Recent increases to ports tariffs will have little or no impact on the price of goods, according to the Attorney General and Minister for Finance Hon. Aiyaz Sayed-Khaiyum. He was responding to claims by the Fiji Ship Owners Association (FSOA), which he said had misrepresented the impact of the tariff increases and failed to acknowledge the Government’s efforts to involve FSOA in the decision-making process.
“There is no validity to the negative claims made by FSOA. The Fiji Commerce Commission (FCC) – before recommending new fees and charges – wrote to FSOA inviting their comments and also met face-to-face to discuss the proposed increases,” said the AG.
Per an assessment conducted by the FCC, ports charges and fees constitute only one per cent of total import costs for goods and the recent increases will have an insignificant impact on Fijian consumers.
“There have been zero increases in ports fees and charges over the past six years despite increases in operating costs for Fiji Ports Corporation Limited (FPCL). Additionally, we have undertaken a detailed assessment that has determined these increases are an accurate reflection of economic and market conditions and will have a negligible impact on the prices of goods,” said the AG.
The AG went on to describe the achievements of the FPCL and Fiji Ports Terminal Limited (FPTL) in optimising ports services in 2013 and 2014. The FPCL and FPTL have reduced waiting times, increased average container movement and improved cargo handling – resulting in the removal of port congestion charges.
“Has FSOA actually passed these savings on to consumers? Indeed many businesses in Fiji tend not to pass on such savings. They need to do so as it could have an actual impact on the welfare of Fijian consumers,” said the AG.
The AG explained that the lack of increases in ports fees and charges over the past six years left the FCC with limited resources to improve port facilities and meet the increasing needs of importers and exporters.
“We need to ensure that Fiji’s goods transportation hub status is enhanced significantly by having the best port facilities that will enable fast clearance of goods. The price determination by the FCC will allow them to work with FPCL to further improve their ports services and enhance Fiji’s position as an attractive trading partner,” said the AG.
Under the current system, FSOA bundles all ports charges and fees on their invoices — failing to distinguish between ports tariffs and agency and liner fees.
“This lack of transparency does a disservice to consumers and hides the fact that FSOA’s terminal handling charges nearly double the final ports charges for shipping containers. The burden is on FSOA to itemize these charges so that it is clear that ports tariffs are only a small part of total shipping costs,” said the AG.
Under the Commerce (Control of Prices for Ports and Marina Management Services) Order 2015, the FCC can regulate and control prices for ports and marina management services. Prior to these recent reforms, the last review of the ports fees and charges occurred in September 2009.