The Minister for Planning, Bill Wood, rejected yesterday a call to re-open tenders for three new trunk-route service stations. The call came from the Canberra Property Owners Association who asserted in a letter to Mr Wood with copies to other Assembly members that the tender process was flawed and that a recent Trade Practices action required that the tenders be reopened.
Association secretary Styliani Contis said two of the tender requirements were inconsistent. One required the applicant to be “independent”. On the other hand, another required continuity of supply. The only way to secure continuity of supply was to make an arrangement with one of only five suppliers or fuel in Australia, which would inevitably contrary to the independence requirement.
The applicant was also required to act competitively and remain competitive. But the central control by the major oil companies made these requirements impossible to monitor.
“”There is increasing evidence that oil companies manipulate both the wholesale and retail price of petrol,” he wrote, citing the recent statement of claim made by the Trade Practices Commission in an anti-competition case in the Federal Court. (The oil companies are defending the claim and have denied its content.)
Mr Contis wrote that his association had concluded that only a special category of person or corporation could qualify to tender.
It was asserted in the Assembly recently that the terms of the tender had been crafted so as to make Burmah Oil the only company capable of qualifying and this would satisfy a promise that the Minister for Consumer Affairs, Terry Connolly, had made that Burmah would get other sites in addition to the site it got on favourable terms a year ago on Wentworth Avenue.
Mr Connolly brought Burmah Oil into Canberra a year ago with the offer of a site in Kingston at substantially under the previous going rate for service station sites in a campaign to lower petrol prices.
By the deadline for the tender of the new sites last month, only Burmah had tendered, but another four had been received after the deadline, though posted before it.
Mr Connolly’s office has said the tenders are a planning matter.
Mr Wood said he would not agree to the association’s requests.
“”The tenders are now in and are being assessed,” he said. “”A decision will be made before the cut-off date in early January.”
The Government goes into caretaker mode in mid-January before the election on February 18.
The association said the Trade Practices Commission’s statement of claim had asserted that the oil companies had relied on their commission agents in collusion with independents to hold up the price in Canberra and elsewhere.
In light of this it asked Mr Wood to give an assurance that applicants getting a lease did not have any supply arrangements with oil companies that could be anti-competitive.
It has been asserted in the Assembly and in Assembly committee hearings that Burmah had a supply arrangement with Shell, which was named in the Trade Practices statement of claim and that Burmah was not a genuine independent but a large multi-national.
The Motor Trades Association of Australia has said the reason Burmah could lower petrol prices was because of its generous lease, which Canberrans paid for in other ways; a general drop in crude prices and because price cuts were restricted to the casual market as prices were fleets were already discounted. The Motor Trades association has said that it suits Shell to have a friendly “”independent” in Canberra rather than genuine ones.
Mr Connolly has defended his policy saying it has delivered cheaper prices to Canberrans and that there would be genuine competition among a number of independents.