MTC confronts its regulator over tariffs at the Chancay Megaport

The Supervisory Body for Investment in Public Transport Infrastructure (Ositrán) will insist on a response to Indecopi to initiate a port regulation procedure for Cosco Shipping operations in the megaport of Chancay, despite the fact that the Ministry of Transport and Communications (MTC) announced the end of the controversy over the exclusivity of services and a new framework to promote competitiveness in the sector.

The Chancay controversy, aired under the umbrella of the FTA with China until November of this year – under penalty of international arbitration – navigates on two fronts: the exclusivity of services already resolved with the approval by Congress of changes to the port law and the regulation to which the terminal could be affected during its operations by Ositrán. The tariff scheme that the Chinese-owned company would have to assume is linked to this second aspect.

For this purpose, Ositrán filed a complaint with Indecopi to clarify the jurisdictional framework with which it will apply its role and rates on the services that Chancay will have. Given the regulator’s refusal, the supervisor sent a letter of reconsideration. What the MTC-affiliated entity does not want is for Cosco to have a “kind of free rein to operate in Peru without any regulation,” but it is not willing to present a study “on its own,” since that is what Indecopi is for. Ositrán defends its privileges.

“In 2017, Ositrán sent a letter to the National Port Authority (APN) indicating the jurisdiction it had over Chancay, being a private port for public use, and this was notified in October of that year when they were not yet called Cosco Shipping Chancay Ports. Now, we do not know why they want to object to the regulation,” he said. Veronica Zambranopresident of Ositrán, during the launch of DP World’s Bicentennial Pier.

Arbitration with China?

At the same event, the head of the MTC Raúl Pérez-Reyes said that his portfolio is reevaluating “the type of service that port activities will now have, within the framework of a competitive process.” In practice, change the framework law and the regulations of Ositrán with a view to the APEC 2024 summit, where the Chinese president, Xi Jinping, will have to cut the ribbon.

Favio León, head of the Peruvian Association of Port Operators (Asppor), explains that the Cosco terminal will act as a “natural regulator of prices” in the market, and as long as the movement of containers does not reach a cargo volume of 70%, Indecopi would have to intervene to decide on the free competition of the services provided by DP World (Callao Sur), APM Terminals (Callao Norte) and Chancay. The latter, it is worth clarifying, does not respond to a concession, since it is built on private land.

If Indecopi concludes that there is no competition, the APN would apply a tariff to Chancay. Regulation only occurs when there is no competition; When there is – that is, many who provide the same service and there is no monopoly – then Ositrán only comes in to supervise.

Initially, a rate similar to that of the nearest port would be applied, in this case, Callao. A price marker differentiated according to the service provided, such as loading or unloading of containers, and taking into account factors such as the destination of the shipment, the weight of the cargo, etc.

“They want to somehow change the regulations. They have already managed to obtain exclusivity, even though it was not their right. To say that they will not be supervised is already excessive.”Zambrano believes.

The services that Chancay will offer

According to the APN, Chancay will be able to offer technical-nautical services (pilotage, towing, mooring and unmooring, diving), passenger services (transporting people), handling and transportation of goods (embarkation, stowage, disembarkation, unstowing, transhipment, storage, provisioning , fuel supply) and waste collection services generated by ships.