Coal industry the loser in prolonged rail battle

A SPEEDY resolution to the drawn-out stoush between Queensland Rail and the Queensland Competition Authority over rail fees will be in the best interest of the state’s coal industry, the Queensland Resource Council claimed yesterday.
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Courtesy Queensland Rail.

Angie Tomlinson

Queensland Resource Council chief executive Michael Roche likened the ongoing battle to a “slow motion game of tennis between two government instrumentalities”

“We haven’t got a process at the moment that is delivering outcomes that seize the opportunity that is clearly there at the moment in the coal industry. We are ‘toing-and-froing’ in slow-motion tennis – we would love to see the matter resolved sooner rather than later,” he told International Longwall News.

The QCA this week rejected Queensland Rail’s request for a higher tariff in its draft access undertaking. The QCA said Queensland Rail had “not adequately addressed the Authority’s concerns” and had not provided enough information to make its case.

It further criticised the rail operator saying Queensland Rail “provided information in a piecemeal fashion” and many claims were unsubstantiated.

This week’s decision by QCA supports a 26% drop in transport costs for operators, predominantly due to significant volume increases. However, industry has raised concerns that infrastructure expansion and any cost benefits will not come soon enough.

With the rejection of Queensland Rail’s draft access undertaking, the rail operator now has 60 days to submit an amended draft access undertaking to the Authority – setting the process back further.

“We welcome the reduction in access tariffs and we welcome the consistency between the QCA’s draft decision and final decision, however what is the most disturbing is Queensland Rail and QCA appear to be as far apart as ever on the fundamentals involved in determining this,” Roche said.

He said the Queensland Resource Council supported the call for all parties to come together to start master planning the infrastructure requirements into the future “because it is going to be of no value whatsoever to have an expanded port capacity if the rail capacity is not commensurate”

Queensland Coal operators have also highlighted the importance of expanding the state’s infrastructure and laying down a blueprint for the future.

Earlier this month, Macarthur Coal chief Ken Talbot told the Mining Logistics & Supply Chain Management conference in Brisbane that Australia must ensure infrastructure was expanded to meet an additional 80 million tonnes per annum by 2010, or risk letting in new competitors including Indonesia, Mongolia, Russia and Mozambique.

"Over many years Queensland has developed a hard-earned reputation as a reliable supplier of quality coal. This reputation could be compromised if we can't demonstrate our capacity to expand infrastructure," he said.

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