Timing right for rail access reform: CBH

10 Feb, 2016 01:00 AM
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TIMING could be right for national freight rail access reform, CBH Group has suggested.

While supporting recommendations for major changes to the WA rail access regime, CBH has suggested that rather than continue with State and national regimes, one regime across the country could be a better alternative.

An Australian Rail Track Corporation Ltd (ARTC) style national access regime "would bring consistency and transparency to rail access arrangements across Australia and inland transport pathways to export", CBH claimed on Monday.

ARTC operates standard-gauge lines east of Kalgoorlie linking with Eastern States' capital cities and major ports, as well as the Hunter Valley coal network in New South Wales, under the national access regime.

A commercial agreement between Brookfield Rail and ARTC allows interstate trains to run on the standard-gauge line west of Kalgoorlie.

East of Kalgoorlie an ARTC undertaking approved by the Australian Competition and Consumer Commission (ACCC) protects rail access seekers from monopolistic activity in relation to pricing and terms of access.

The ARTC undertaking also outlines a range of standard reference tariffs for standard freight rail services enabling access negotiations to be concluded quickly, unlike the 27 months it has taken CBH so far to try to reach agreement with Brookfield.

That undertaking is due to be reviewed in 2018.

In response to the latest review of the WA rail access code, CBH said the most significant aspect of change recommended by the Economic Regulation Authority (ERA) related to an ARTC-style undertaking.

"Perhaps the most significant aspect of change is the recognition that the standard gauge (line) should be regulated in a similar fashion to the ARTC access undertaking," CBH said.

"CBH wholly supports this concept but it does have concerns regarding dual regulatory systems in place for one network.

"It's CBH's view that it would be beneficial for the narrow gauge to be treated similarly to the standard gauge and operate under an ARTC style access undertaking, with due recognition of its asset base and condition.

"Alternatively, rather than treating the WA rail access regime in isolation, under bespoke regulatory arrangements, given that the ARTC undertaking is due for review in 2018, CBH considers the timing is right for national rail access reform."

CBH said it supported the 10 recommendations made by the ERA to amend the Railways (Access) Code 2000, especially "additional elements" included after public consultation on a draft report in September 2014.

"In particular, CBH is pleased with the recommendation to set an 'established asset base' value in relation to routes under the code which should provide better guidance as to the likely costs of access by taking into account the initial lease cost, capital improvements and its current condition.

"CBH also sees benefit in the recommendation that parties should be able to agree (on) arbitrators and if not agreed, then they can be appointed from an expanded pool of arbitrators."

The ERA recommendations were given to Treasurer Mike Nahan in December but only released publicly last week.

Its major recommendation was "the State Government should consider options to bring interstate services offered by Brookfield Rail on the interstate route under regulations consistent with the ARTC undertaking".

But the ERA also pointed out in its review report that any ATRC-style undertakings to the ACCC by Brookfield, in relation to the standard-gauge line and any other lines, would be voluntary.

The WA freight rail situation was also expected to become more complex from today with expiry of certification of the State access regime.

As previously reported, expiry of certification as an "effective access regime" means both the State regime and the national regime can apply in WA.

Rail users like CBH or interested third parties like WAFarmers can from today apply to the National Competition Council to have some or all WA freight lines declared, subject to a cost-benefit analysis.

Once lines are declared the ACCC can become involved in access disputes.

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Mal Gill

Mal Gill

is wool and dairy writer for Farm Weekly
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READER COMMENTS

Deregul8
10/02/2016 7:07:16 AM, on Farm Weekly

Translation - we bought all these trains without first asking if we were going to be able to use them to make them pay for interest alone, let alone the capital cost.

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