The Australian Competition and Consumer Commission will not intervene in the proposed joint venture between Flinders Ports Holdings Pty Ltd and DP World (SA) Pty Ltd, after accepting a court-enforceable undertaking from Flinders Ports, ACCC Chairman, Mr Graeme Samuel, said today.

Under the proposed joint venture, Flinders Ports and DP World (SA) would become shareholders in an entity called Adelaide Container Terminals which would be granted a right to conduct container stevedoring at the Container Terminal until 30 April 2039.

Following market inquiries and through a Statement of Issues released in relation to the proposed joint venture, the ACCC was concerned that Flinders Ports, through its dual role as port manager and co-owner of the incumbent container stevedore, would have the incentive and ability to prevent prospective container stevedores from developing another terminal at Port Adelaide to serve growth in container traffic in the future.

"Post-transaction, Flinders Ports would be responsible for allocating the necessary land and licences for container stevedoring at Port Adelaide to parties which are also its potential competitors, giving rise to a potential conflict of interest with respect to future competition at the port," Mr Samuel said.

The ACCC took into account submissions that suggested that container traffic may not grow to a level to support the development of a second container terminal at Port Adelaide for some years to come.  However, the ACCC's investigation indicated that new entry was still likely to occur within the 30 year term of the joint venture, and that in the absence of the undertaking, Flinders Ports would have the ability and incentive to prevent competition during this period.

Flinders Ports offered the section 87B undertaking to address the ACCC's concerns.  A key requirement of the undertaking is that Flinders Ports will not allocate certain land and licences at Port Adelaide until the ACCC has reviewed the impact on competition.

The undertaking adequately addresses competition concerns that the proposed joint venture would increase barriers to entry in the market for container stevedoring services at Port Adelaide.  It ensures that the process used by Flinders Ports to allocate the necessary inputs for container stevedoring is transparent, and subject to review by the ACCC, whilst not impeding necessary investment in the existing container terminal.

"The ACCC is satisfied that the proposed joint venture, subject to the court enforceable undertaking, would be unlikely to substantially lessen competition in the relevant markets," Mr Samuel said.

The undertaking will be available on the ACCC's website.  A Public Competition Assessment will be issued on the ACCC's website shortly.

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