Asciano upset with rail contract

Asciano Group has accused Queensland Rail of lowering track charges in order to win a major coal transport contract in the Hunter Valley.

Asciano Group has accused Queensland Rail of offering cheaper track charges to Felix Resources in order to win an 11 year coal transport contract in the Hunter Valley.

In a submission to the Queensland Competition Authority (QCA) Asciano general manager of access and regulation Tim Kuypers calls Queensland Rail’s tariff cut “highly unusual.”

According to Asciano, Queensland Rail lowering its tariff from $5.67 to $4.60, and backdating the new rate to July 2007, was what won it the contract, which was announced on Monday.

Asciano’s Pacific National was competing for the $110 million contract, which will see Queensland Rail deliver up to 12 million tonnes of coal per year and will take its market share in the Hunter Valley to around 30%

A Queensland Rail spokesperson told MINING DAILY that the company has acted fairly in winning the contract.

“All commercial arrangements with Felix Resources have been entirely appropriate and independently negotiated by Queensland Rail Network and the Queensland Rail Coal businesses,” the spokesperson said.

“It would appear that our competitor is simply becoming increasingly concerned about their inability to compete with Queensland Rail in the national market on commercial terms.”

In the submission to the QCA Kuypers writes that Felix informed Asciano a key decision in awarding Queensland Rail the contract was the carrier altering its charges for above and below operations in the Queensland region of Minerva.

According to Asciano, this means Queensland Rail may not have been operating as a stand alone business and may have created a “cross subsidy” by incorporating its above and below rail operations and taking a “non commercial position” to win the contract.

Queensland Rail maintains it has no cause for concern from Asciano’s submission to the QCA.

“There has been absolute independence and transparency of these completely separate processes,” the spokesperson said.

“We negotiated a new contract in the Hunter Valley on fair and commercial terms.”

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