The Australian Competition and Consumer Commission has issued a draft decision not to accept the proposed access arrangements lodged by the Australian Rail Track Corporation for the Hunter Valley rail network in their current form, on the basis that they are unlikely to be appropriate under the Trade Practices Act 1974.
The Hunter Valley rail network is managed by ARTC and is a key component of the overall supply chain, delivering coal from mines in the Hunter Valley to the Port of Newcastle for export. The rail network also carries passenger trains and non-coal freight trains.
Late last year, the ACCC authorised capacity management arrangements for the export coal terminals at the port as part of the ‘long term solution’, and has recently been assessing access arrangements for ARTC’s Hunter Valley rail network. The ACCC wants to ensure that the Hunter Valley rail network contributes to the long term solution for the Hunter Valley coal supply chain.
In its draft decision the ACCC emphasises the need for the rail access arrangements to align with other components of the supply chain, and thereby contribute to an efficient and effective supply chain overall.
The ACCC has also recognised a need to balance the broader public interest objectives with the legitimate business interests of ARTC and the interests of all access seekers, including passenger trains, coal and non-coal freight.
In relation to the price of access, the ACCC’s draft decision reflects the principle of the Act that prices should allow for an appropriate return for ARTC that reflects risk, so as to encourage efficient investment in, and use of, essential infrastructure.
In the draft decision the ACCC has provided detailed feedback to ARTC to assist it to revise its arrangements to a form that could be accepted. The ACCC also noted that ARTC and industry have been working in the interim on solutions to some of the outstanding issues, which may assist to address some of the matters raised by the ACCC.
The ACCC acknowledges the complexity of the task and the hard work undertaken by the parties to date. It strongly encourages industry to continue to work cooperatively to devise an appropriate and effective outcome.
The ACCC is publicly consulting on its draft decision. Submissions must be received by 31 March 2010. The ACCC may place less weight on submissions received after this time.