Carnival Corp priority for Brisbane terminal

CARNIVAL Corporation ships will be allocated almost a third of the berthing slots at the new Brisbane cruise terminal ( CW 26 Oct) under a proposed “take or pay” agreement with the Port of Brisbane Pty Ltd (PBPL) which will help underwrite the project.

Details of the deal have been revealed in a joint application by Carnival and the Port of Brisbane to the Australian Competition and Consumer Commission (ACCC), seeking authorisation for the pact.

“In order to support PBPL’s significant investment and ensure that the proposed development is commercially viable, Carnival will be bound by take or pay obligations, providing a guaranteed customer base and revenue stream,” the Carnival/ PBPL application states.

“In return, PBPL will provide to Carnival certain priority berthing rights, subject to the common user principles set out in the agreements.”

The filing claims that without the pacts the Port would not have the “incentive or ability” to make the necessary investment in the project, while Carnival would not have the incentive to guarantee a sufficient base level of business to make the facility viable.

The companies had sought urgent interim authorisation for the deal, however this afternoon the ACCC announced it did not believe an interim authorisation was necessary.

The ACCC says it will instead make a determination on the authorisation in the first half of 2018, with a draft determination expected in Jan.

The new terminal will be able to accommodate the growing number of large cruise liners that are currently unable to dock at Brisbane’s Portside wharf & have to operate from the Grain Wharf at Fisherman Islands where there are no appropriate passenger and tourism facilities, and only 30 available spots per annum.

Being able to cater to the large ships will provide a significant contribution to the Brisbane economy, the application argues.

It says the development “will result in significant public benefits that will far outweigh any potential lessening of competition” due to the deal.

Carnival brands will be allocated 100 “Foundation Berthing Days” annually, along with the ability to purchase additional Priority Berthing Days - but the limitation that it cannot be allocated more than four Foundation and Priority Berthing days in a week or 18 berthing days in a month.

The filing said common user principles will “guarantee access to other cruising companies, including during peak season”.