Methodology to be used for calculating the cost of capital rate of CTT applicable to financial year 2018 and subsequent financial years - consultation

On 6 July 2017, ANACOM approved the draft decision on the methodology to be used to calculate the cost of capital rate of CTT - Correios de Portugal (CTT), applicable to financial year 2018 and subsequent financial years.

As universal postal service provider, CTT is required to maintain an SCA - Sistema de Contabilidade Analítica (Analytical Accounting System) which provides for a separation of accounts between each of the services and products that make up the universal service and those which do not; In particular, this system shall enable calculation of the net cost of universal service and allow separation of costs associated with the various basic operations making up the postal services (collection, handling, transportation and distribution)1, based on consistently applied and objectively justifiable principles of analytical accounting.

It is ANACOM’s responsibility2 to approve the SCA submitted by the universal service provider and to ensure that its correct application is overseen by a competent authority independent of the universal service provider. ANACOM is also required to publish a statement, on an annual basis, of compliance as regards the universal service provider's SCA and as regards the results obtained.

The cost of capital rate is intended to represent the rate of return deemed appropriate to offset the opportunity cost of investment. In the context of postal regulation, determination of the cost of capital rate seeks to ensure a correct level of incentives for investment by the provider of the universal postal service, to ensure that there are no market distortions resulting from discriminatory and anti-competitive practices, to eliminate possible barriers to entry to new competitors and to protect consumers from excessive pricing.

It is therefore considered essential to define a methodology which enables calculation of the cost-of-capital rate without accounting and analytical constraints, in order to remunerate the investments made by the regulated postal undertakings within the framework of universal service provision.

It was decided to submit this draft decision to the prior hearing of interested parties, pursuant to articles 121 et seq. of Código do Procedimento Administrativo (Administrative Proceeding Code), as well as to the general consultation procedure, pursuant to article 9 of Lei Postal (Postal Law In both cases, stakeholders were given a period of 20 working days to respond (comments in writing and in Portuguese).

Comments should therefore be sent no later than 7 August 2017, by email to capitalctt@anacom.pt3. Once the consultation process has been concluded, the contributions received will be made public. Therefore, for the purposes of publication on this website, interested parties should also submit a non-confidential version of their responses excluding any items considered confidential.

1 Article 15 of Law no. 17/2012 of 26 April (current version), and paragraph 1 of Base XIII of Decree-Law no. 448/99 of 4 November (current version).
2 Paragraph 4 of article 16 of Law no. 17/2012 of 26 April (current version).
3 Each email may contain one or more files as long as the total size of all files does not exceed 10 megabytes and, if necessary, comments may be divided into two or more emails.