May 06, 2019

Breakthrough agreements on coal rail network

Breakthrough agreements on coal rail network

Aurizon Holdings has reached agreements with its customers on a proposed revised Access Undertaking for the Central Queensland Coal Network (CQCN).

The rail operator said the breakthrough agreements, which follow months of negotiation, would provide greater commercial and operational certainty for all users of the CQCN.

Customers signed to the agreements represent more than 90 per cent of railed tonnes in the Central Queensland Coal Network and include Anglo American, BHP, Coronado, Glencore, Idemitsu, Jellinbah, Kestrel, Middlemount, Peabody, QCoal and Yancoal.

The new undertaking remains subject to the review and approval of the Queensland Competition Authority.

Queensland Coal Rail Working Group chair Rag Udd from BHP said coal industry welcomed the renegotiation of the access undertaking.

“Consistent with our statements last year that the coal industry was willing to engage with Aurizon to address its concerns provided it ceased its disruptive maintenance practices, the coal industry has now agreed to provide Aurizon Network with an uplift in its return on capital from 5.7 per cent to 6.3 per cent in exchange for a package of beneficial reforms to the access arrangements for the Central Queensland Coal Network,” he said.

“The new access regime provides the coal industry with greater certainty of access to the rail capacity it requires to sustain its export operations.

“It places a greater commitment on Aurizon Network to deliver the capacity that it has sold and to work with Industry to develop productivity and efficiency improvements, including a more reliable and transparent maintenance regime and investments to address shortfalls in the system capacity.

“It also requires Aurizon Network to remain regulated under the Queensland Competition Authority regime for the next 20 years.”

Aurizon managing director and chief executive officer Andrew Harding said at the encouragement of the QCA, Aurizon had been working constructively with customers to address respective concerns regarding the Access Undertaking.

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