Port bloc in bid to avert probes

The Competition Commission is consulting the public over whether it should accept five commitments by the Hong Kong Seaport Alliance and spare it from investigations.

The alliance comprises Hong Kong Seaport Alliance, Modern Terminals, Cosco-HIT Terminals (Hong Kong) and Asia Container Terminals, which jointly operate and manage 23 berths across eight terminals at Kwai Tsing.

The four operators control over 90 percent of market share. A fifth, Goodman DP World Hong Kong, is not an alliance member.

The watchdog yesterday said the alliance is not likely to have an anti-competitive impact on international and barge transshipments as there are alternative service providers and their combined market share is not high enough. But it is different in the gateway market, where the alliance has a very high market share and there are no other competitors except DP World.

"The [four operators] are therefore unlikely to be subject to effective competitive constraint in this market, and could potentially increase charges, or reduce service levels," it said.

To earn the watchdog's trust, the alliance made five commitments, including capping charges to shipping lines and other customers in respect of gateway cargo to the level of April 1 last year, subject to adjustments based on set criteria.

The alliance also guarantees that service standards will be maintained at a "minimum" level and reciprocal agreements with DP World will be maintained.

The commitments would last for up to eight years, and an independent monitoring trustee will keep track of its implementation on behalf of the watchdog.

The watchdog asked the public to submit opinions by 6 pm on August 26.

Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council, proposed that the cap of services charges should also cover charges to shippers and clearly state the penalties if the operators fail to comply with their commitments.