CBH CALLS IN INDEPENDENT UMPIRE FOR AGREEMENT WITH BROOKFIELD

Lack of progress in discussions concerning access to the state rail network has led Co-operative Bulk Handling to ask the Economic Regulation Authority (ERA) to join its negotiations with Brookfield Rail.

In a statement on October 31,CBH general manager operations, David Capper, said the co-operative had spent four months in meetings with Brookfield Rail, trying to reach an acceptable commercial arrangement to replace the rail access agreement which expires in June 2014.  "Despite negotiating in good faith it seems unlikely that an agreement can be reached, given our differences on pricing. "As a result, we have decided to seek an agreement under the Railways Access Code,” he said.

The closure of the York-Quairading and Trayning-Merredin Tier 3 railway lines by Brookfield  on October 31, has added urgency to the negotiations and caused widespread outcry from community and farming leaders.

Derailment of a loaded train between York and Quairading in September was a catalyst for the closures. This followed refusal by the state government to contribute any funds to upgrade Tier 3 lines or to release details of the lease agreement between the government and Brookfield relating  to the public-owned asset. The government has also refused to take part in negotiations over CBH access to the narrow gauge network.  

Major concerns relating to the closure of the two lines are safety on the inadequate roads that will have to carry a big increase in road trains hauling grain and the cost of transporting grain by road. Closure of Tier 3 lines as well as load and speed restrictions on others including the Tier 2 Miling line have heightened fears for the future of the entire narrow gauge  grain network.

Observers have for some time been asking questions about Brookfield's monopoly control over the rail network. It is not long since the Australian Competition and Consumer Commission (ACCC) ruled against CBH in relation to its influence on grain handling and transport in WA.

It seems that gains in efficiency achieved by CBH for growers by purchasing its own grain trains are being swallowed up by Brookfield increasing its charges to the point where the total cost of transporting grain by rail is only slightly less than by road. Brookfield is wanting the lion's share at the expense of the growers who own CBH.
Instead, they should be sharing costs equally to allow both to make the same return on capital invested.

Mr Capper said negotiations with Brookfield had focussed on access to lines, ensuring that track performance standards were maintained and that fees charged by Brookfield Rail were reasonable. This was to ensure the grain supply chain in WA remained competitive with those in other grain exporting countries. “We can't enter an agreement on behalf of WA growers that costs significantly more and gives us access to fewer tracks with diminishing performance,”  he said.

“WA growers have to match other countries where costs are significantly lower. "Our current track access costs are the highest in Australia. “We expect that under the Railways Access Code, growers will have access to a key piece of State infrastructure at a sustainable price," Mr Capper said.
Lindsay McNeill  

TOP: CBH grain rail wagons put out of operation by the derailment at Jacob's Well between York and Quairading, parked at the siding in York.