Brookfield sticks to guns at inquiry

When asked whether CBH had started signing agreements with trucking companies due to the June 30 Tier 3 closures, he played down the urgency and said some Tier 3 tonnes would be trucked but some rail was needed during harvest to get tonnes to port.

He also said there was too much revenue involved for Brookfield not to give CBH harvest access, even at current access rates.

Mr Mencshelyi said depending on the size of the 2014/15 crop there simply wasn't enough road resources to move the next harvest.

He said it was unlikely CBH would have no access to Tier 3s going into the next year but what condition the track was in and how much CBH would have to pay Brookfield for its use would be a different story.

Last Wednesday the Economics and Industry Standing Committee continued with its inquiry into the management of WA's freight rail network by taking evidence from CBH and Brookfield Rail.

What became evident was the fact Brookfield Rail believed it had a contractual right to do whatever it saw fit with Tier 3 lines in the Wheatbelt and the release of its contractual obligations wasn't something the company wished to do despite industry's endless calls for it to be made public.

In giving evidence, it was also clear Brookfield gauged its performance record by the overall increase of tonnes it had moved on standard gauge lines in the last 12 months, rather than looking at lines on an individual or case-by-case basis.

In his evidence, Brookfield chief executive officer Paul Larsen claimed it wasn't Brookfield's decision to close the Tier 3 lines, instead he said the company was simply implementing the lease terms decided upon by the State Government.

He said Brookfield was available for negotiations with regard to access but not the leasing or subleasing of its lines.

Throughout the inquiry Mr Larson was asked whether or not he thought shutting down Tier 3 rail but not handing them back to the State Government constituted monopolistic behaviour.

He was asked whether it was a case of "taking his toys and going home", especially given the fact CBH had made two separate proposals to take over the Tier 3 lines and maintain them via a sublease agreement.

Mr Larsen replied that those conversations were confidential between the parties and Brookfield wasn't denying CBH access.

He said negotiations that were satisfactory for both parties hadn't occurred for an access agreement to be concluded and Brookfield had paid Government for the right to do whatever it saw fit.

Mr Larsen was also asked how he could deliver on the part of Brookfield's 2049 contract which said the business would return the lines in the same condition as they were when handed over.

Apparently parts of the contract were amended.

CBH chief executive officer Dr Andy Crane told the committee the co-operative had an overarching need for a well-functioning supply chain to market for the State's 4200 grain growers to have access to South East Asian markets which weren't theirs by right.

He said CBH's investment in trains was only one part of its long-term success and it needed the rest of the State's rail assets to function effectively.

Dr Crane told the committee CBH and industry had run record tonnages over the State's rail lines in recent years and it was unacceptable to have the rug ripped out from underneath them.

He said something was terribly wrong and the combination of axle weight limits and speed restrictions meant the current functioning of the grain rail task wasn't sustainable and certainly wasn't in the best interest of the grain industry or the State.

"We see it as unacceptable that the operator of this asset is allowed to let it deteriorate to the point where it closes," Dr Crane said.

WAFarmers president Dale Park also provided evidence to the inquiry late last week.

"It's ridiculous WA growers are paying twice as much some people even say four times as much for access to grain rail assets than anybody else in the world," Mr Park said.

"Despite that, CBH are giving growers amazing cartage rates.

"Narambeen has gone down from $35 a tonne to $23/t despite the fact more than half the money CBH attracts goes straight into Brookfield's pocket.

"Normally competition fixes these types of problems CBH are paying for a service but it doesn't know what it's getting for its money.

"And still, nobody is allowed to compete against Brookfield."

Mr Park said it was public knowledge that CBH was willing to take on some of the rail assets however no competition and no transparency had left everything in a mess.

"Unfortunately we don't have either in this case and now nobody knows what's going on," he said.

"Part of the reason CBH bought its rolling stock was so that it could control what growers were paying on top of the tracks.

"Growers should have information so that they know who the bad boys are in all of this."