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19 December 2012
Mooring facilities in the Valparaiso region are subject to a number of rules and restrictions in order to ensure that free competition is maintained. A recent decision of the Court for the Defence of Free Competition has detailed the conditions that should apply in relation to the tender for Terminal 2 at Valparaiso port.
The Ports Fiscal Law (19,542/1998) modernised the ports fiscal sector and gave the former Chilean Antitrust Central Preventive Commission (now replaced by the court) the authority to notify competition conditions that should apply in the event that a fiscal port company decided to offer its port facilities under concession, thereby changing its exploitation regime from a multi-operator to a mono-operator system (and essentially creating a monopoly over the respective terminal).
Following the introduction of the new regulations incorporated by the law, the port fiscal companies of Valparaiso and San Antonio put a number of their terminal facilities out on tender. As part of the process, a number of horizontal restrictions were established and the companies that operated the current concessions were restricted from bidding for new concessions in same area. Furthermore, vertical restrictions were established that, in general terms, prevent relevant users of the respective terminal under concession from holding shares in the concessionaire company that runs the terminal or holding rights over its profits, exceeding certain margins.
During 2011 the Valparaiso fiscal port company Empresa Portuaria Valparaíso (EPV) commenced a new bidding process for its Terminal 2 facility, which failed due to a lack of interested parties. As a result, EPV consulted the court regarding new conditions that should apply in order to make the new tender process more flexible and successful.
On November 22 2012 the court issued Report 8, which deals with the above-mentioned petition from EPV.
The court recommended that EPV carry out the tender process in two stages, with offers from the current incumbents (the second group) submitted before those from the new applicants (the first group).
All offers must be considered individually, with the winner being the bidder that offers the lowest tariff index for the basic services, provided that such offer is technically admissible. However, if the best offer is made by an incumbent (ie, a party that is within the second group), the best bidder from the first group will have the right to express (within a specified period) whether it is in a position to match the lowest tariff rate. If so, the new bidder will be given the concession. Otherwise, the concession will go to the incumbent.
If the concession is granted to an incumbent, as per the previous rule, the incumbent will be exempt from complying with the horizontal restrictions rules. However, these restrictions will be maintained for other incumbents, thus preventing them from having access to the property or control of the Valparaiso Terminal 2 tender. Furthermore, for these incumbents the prohibition is now total - they are not allowed to have even a small share, as was permitted under the old regulations. On the other hand, the awarded incumbent will not be allowed to transfer the concession wholly or partially, or to integrate, unless otherwise authorised by the court.
If the tender is awarded to an incumbent, the EPV must also inform the antitrust prosecutor about the winner's compliance with the investment milestone, so that the prosecutor can execute such actions as it deems necessary in relation to any infraction of antitrust regulations.
The court's report is currently subject to a number of different actions filed by some of the Valparaiso and San Antonio incumbents, the Chilean antitrust agency and a ship agents' union, which may delay the commencement of the Valparaiso Terminal 2 tender.
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