SUNBIZ

Goundar Denies Monopoly Claims

Goundar Shipping Limited (GSL) is disappointed with the Fiji Commerce Commission (FCC) over claims that the company would monopolise the shipping industry in Fiji. The FCC had sent a letter
22 Feb 2017 11:28
Goundar Denies Monopoly Claims

Goundar Shipping Limited (GSL) is disappointed with the Fiji Commerce Commission (FCC) over claims that the company would monopolise the shipping industry in Fiji.

The FCC had sent a letter to the Government about its claims.

According to GSL managing director, George Goundar, letter was sent to Government after GSL asked FCC to release the non-subsidy rates as GSL make trips to some of the islands under the uneconomical routes without the shipping franchise.

FCC deputy chief executive officer, Seymour Singh, said in considering the request of the Ministry of Infrastructure and Transport (MOIT) in 2014 review, they had worked out fares based on subsidised rates due to the following reasons;

“The routes are under the Government Franchise Scheme (GFS). If the Commission authorises GSL to charge full fares, then GSL may start taking a couple of extra trips as the non-franchise trips. Overtime, the franchise scheme many be eliminated and GSL may increase the non-franchise trips, cause customers frustration for the franchise trips through using delaying tactics and prioritise non-franchise trips.”

Therefore, Mr Singh, said GSL may start defeating Governments objective to make travelling affordable.

He said, GSL being a bigger player, they may price out the smaller players and create a monopoly situation and then abuse its market position.

“Through this behaviour, GSL will destroy the Government’s franchise scheme and make the vulnerable pay a fare that would be exorbitantly high,” said Mr Singh.

Mr Singh also stated that GSL would overcharge the passengers for the franchise trips.

“GSL may not disclose to them the subsidy amount and start profiteering from the subsidy,” he said.

“GSL’s act seems to be an attempt to distort the pricing structure and the Government’s franchise routes.”

Moreover, he said, if the commission did release the non-subsidised fares, such may come at a cost to people in remote islands who  would suffer in the hands of GSL with excessive fares which most may not be able to afford, however, may become a necessity if they have to genuinely travel.

The commission further noted that since the Ministry of Infrastructure and Transport manages the franchise scheme, consumers would still have the option to travel via the franchise (paying lower rates) or non-franchise trips (higher rates).

He said the non-subsidised fares could only be released by the commission subject to the approval from the ministry.

In this regard, the consumers needed to be made fully aware of the schedules that run-on franchise to ensure that the fares and freight rates are made affordable to the Fijians who are out there in the remote islands.

Mr Goundar questioned the reasons stated by the commission in the letter. He said all he and his company wanted to do was to uplift the standard of service in the current shipping industry.

“I’m bringing a lot of vessels to Fiji, and I need to be treated equally with other shipping companies,” he said.

“I just don’t know what FCC is talking about,” Mr Goundar questioned.


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