ACCC gives Newcastle arrangements another three months

THE Australian Competition & Consumer Commission has welcomed recent collaboration between the New South Wales government and industry and extended the shelf life of the capacity balancing system (CBS) used at the Port of Newcastle until March 31, 2009.

Blair Price

In granting interim authorisation to both the Newcastle Coal Infrastructure Group and Port Waratah Coal Services, the ACCC said it was still concerned the CBS will have the potential to result in insufficient coal chain investment and substantial losses in export revenues.

“While the ACCC continues to be concerned about detriments that arise from ongoing queue management systems it recognises the significant progress that has been made, particularly through the NSW government's announcement on 12 December 2008 of a terminal access framework that is supported by all Hunter Valley coal producers," ACCC chairman Graeme Samuel said.

“The ACCC considers that to be effective, any long-term solution must extend beyond terminal capacity allocation to ensure all coal chain contracts, including track and rolling stock, are properly aligned and reflect whole of coal chain capacity, rather than just stand-alone capacity of individual components.

“To this end, the ACCC strongly encourages all the relevant parties, including producers, rolling stock and track providers, terminal operators and government, to continue to work together to finalise the details of a long-term solution as soon as possible."

Samuel said the ACCC required monthly reports from the applicants in the framework plan and warned that interim authorisation could be revoked if there was insufficient progress towards a long-term solution.

Under last week’s terminal access framework proposal, PWCS will have the opportunity to lease additional government land and build a fourth coal loading terminal on Kooragang Island.

To help foster infrastructure investment along the Hunter Valley coal chain, producers will be given the ability to commit to long-term terminal contracts.

Among other measures, a pro-rata levy is proposed on all coal exports to cover the cost of any terminal expansion shortfalls, where contracts do not align exactly with construction needs.

The current authorisation period was set to expire on New Year’s Eve.