High Court backs Glencore on Newcastle port fees

 
  james.au Minister for Railways

Location: Sydney, NSW
http://www.afr.com/business/infrastructure/rail/high-court-backs-glencore-on-newcastle-port-fees-20180325-h0xxdq

Interesting regulatory/pricing artilcle with two parts.

1. Port of Newcastle cannot set port usage fees with reference to the cost that its owners paid for it - ACCC to arbitrate new port access fees (which impacts upstream mines that use rail to get to port).

2. Aurizon and customers in a stoush about maintenance levels on the CQCN.  @Sulla1, perhaps you can shed light on this, i dont think i know enough to interpret the article with justice.

Sponsored advertisement

  Sulla1 Chief Commissioner

The Aurizon situation is fairly complex, but the crux of the story is that like most privately owned vertically integrated operators, Aurizon has been carrying out corridor maintenance during periods of low mining activities or mine shutdowns. However the Queensland Competition Authority has instructed Aurizon it must carry out a set/minimum number of corridor maintenance shutdowns per annum regardless of traffic demand to satisfy open access requirements. As a result, in his typical "regulators be damned" response, Aurizon's Andrew Harding announced he will follow the regulator's demands to the letter, meaning the Aurizon network will lose 20-million tonnes in capacity and up to a billion dollars in revenue to shutdown when the regulators say rather than when the customers want to. The customers aren't happy, other operators aren't happy, Aurizon's imvestors aren't happy and for some reason the Queensland Competition Authority isn't happy about having its judgement questioned. No doubt issues go deeper.
  apw5910 Deputy Commissioner

Location: Location: Location.
The Aurizon situation is fairly complex, but the crux of the story is that like most privately owned vertically integrated operators, Aurizon has been carrying out corridor maintenance during periods of low mining activities or mine shutdowns. However the Queensland Competition Authority has instructed Aurizon it must carry out a set/minimum number of corridor maintenance shutdowns per annum regardless of traffic demand to satisfy open access requirements. As a result, in his typical "regulators be damned" response, Aurizon's Andrew Harding announced he will follow the regulator's demands to the letter, meaning the Aurizon network will lose 20-million tonnes in capacity and up to a billion dollars in revenue to shutdown when the regulators say rather than when the customers want to. The customers aren't happy, other operators aren't happy, Aurizon's imvestors aren't happy and for some reason the Queensland Competition Authority isn't happy about having its judgement questioned. No doubt issues go deeper.
Sulla1
But the regulator will be happy, and that's the main thing. After all, actually running trains is such a bloody nuisance.
  james.au Minister for Railways

Location: Sydney, NSW
Thanks @Sulla1. Great info. I don't understand though the legal case being raised by the customers. Are the customer service contracts in conflict with the regulations then?
  Sulla1 Chief Commissioner

That is quite possibly the case, but I'm not across all the details or developments at the moment.
  gordon_s1942 Chief Commissioner

Location: Central Tablelands of NSW
I can understand the demand for a minimum amount of maintenance is being required by the Regulators to avoid 'putting it off until tomorrow and tomorrow never comes' attitude.
By the same token, there has to be some flexibility in these arrangement to allow for things that we can never plan for but must be prepared to attend to when they happen.
Its easy to read into the report that AURIZON'S Andrew Harding has done a 'Dummy Spit' and will adhere to the direction come Hell and High Water and if it causes any problems, Dont call him'.
For a CEO or whatever he is, that's about the most pathetic reaction you would expect and if I was a shareholder or whatever, I would certainly let him (Andrew Harding) and the Aurizon Board know my feeling on the matter.
CEO's come 10 cents a dozen and there would be a replacement ready, willing and able to take over the Job.
  james.au Minister for Railways

Location: Sydney, NSW
It sounds like me the company is between the regulator and the consumer - and the consumers are going to be used as political tools to whack the regulator...
  neillfarmer Chief Train Controller

I can understand the demand for a minimum amount of maintenance is being required by the Regulators to avoid 'putting it off until tomorrow and tomorrow never comes' attitude.
By the same token, there has to be some flexibility in these arrangement to allow for things that we can never plan for but must be prepared to attend to when they happen.
Its easy to read into the report that AURIZON'S Andrew Harding has done a 'Dummy Spit' and will adhere to the direction come Hell and High Water and if it causes any problems, Dont call him'.
For a CEO or whatever he is, that's about the most pathetic reaction you would expect and if I was a shareholder or whatever, I would certainly let him (Andrew Harding) and the Aurizon Board know my feeling on the matter.
CEO's come 10 cents a dozen and there would be a replacement ready, willing and able to take over the Job.
gordon_s1942
And they would be faced with the same problem. Aurizon has received an instruction from the all powerful QCC to do track and overhead works a certain way. That way is not the most efficient but it satisfies the QCC's idea of 'open access'.
All Harding has done is to return the ball.
Neill Farmer

Sponsored advertisement

Subscribers: james.au

Display from:   

Quick Reply

We've disabled Quick Reply for this thread as it was last updated more than six months ago.