SUNBIZ

Commerce Commission Reviews Fare Submission By Shipping Operator

The Fiji Commerce Commission (FCC) is currently reviewing the cost data submitted by a local shipping operator for the Kadavu route. This after the Vanua Valesasa Transport Company Limited (VTCL)
08 Feb 2017 11:00
Commerce Commission  Reviews Fare Submission By Shipping Operator

The Fiji Commerce Commission (FCC) is currently reviewing the cost data submitted by a local shipping operator for the Kadavu route.

This after the Vanua Valesasa Transport Company Limited (VTCL) raised concerns over the formula used to calculate fares and freight charges for maritime islands.

The company had publicly stated their grievances over the uniform charges for freights and fares.

FCC chief executive officer, Joel Abraham, said the commission regulates the fare charged in the maritime regions in Fiji.

Mr Abraham said, in determining the fare and fees to be charged, the Commission requested shipping companies to submit their cost information to allow the Commission to verify such costs.

“The Commission has received submission from Valesasa (VVTCL) regarding its information and the Commission is currently reviewing the submitted information along with other submission from the shipping industry,” Mr Abraham said.

The commission he said, was aware of the issue raised by Valesasa and would be able to ascertain the validity of the claims, after reviewing the cost data that was submitted.

VTCL company managing director, Ilaitia Caginavanua, said Kadavu was the only place in the maritime group which had two sets of fares; $43 for the western side of the island and $34 for the eastern side.

“The whole province of Lomaiviti has only one fare of $67,” Mr Caginavanua said.

He explained that from Suva to Lomaiviti, a shorter distance covered had a fare of $67, whereas from Suva to Kadavu which had a longer distance has two fares.

“We had been operating for more than three years in Kadavu with $65 as the basic fare, prior to the Commerce Commission’s imposition of the much reduced fare of $43 and $34 sometime in the middle of 2015,” Mr Caginavanua said.

He said, by statistics, as provided in copies of a letter written and map sent to the FCC, in terms of the distance, fuel used and time taken for sailing, the fare to Kadavu should be $67.

“We have been asking the Commerce Commission as to what formula did they used to calculate the fares to Kadavu, if they could provide the statistics,” said Mr Caginavanua.

In addition, he also mentioned that, prior to running their business, they were assisted by the bank with a loan to purchase the vessel, MV Uluinabukelevu.

“The bank had requested us to provide a business plan and the plan we had produced used the $65 standard fare to Kadavu at the time, for working out our income for the business,”Mr Caginavanua said.

The bank he said had approved their loan based on the $65 fare to Kadavu.  But now that their income to Kadavu has been greatly reduced, Mr Caginavanua said, they faced problems with paying off their bank loan.

“Our vessel is owned by the tikina of Nabukelevu,it is where our vessel serves the most and members of the tikina were happy with the $65 fares, because they are also keen to have the loan paid off,”Mr Caginavanua ended.

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