Minister's rail backtrack may be too late

30 Oct, 2015 01:00 AM
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It may be too late for the State Government to prevent certification of the State's freight rail access regime expiring in February which will give CBH the option of asking the Australian Competition and Consumer Commission to intervene in its two-year dispute with Brookfield Rail.
We'll be very pleased to see CBH apply to the NCC to have the grain lines declared
It may be too late for the State Government to prevent certification of the State's freight rail access regime expiring in February which will give CBH the option of asking the Australian Competition and Consumer Commission to intervene in

TRANSPORT Minister Dean Nalder's office has backtracked on a stated intention to let lapse certification of the WA freight rail access regime under the Competition and Consumer Act.

But State and Federal regulatory sources last week indicated it is probably too late to prevent certification expiring on February 11, irrespective of what Mr Nalder or the State Government decides.

WAFarmers warned a flood of submissions will also bog down the public consultation process to ensure it cannot be finalised in time, if the government tries for an extension.

National Competition Council (NCC) guidelines stipulate applications for extension or modification of certification must be made while certification is current.

It will expire unless the appropriate Federal minister - most likely assistant to the Treasurer Alex Hawke or assistant Treasurer Kelly O'Dwyer - has signed off on an extension or modification to the WA regime certification by February 11.

The NCC confirmed on Friday an application to extend or modify certification would go through the same two-stage public consultation process a reapplication for certification would.

It took Premier Colin Barnett nine months to obtain certification - he applied on May 12, 2010 and the regime was controversially certified on February 11, 2011, by David Bradbury, parliamentary secretary to then treasurer Wayne Swan.

Mr Bradbury specified certification was for five years.

Third-party grain grower interest groups such as WAFarmers or the Wheatbelt Railway Retention Alliance were not involved in that consultation process.

During that process there were five initial rail-user submissions then four plus three supplementary submissions in the second stage.

The NCC reversed its initial support of certification of the WA regime and opposed it in the final recommendation, which Mr Bradbury overturned.

Certification as an "effective access regime" has prevented the Australian Competition and Consumer Commission (ACCC) becoming involved in the dispute between CBH Group and Brookfield Rail - the first attempt to use the WA access regime.

CBH's attempt to achieve a 10-year agreement for its grain-train fleet with freight rail network operator Brookfield marked a two-year anniversary on Friday.

The formal process was started on October 23, 2013, by CBH asking Brookfield for information on access and pricing.

Certification expiring on February 11 will open a potential new front in the dispute.

Under the national access regime which becomes an alternative, CBH, or anyone else, will be able to apply to the NCC to have all or parts of the WA freight rail network declared under the Competition and Consumer Act.

WAFarmers has said it will seek to have grain lines declared, even if CBH does not.

Declaration allows the ACCC to intervene, if requested, in freight rail access disputes and, if necessary, to order access be provided on its terms and conditions.

On Tuesday last week, Mr Nalder's office issued a statement confirming an application for recertification had not been made.

The statement explained that when certification expires on February 11 both State and national access regimes will apply to the WA freight rail network.

But on Thursday, a spokesperson from Mr Nalder's office admitted Tuesday's statement "overstepped the mark a bit".

Thursday's statement said the State Government "is assessing its options in relation to certification" and it will be "usefully informed" by the Economic Regulation Authority (ERA) review of the Railway (Access) Code 2000.

The ERA - administrator of the WA freight rail access regime - is scheduled to report on its third statutory review in December.

It has already flagged its recommendation may be to bring the Kalgoorlie-Kwinana standard gauge line operated by Brookfield under the same national competition agreement that applies to the standard-gauge line east of Kalgoorlie, operated by Australian Rail Track Corporation.

Its principal draft recommendation released for public comment last month was that the government "initiate" the 2006 Competition and Infrastructure Reform Agreement (CIRA) to which it was a signatory.

The public comment period closed Friday with the ERA to consider about six submissions for its final recommendation.

As only the certified access regime can apply under the Competition and Consumer Act, and there is no facility to rescind certification, the NCC has advised that CIRA can only apply after certification expires on February 11.

WAFarmers this week criticised the government for attempting to backtrack and prolong confusion over certification and future options for CBH in its access dispute.

"If this wasn't so serious, it would be funny," WAFarmers president Dale Park said.

"This is another example of the State Government not having a clue what they are doing.

"The information we have is that they have left it too late to apply for recertification.

"We'll be very pleased to see CBH apply to the NCC to have the grain lines declared so the ACCC can become involved.

"If CBH doesn't do it, we will.

"The NCC didn't want to grant certification last time, their recommendation was overturned.

"It would be just about impossible for the government to get it certified this time.

"If they did apply for recertification or an extension of certification, and public submissions were called for, we could make it virtually impossible for them to get it certified anyway."

Mr Park said the fact the dispute between CBH and Brookfield was two-years-old, and may run for a third year with arbitration, was "ample evidence the access regime simply doesn't work".

CBH and Brookfield Rail were asked to comment on the prospect of certification of the WA access regime expiring on February 11 but had not done so by the time Farm Weekly went to press on Monday.

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Mal Gill

Mal Gill

is wool and dairy writer for Farm Weekly

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