study found unfair practices between ports

Ecuadornews:

An investigation by the Superintendency of Market Power Control revealed irregularities in the operation permits of private terminals.

The Superintendency of Market Power Control (SCPM) determined distortions in terms of competition between economic operators in the Ecuadorian port market.

According to the study of the port market published this April 17, the operating permits of Puerto Bananero, Bananapuerto S.A., Terminal Fertilizers and Services S.A., Fertisa and Granulated Fertilizers, Fertigran S.A., were not granted under legal grounds of public port service.

In the analysis, which covers the period 2011-2017, it is evident that the distortions are based on the existence of two operation models (delegation and administrative act), which in turn do not generate similar rules for the provision of general cargo service and Containerized The operation of the ports is regulated by the Constitution, the Organic Code of Production, Trade and Investment (Copci), Decree 810 on the granting of permits and, in the case of the study, the Organic Law of Regulation and Control of the Power of Market (LORCPM).

s had to be delegated through a public tender. The Ministry of Transport and Public Works (MTOP) informed the SCPM that the operation permits of Fertigran, Fertisa and Puerto Bananero, Bananapuerto S.A., were declared confidential. Additionally, the Superintendency infers that there are administrative links between the operators, which is why it suggests a thorough investigation.

The lawyer Fausto Alvarado, expert in competition law issues and author of the LORCPM, explained that the distortions determined in the study are transferred to the market with unfair competition, since the permits were delivered without respecting the rules and under different conditions. That “is not healthy for the market.”

The next step, said Alvarado, is to determine how those operating permits were established and determine responsibilities. “If they were going to provide public services, it had to be through the concession regime and in accordance with the provisions of the LORCPM. As private ports they can only use the port exclusively for their use. ” At his discretion the laws of the matter are absolutely clear.

If a loss is determined for the State, the LORCPM establishes potential penalties of up to 12% of the sales volume of the last year, but may vary depending on the impact. One of the damaged companies would be the concessionaire Contecon, which operates in the port of Guayaquil.

The Superintendency, in addition to verifying that the concession contract with this operator complies with all the regulations, also concluded that this firm lost in 2017 about 30% of its market share in favor of Fertigran and Bananapuerto. José Antonio Contreras, general manager of Contecon, explained that they detected the bad practices since 2007 when they were still small ports, but “the State allowed its operations to expand”.

According to his calculations, the State has stopped collecting around $ 82 million for variable considerations up to 2018. Recommendations The report of the Superintendence gives five recommendations to the Undersecretariat of Ports, Maritime and Fluvial Transport of the MTOP. Among them suggests developing a reform project to the regulations governing the port sector that is subject to the Constitution, the Copci, the ruling of the plenary of the Constitutional Court and Decree 810.

To avoid distortions that jeopardize the stability of the market and the public interest is recommended not to issue authorizations, permits or licenses and renewals that imply the granting of authorizations to operate multipurpose port terminals or their extension.

It also considers it necessary to carry out field checks on the information collected from economic operators in the national port sector, with attention to the merchandise exported and imported by the port terminals authorized, whose purpose is commercial operations.

In addition, to elaborate a standardized port tariff of all the services and sub-services of the sector. The SCPM also studied the delegation contracts to the rest of economic operators, such as the Port Terminal of Manta S.A., Yilport Ecuador and Andipuerto, and verified that these were subject to the corresponding legal processes and fulfilled the feasibility studies. (I)

Source: https://www.eltelegrafo.com.ec/noticias/economia/4/puertos-estado-scpm