The Australian Competition and Consumer Commission has challenged claims from some airport shareholders that they are not allowed an adequate rate of return on their investment.
Addressing the Airports and Aviation Outlook 2000 conference in Perth, the ACCC Commissioner responsible for transport, Mr John Martin, said investment continued at airports.
"Since 1997, the ACCC has received applications from all the larger airports including new terminals at Adelaide, Melbourne and Sydney airports as well as new apron facilities at Canberra, Darwin and Perth.
"This seems to indicate that the ACCC's approach has not deterred investment at the privatised airports".
In its new investment decisions, the ACCC has proposed that airports could earn on average, after-tax returns on equity of around 15 per cent nominal. This compares very favourably to the Australian Stock Exchange ten-year average (All Ordinaries) of about 11.3 per cent.
Infrastructure owners traditionally claim that the regulator is too parsimonious in setting the levels of appropriate commercial returns.
"But the ACCC's role is to make decisions about prices that are cost-reflective and fair, whilst at the same time allowing regulated businesses to earn a commercial rate of return".
Concluding his address, Mr Martin also warned about the imposition of additional charges in those areas that are outside the cap but where individual airports can exercise market power.
"The imposition of these charges could have the effect of undermining the regulated price reductions".