ACCC rejects proposed rail network access undertaking

ACCC reject interstate rail network access undertaking ARTC

In a draft decision, the ACCC will not accept a 2018 interstate rail network access undertaking proposed by the Australian Rail Track Corporation (ARTC).

ACCC Commissioner, Cristina Cifuentes, said, “The ACCC considers that the proposed access undertaking is not acceptable on a number of fronts.

“In making our draft decision we have had regard to a number of fundamental issues being proposed by ARTC and the lack of information available to the ACCC and the above-rail operators to assess the impact of these.”

An access undertaking allows access providers to obtain a degree of certainty about the terms and conditions on which access will be made available to their infrastructure, and allows rail operators that are considering establishing new infrastructure to settle access matters before they invest.

The ARTC submitted the 2018 interstate access undertaking to the ACCC for assessment in March 2018. This access undertaking is for the provision of access to the interstate rail network operated by the corporation.

The interstate rail network consists of the standard gauge track between Kalgoorlie in Western Australia to Acacia Ridge in Queensland, and transports bulk freight, non-bulk freight and passengers. ATRC currently operates rail tracks in Queensland, New South Wales, South Australia, Victoria and Western Australia.

ARTC is seeking more flexibility by shifting from indicative tariffs approved by the ACCC to a proposed range within which ARTC and above-rail operators can negotiate access charges.

However, the ACCC cited significant concerns with ARTC’s proposed value of the regulated asset base, the rate of return and the ceiling limit, which determine the bounds of the access charges that ARTC can levy.

The assessment cited additional issues with ARTC’s proposal, including the potential for gaps in access regulation, between the proposed expiry of the 2018 interstate access undertaking in 2023, and the intended commencement date of Inland Rail and any replacement undertaking in 2025.

“In our draft decision, we have provided detailed feedback that ARTC can use to revise the 2018 interstate access undertaking.

“We have also requested substantial further information from ARTC and feedback on the proposal from stakeholders so we can assess any revised access undertaking proposal,” Ms Cifuentes said.

The ACCC previously accepted an access undertaking in relation to the interstate rail network on 30 July 2008. ARTC has sought to extend the 2008 interstate access undertaking twice, which the ACCC has consented to. The 2008 interstate access undertaking is due to expire on 28 February 2019.

The ACCC is seeking submissions in relation to this draft decision, which are due by 18 February 2019.

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