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A new $158 million cruise ship terminal at the mouth of the Brisbane River has hit a snag, with the Australian Consumer and Competition Commission reporting the joint venture proposal from the Port of Brisbane and cruise operator Carnival could “limit or prevent competition”.
The ACCC on Friday asked both the Port of Brisbane and Carnival to provide more information on the Queensland government’s “market-led” proposal by April.
The proposal taps into growing demand for mega-cruise ships – 270 metres or longer – to operate permanently from Brisbane, targeting cruises to the Whitsundays in north Queensland and the South Pacific.
Mega-cruise ships are too large to berth at Portside at Hamilton and now berth at the huge grain terminal at the Brisbane River mouth, which has limited facilities for cruise ships.
The Queensland government approved the project in October 2017, which was predicted to double the number of cruise ships in Brisbane.
The ACCC ruling said the cruise ship terminal is a valuable new industry for Brisbane, but criticised parts of the case.
"A new dedicated cruise terminal in Brisbane, capable of berthing the increasingly popular ‘mega’ cruise ships, would be a real public benefit to the community as this is infrastructure that is currently lacking in Brisbane,” ACCC Commissioner Roger Featherston said.
“Of course the ACCC recognises that commercially, having a foundation customer helps to underwrite the projected $158 million investment for the Port of Brisbane to build the new terminal.”
But the ACCC questioned the preferential “berthing rights” requested by Carnival for the new cruise ship port.
Carnival proposes to pay an annual fee to the Port of Brisbane Authority for 15 years in return for “first pick” of 100 berthing days at the new cruise ship terminal as part of the agreement, to a maximum of “four days a week”.
ACCC commissioner Roger Featherston said in a media statement on Thursday that the proposals could restrict competition for the cruise ship industry in Brisbane.
“... We do have concerns about aspects of the agreement, particularly in relation to the four days a week Carnival is proposed to have preferential access to the terminal,” Mr Featherston said.
“This may limit or prevent competition from other cruise liners wishing to dock at the terminal in Brisbane during the peak summer cruising season."
It has also questioned Carnival’s “first right of refusal” for a proposed second terminal at the mouth of the river, which is yet to be planned.
That second terminal is seen as a 10-to-15-year future development.
“We are concerned this will block other cruise operators from being able to offer alternate cruise options to consumers in Brisbane,” Mr Featherston said.
“For this reason, the ACCC proposes to impose a condition on the authorisation, that Port of Brisbane and Carnival not give effect to these provisions of their agreement.”
Carnival argued the berthing requests were necessary for its $158 million economic investment and that Brisbane's Portside wharf, the proposed Gold Coast cruise terminal and Sydney's port ensured competition for its Brisbane proposal.
The Port of Brisbane Authority said it was aware of the ACCC’s ruling and issued a short statement.
“Port of Brisbane Pty Ltd will assess the ACCC’s draft determination and respond according to established processes,” a spokesman said.
“We don’t intend on commenting further while the process is ongoing.”
Carnival operates nine cruise ship companies including P&O Cruises Australia.
It also said it would not comment while the ACCC process was under way.
"Carnival Australia will review the ACCC’s draft comments and respond as part of the usual process ahead of the regulator’s final determination. We respect the ACCC process and will engage directly rather than comment while it is under way".
Carnival wants to bypass Sydney because its port facilities are "space constrained".