EASTERN Wheatbelt growers could be entitled to $18 million from the State Government for its failure to comply with an agreement regarding the payment of grain transfers in Merredin and the Avon region.
The lease agreement largely known as the 'Merredin Transfer Fee' was signed by the WA Government Railways Commission (WAGRC) and CBH included the WAGRC to pay the co-operative all costs for additional grain handling by CBH at Merredin and Avon.
"It is agreed that the Commission (WAGRC) will deliver, in standard gauge wagons only, to the port terminal now situated at North Fremantle all grain received by the Company in the Fremantle Zone," the agreement stated.
"To enable this delivery in standard gauge wagons the Company (CBH) shall provide, maintain and operate facilities at Merredin and Avon that will enable the transfer of grain from 3ft 6in gauge wagons to standard gauge wagons and the Commission shall recoup the Company in full the capital plus interest, maintenance and working costs directly arising from this additional handling of grain by the company at these two locations."
The agreement was signed in 1969 and was backdated to November 1, 1966.
The agreement was for 50 years (1966-2016).
The agreement continued on to say "If desired by either the Commission or the Company it is understood and agreed that on expiration of the above period the agreement of 50 years the agreement will be renewed for a similar period."(2016 - 2066)
But where details of the agreement begin to get cloudy is from 2000, when the State Government sold WAGRC, later known as Westrail, to a consortium of Wesfarmers and global rail freight company GWA.
It is then understood the liabilities of the agreement were transferred or assumed by either the Australian Western Railroad Pty Ltd which purchased the rail freight business or Westnet Rail Pty Ltd which managed the below-ground rail business and rail infrastructure lessee via transfer orders.
The transfer orders were published in the Government Gazette on December 5 and 12, 2000 and are relevant to the sale of the rail freight business.
It then becomes unclear as to whether any liability to the State Government was included in the sale as it included freight, terminals and customer contracts.
In 2006, Wesfarmers and GWA sold the below-ground rail to Babcock and Brown Infrastructure.
Babcock and Brown then went into liquidation in 2009 and sold the below-ground operations to Prime Infrastructure.
Prime Infrastructure then merged with Brookfield Rail in 2010, resulting in Brookfield Rail taking on the lease.
The above ground rail was sold to Queensland Rail (ARG).
In 2008, ARG asked CBH to provide a set dollar per tonne for the grain tonnage transfers which the co-operative set at $3.50 per tonne.
Then in 2009-10, ARG moved to a site-based freight charge where rail distance equalled rail cost.
CBH/WATCO is now the above ground operator.
Despite the constant changes in the lease since 2000, the onus could still largely be on the State Government because the rail infrastructure is State-owned.
The issue of the fee has come to the fore with the recent issues involving Tier 3 rail lines.
Transport Minister Troy Buswell said the terms and conditions of the Merredin Transfer Fee was an arrangement with the above-ground rail operator.
He said Government has not been the above-ground operator since 2000.
The transfer fee was discussed at a recent CBH board meeting and it was understood that CBH was assessing its options regarding how to recover the fee.
But a CBH spokesperson said this week that the Merredin Transfer Fee was a legacy issue from many decades ago and not one that the CBH Group has plans to revisit in the immediate future.
"The focus for us currently is to negotiate a fair and meaningful access agreement to the entire grain rail network for the long term, to ensure we can continue to move grain to port in the most efficient way on behalf of our growers," the spokesperson said.
But the matter may still not end there with a number of industry sources involved telling Farm Weekly it appeared the fee was lost within the agreements and that grain growers from the Merredin area have been paying the fee, when the State Government should have been.
Staff from Member for Agricultural Region Darren West's office have been researching the fee for several months but were unable to access lease agreements following the year 2000.
Mr West said the money should be paid back to the growers by the State Government.
"If the money is owed to the growers it would be most welcome to be repaid to the growers because as we all know there has been a tough series of years," Mr West said.
"It is another example of the Liberal-Nationals' abysmal performance when it comes to transport infrastructure in the agricultural region."
Mr West said he could not understand how the fee had been 'lost' and it was up to State Government to find where it was.
"(The State Government owes the money) that is the only conclusion we could come to," he said.
"If there was an agreement that has been there for years for different gauged rail and was honoured up until 2000, what was the trigger for not honouring that commitment?
"There was no announcement, there was no press statement or anything said in the parliament that anything has changed, so if it hasn't changed why aren't they getting paid?"