In our last Marine Bulletin2 , an analysis was undertaken of the technical-nautical services provided within Italian ports, focusing our attention on the critical aspects involved in statutory provisions and practices related to the mechanism for setting the relevant rates.
We are now addressing a further important aspect of this issue.
Technical-nautical service rates are set by the Italian Ministry for Transport and Navigation as a result of a preliminary activity jointly conducted by the Port Captaincies General Headquarters, organisations representing Port Authorities and representatives of providers of port operation services and users/customers3 .
To this aim, at the end of each two-year period, Port Captaincies undertake an investigation regarding their respective ports to examine the organisation and performance of the various technical-nautical services. The results of such investigation are reported to the Ministry for Transport and Navigation and constitute the “database” on which the Ministry bases its work in order to adjust the rates for the provision of such services.
Typically, review is biennial. It has been often argued that biennial review prevents prompt adjustment of rates in case, for example, of traffic changes involving increase in costs sustained by concession holders. A two-yearly adjustment is on the other hand likely to involve significant increase in rates, due to the necessity for a concession holder to recover ex post any loss incurred in the period when customer traffic and port operation services decreased.
A change of course has however occurred in one of the major Italian ports. Indeed, the Port Captaincy of the port in question, taking note of the request – by a company holding a concession in respect of the above-mentioned services – for early adjustment of the economic items of the current rates, undertook a new preliminary investigation, involving obtainment of opinions from the Port Authority, service providers and users/customers concerned.
The Port Captaincy then reported the results of its investigation to the Ministry for Transport and Navigation. In its accompanying note, the Port Captaincy suggested to uphold the request for immediate adjustment of the towing service rates applied by the company concerned. Furthermore, the Port Captaincy suggested that the next adjustment be brought forward to the first annual deadline without waiting for the usual biennial deadline.
The Ministry (which until that time had rejected any hypothesis of emergency adjustment derogating from the biennial one) endorsed the said proposal, giving favourable opinion to early review of the rates applicable to the technical-nautical services provided in the port.
Such explicit admission of the inappropriateness of the statutory mechanism for biennial review of rates is undoubtedly significant. Has perhaps the time come for a radical review of the rate setting mechanism that takes into account the opposing interests of the parties involved in accordance with market rules?
A scenario where port operation services change and their rates remain unchanged is likely to result in a dysfunction affecting both port operation service providers and users. Users might indeed end up having to pay rates not in accordance with the services received.
We hope that the case discussed here may serve as a valid precedent and, in general, that the port operation services provided in all Italian ports may in the near future be subject to constant and effective monitoring and their rates more frequently adjusted.