THE State Government is commissioning an inquiry into TasPorts’ wholly owned subsidiary Bass Island Line (BIL) to determine the shipping contribution to King Island price-setting.
The independent inquiry into matters around BIL’s pricing policies is commissioned under the Economic Regulator Act 2009. Treasurer and Infrastructure and Transport Minister Michael Ferguson said in a statement that he recognised the importance of establishing confidence in the Bass Island Line service.
“It is considered that an inquiry into matters affecting the company’s pricing policies would assist in addressing concerns with regard to its role in the market. “However, the Government acknowledges ongoing concern by King Islanders with regards to high retail prices of goods on the island, in comparison with mainland Tasmania.
“It is timely that a Prescribed Bodies Inquiry is held into Bass Island Line pricing policies. “The Government takes the view that current pricing policies be tested in an independent and objective manner. “An independent inquiry will allow prices and costs to be examined at arm’s length from Bass Island Line, its parent company TasPorts and the Government.
“The inquiry’s findings will inform future planning for King Island shipping services,” Mr Ferguson said.
TasPorts CEO, Anthony Donald said in a statement that TasPorts looked forward to the opportunity to work with the Economic Regulator to demonstrate that this important shipping service is being delivered within a sound pricing policy framework. “We await the Terms of Reference to better understand how we can engage with the Economic Regulator.”
The Independent MLC for Murchison Ruth Forrest chaired the King Island Freight Inquiry in 2017 which looked at the reliability, costs, service delivery and future shipping plans for King and Flinders Islands. During 2022, Ms Forrest pursued the King Island shipping, freight, and fuel cost issues in the Tasmanian Legislative Council after TasPorts’ decision to cut the King Island – Victoria direct link to markets and the introduction of a Sea Road transhipping solution in Devonport.
The barge, John Duigan was originally purchased to handle the Bass Strait King Island triangular route freight task and the barge is deemed ‘not fit for purpose’ for the rough Bass Strait conditions. Notwithstanding Australia wide cost of living rises of the past couple of years, the TasPorts decision to the drop the King Island mainland return leg, separated island businesses from longstanding buying group contracts, led to dramatic on island price rises and supply chain disruption.
King Island Mayor Marcus Blackie said the costs of living were up across the board for all King Islanders. “We are also experiencing shipping delays that were not prevalent in the past,” he said.
“In particular fuel here on King Island (supplied and distributed by TasPorts) is now the most expensive it has ever been, with diesel retail hovering around $2.80 per litre. “King Island currently endures a sub-optimal one-way shipping service that is expensive and not always able to achieve schedules. “This impacts all commerce and freight, increases handling costs and also brings in supermarket goods via the long way, thereby increasing prices and reducing retail shelf life.
“King Island produces disproportionate agricultural outputs for our size and obviously we are heavily reliant on shipping logistics to get it out to market, including livestock. “Ideally King Island requires a triangular service that sails directly between KI-Victoria-Tasmania with schedule certainty.
“Furthermore, down the track when resources become available, we need to expand our Port at Grassy to become a larger all-weather safe harbour, thus able to receive bigger RORO ships.
“Overburden being produced by the Grassy Tungsten Mine over the next five to 10 years is a golden window of opportunity to achieve this. “King Island welcomes this inquiry into shipping pricing arrangements by the Regulator and I therefore acknowledge involvement from the Treasurer and ongoing support on all shipping related issues from our local MLC Ruth Forrest,” Cr Blackie said.
The inquiry terms of reference are still to be determined and both Ms Forrest and Mayor Blackie have called for fuel pricing to be included.
Mr Ferguson said terms of reference will be prepared for the Inquiry with a completion date to be determined as part of that work, expected to be mid-2023.