Jersey welcomes this Initial Notice, which represents an important step forward in developing our relationship with CICRA and we are hopeful that this forms a solid basis for future periods as the framework meets the needs of our business and customers.
Ports of Jersey acknowledges that although the Final Notice will be subject to any amendments, importantly it now allows us to proceed with a degree of certainty and optimism with the ability to invest in future initiatives, which will be of immediate and long-term benefit to both our existing and future customers.
Ports of Jersey remains committed to engaging directly with our relevant customers as we have previously done in relation to price increases from 2020".