Monday, November 23, 2015

Hurtigruten and Norwegian ports – Future Requirements

Leserbrev It is believed to be known to most that over a time has been an ongoing conflict between Hurtigruten and several Norwegian ports. In the case of Stranda Port Authority has the Supreme Court (with dissent 3 against 2 votes) given Hurtigruten requesting that Stranda not have had the right to demand compensation for all passengers Hurtigruten passengers. Hurtigruten has also announced lawsuits against five ports which they have described as “the worst offenders in the port-Norway”, namely Tromsø, Finnsnes, Risøyhamn, Stamsund and Bodø, and 10 additional ports are appealed to the NCA. It can thus be seen that we go a challenging but also interesting and hopefully clarifying autumn meeting.

For those who do not have detailed knowledge of the Harbour Act 2009 (HFL) or know well framework conditions and assumptions contained ports of Norway, the case must seem complex and weird, and from a port side, it is easy to suspect Hurtigruten to use this to try to get public opinion on his side through the active use of media and rhetoric. This paper is an attempt to describe the conflict and the background to it, as seen from the perspective of a harbor.

The starting point for the conflict appears to be relatively clear: On the one hand, one has Hurtig, who believe that Norwegian harbors generally takes care for well paid for the services rendered there. On the other hand, one has ports, which mean that they administer the laws are given and that they charge in the manner legislator requests and supervisory authority NCA permits.

In order to analyze a conflict must try to familiarize themselves with both sides’ situation. Hurtigrutens position seems easy to understand. It is legitimate (and expected) that a commercial company looking for every opportunity to cut their costs and increase the owner’s profit. It is in the nature. As Hurtigruten earn their money selling “ world class experiences along the Norwegian coast “, and along the way calling at up to 34 ports, so it is not unnatural that the fee associated with calling and remuneration attached to port services constitute a significant cost for them. A cost which can now “look out.”

To understand the ports’ position requires a little more explanation. Ports represent, next to the road, rail and airport, very important infrastructure. Responsibility for this infrastructure is organized, managed and financed in different ways. Rail and road is government responsibility largely being funded through the state budget, and to a lesser extent directly by users (although user financing of road construction through tolls are becoming increasingly important). Airports are also a government responsibility, but here is the operation, development and ownership organized in a state-owned company, Avinor AS. Avinor is self-financed and operates a total of 46 airports.

The ports of Norway was in 1984 “municipalized” through establishment of a new harbor, which was later continued in the Act on ports and waterways 2009 (HFL). Today it is in Norway 60 public traffic ports which have been authorized by their municipality for a given sea area.

Economic must ports be self-financing, ie the port basically must acquire the necessary income required To maintain efficient operation according to HFL and to develop and maintain the necessary infrastructure. This means that the ports on one side commercial character and provides services to the shipping industry and other transportation and logistics players, and on the other hand, managers of critical infrastructure in the national transport network and also attends municipal responsibility for accessibility and safety in the municipality’s sea area .

Calls fee is the only tax which ports can collect. This fee shall cover all the airport’s costs relating to security and accessibility in the municipality’s sea area, as well as cover the municipality’s costs upon exercise of public authority. The municipality charges to port operations will primarily be covered through different payments (regular pricing). HFL says that whoever is responsible for the operation of the various services in the port may fix the compensation for the services on a market basis, and that compensation for services and benefits related to port activities, levied on a private legal basis.

This means that have a situation where a portion of the proceeds ( Calls fee ) are based on a defined cost structure, and another part ( different consideration ) that can be determined by market conditions. The challenge of determining compensation from a purely market assessment is that most ports are in a position with no real competition. This means that if you take out a maximum market potential in the pricing of services, then you will quickly be faced with making use of its monopoly in an improper manner. Many ports therefore choose to base the pricing of the different consideration of a model in which one adds costs due, plus provisions for future investments and a small profit margin on top.

Based on the argument that Hurtigruten uses when they attack the ports, it may seem as if it is the legislation underpinning for calculating fees and compensation they will to life. This is made clear through several statements in the media: Hurtigrutens communications director will “ a systematic misuse of new port ” to life and she points out that several ports have “(…) took advantage of its position as monopolists “. NHO Director General Harald Thomassen uses the same rhetoric when he leads Hurtigrutens case and says that “ The ports continues its obfuscation and belittling of port dues ” and follow up with that “(…) NHO Maritime is concerned that no one should be put in a situation where they are left to ports’ own assessments of what they may claim paid . ” These are examples of some of the statements that we believe is incorrect, and is performed in an unreasonable manner.

An important task for a port is to ensure correct collection of tax and consideration, so that the municipality can maintain their responsibilities under the HFL. We should be able to assume that Hurtigruten and harbors agree. Hurtigruten wants a change in HFL (or in the interpretation thereof) that enables Hurtigruten get away with paying a smaller share of the costs for infrastructure than is the case today, is another matter. The case must be happy Hurtigruten trial in criminal justice, and if lawmakers decide to give Hurtigruten right will obviously harbors abide by it. But the consequence will then have to be that other operators that use the same facilities have to pay more and that the considerations thus will have to increase.

The arguments Hurtigrutens CEO performs in the media as saying that: “ We have taken up the fight on behalf of all shortsea shipping along the coast (…) “falls on its own absurdity, when the remaining shipping will have to pay more if Hurtigruten should pay less.

As a basis for the calculation of both calling fees and different consideration is thus the cost required to operate a port in accordance with HFL. These costs are the ports obliged to levy. Through their statements through the media, it may seem as if both Hurtigruten and NHO Maritime ascribe ports that, without governance, set a tax rate that is not anchored anywhere. We think this is completely wrong and witnesses at best a lack of knowledge of the ports’ framework and mission.

Another quote that has been used by Hurtigruten Media’s claim that the ports “(…) do not want to negotiate with major users of the port . ” This we feel that harbor not left in. We are very aware that we have a business relationship with both Hurtigruten and all the other players that use ports’ infrastructure, and we have therefore established a system of discounts for our largest customers which we believe is both transparent and predictable. Having said that we would like to emphasize that we are open to that things can be done better and more just, and we will therefore conduct a new review of our discount system.

The Supreme Court handed down in June this year dom in “Stranda case” and gave Hurtigruten right that Stranda Port Authority is not entitled to levy passenger compensation for all passengers on board the ships, but only for those who go ashore and may use the facilities on land. This case believe we have little or no transfer value for other disputes between Hurtigrutene and harbors, and can, in our opinion not performed as proof that “ Hurtigruten has been exacted illegal taxes from public agencies over many years ” which CEO of Hurtigruten, Daniel Skjeldam, says to NRK when commenting on the matter.

Hurtigruten to have to enable the use of the available means to achieve its goal of increased profitability for their owners. This we respect, although we are critical of their rhetoric and disagree in case they perform. For ports, as public enterprises, however, it is paramount that we first and foremost respect the legislation that we have to deal with, and that gives us evidence of the calculation models used. We believe that Hurtigruten also must respect.

LikeTweet

No comments:

Post a Comment