The weighted average cost of capital (WACC) is central to French
airport price-cap regulation. However, French regulation remains
silent on the key parameters and methodologies used to determine
the WACC, resulting in differing appreciations of the correct cost
of capital which should be used to determine the evolution of
airport charges. In the context of the privatization of French
regional airports, this regulatory uncertainty is problematic as
the state acts both as a regulator and as a shareholder, thereby
undermining the confidence of airlines in the current regulatory
framework. Furthermore, the lack of predictability of the price
setting mechanism burdens potential buyers of French airports with
a strong regulatory risk regarding the next price control
In this NERA paper, Associate Director Jeanne Lubek and Economic
Analyst Stéphane Wakeford note that incremental changes to
the current regulation towards more economic standards would
benefit both airport users and operators. In addition, these
changes would prevent the French price-cap regulation from becoming
akin to a disguised rate-of-return regulation, of which the
perverse effects have been widely documented (most notably, the
Averch-Johnson effect regarding the tendency of rate-of-return
regulation to result in overinvestment).
A much-anticipated judgment of the Court of Appeal has been handed down this morning that addresses the important issue of whether a charterer's failure to pay hire amounts to a breach of a condition...
A recent decision provides authority for the broadly accepted understanding that a "unit", for the purposes of limitation under Article IV Rule 5 of the Hague Rules, cannot apply to a bulk cargo – it can only mean a physical unit for shipment and not a unit of measurement or a customary freight unit (the unit of measurement used to calculate freight).
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It is common practice for traders, usually when they are the sellers of the goods and the charterers of a vessel, to instruct the carrier to discharge cargoes without production of the original bills of lading and to agree to indemnify the carrier against the consequences of doing so.
We have received reports that the " STAR ZETA ", a 2003 built bulk carrier flying the Marshall Islands flag, has grounded in the river Parana and is blocking the channel.
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