20 Jun 2009

New moves on price rules for airports, lines companies

1:27 pm on 20 June 2009

The Commerce Commission has taken a step forward in ensuring fair prices are charged by airports, and by companies operating electric cables and gas pipelines.

The companies are known as natural monopolies, and as such are not subject to the discipline of the market and have been accused of charging high prices as a result.

For this reason, price controls were imposed on many of these companies several years ago, which the businesses said were so onerous, they discouraged investment.

The Commerce Commission has produced new proposals on how to devise regulations covering such companies, and is considering issues such as the cost of capital, the valuation of assets and the treatment of taxation.