ACM reduces compensation for capital costs of Dutch maritime pilots
The Netherlands Authority for Consumers and Markets (ACM) cuts in half the cost of capital that maritime pilots are allowed to pass on to shipping companies. The cost of capital will be decreased from 12% to 6.5% in 2014. That is the result of the decision concerning the WACC (weighted average cost of capital) for the Dutch pilotage company Loodswezen, which ACM published earlier today. ACM will use this percentage in November when it will be setting the 2014 pilotage tariffs. If applied to the current tariffs, the new percentage would result in a reduction of 3.5% or EUR 5.5 million per year.
Sea vessels are required to take on maritime pilots to navigate them through Dutch ports. There is only one provider of maritime pilots in the Netherlands, which is the Dutch pilotage company Loodswezen. ACM therefore sets the tariffs that maritime pilots are allowed to charge in order prevent too high tariffs for shipping companies.
ACM’s starting point for determining the WACC is having an efficiently funded pilotage-services provider that achieves a reasonable return. This way, ACM stimulates Loodswezen to operate efficiently, since they do not face any competition. Most important factors influencing the level of the WACC are the risks that Loodswezen faces and the current interest rate. The primary reason behind the reduced percentage, compared to the previous decision in 2008, is that ACM also involved companies from other regulated industries such as energy and water in order to determine the risks. Another reason is the lower interest rate.