Aurizon rail dispute a potential $2bn threat to QLD state coffers

Rail operator Aurizon’s dispute with the Queensland Competition Authority (QCA) over the latter’s draft ruling is threatening up to $2 billion in lost royalties for Queensland over the next four years, according to the Queensland Resources Council (QRC). The QCA’s latest draft ruling, released in December 2017, allows Aurizon to earn $3.9 billion from its rail network between July 2017 and June 2021, a figure Aurizon believes is $1 billion lower than it should be.

Aurizon announced via the Australian Stock Exchange (ASX) in March that it planned to change its rail maintenance practices on the Central Queensland Coal Network, affecting the movement of up to 20 million tonnes (Mt) of coal each year.

According to QRC chief executive Ian Macfarlane, Aurizon’s plan could reduce royalties by up to $500 million each year to Queensland’s Palaszczuk government, harming funds for reinvestment in services and infrastructure.

“Over four years, the lost royalties could be up to $2 billion [over four years],” he explained. “While there was reference to a likely impact of Aurizon’s action in the Budget papers, there was no estimate of the damage.

Macfarlane also argued that if Aurizon decides to implement the changes, the “wafer-thin” budget surpluses of $148 million, $160 million and $110 million in the respective 2018-19, 2019-20, and 2020-21 financial years “would be quickly wiped out”.

Liberal National Party leader Deb Frecklington also commented, saying that royalties were being threatened on account of “Aurizon’s dispute with the Queensland Competition Authority”.

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