Queensland Rail's 2012 Draft Access Undertaking. New Hope Corporation submission

Size: px

Start display at page:

Download "Queensland Rail's 2012 Draft Access Undertaking. New Hope Corporation submission"

Stephany Hart
5 years ago
Views:

1 New Hpe Grup A Divisin f NEW HOPE CORPORATION LIMITED ABN Cntact Direct Phne: Direct Fax: gclarke@newhpecal.cm.au Website: New Hpe Grup 13 July 2012 Queensland Cmpetitin Authrity Level 19, 12 Creek Street Brisbane, Queensland Australia 4000 Attentin Mr Jhn Hall Dear Jhn Queensland Rail's 2012 Draft Access Undertaking New Hpe Crpratin submissin Thank-yu fr the pprtunity t prvide this submissin n Queensland Rail's 2012 Draft Access Undertaking. New Hpe is the largest cal prducer in Queensland Rail's West Mretn System. In additin, New Hpe is develping the Cltn prject, which will rail cal t Gladstne using rail infrastructure which is predminantly managed by Queensland Rail. New Hpe is pursuing grwth pprtunities acrss its prtfli and seeks regulatry arrangements which prmte efficient supply chain perfrmance, reasnable and predictable charges fr use f the infrastructure, and a practical pathway t expansin. New Hpe ntes that the draft undertaking prpses a relatively 'light handed' regulatry arrangement, with substantial discretins available t QR in a range f key areas. New Hpe cnsiders that this is acceptable fr the term f UT1, and shuld be reassessed fr UT2 taking int accunt the extent t which QR has applied these discretins n a reasnable basis. New Hpe has participated in the develpment f the Queensland Resurces Cuncil's submissin n the QR draft undertaking and, subject t the specific cmments set ut belw, supprts the QRC submissin. GAVANS LETTERDOC PEOPLE Registered Office: Pstal Address: 3/22 Magnlia Drive, Brkwater, Queensland 4300 PO Bx 47, Ipswich, Queensland 4305 Australia Website: PERFORMANCE

2 Page 2 f 5 Term f undertaking: Given that the draft undertaking prpses a light-handed apprach t regulatin, and that OR's apprach t applying the undertaking is untested, New Hpe cnsiders that the term f this undertaking shuld be limited t fur years. Hwever, we understand that a 30 June expiry date is preferred and therefre wuld supprt a term f up t 4.5 years (t 30 June 2017) if the undertaking becmes effective later than 1 January 2012, r a term f up t 3.5 years (t 30 June 2016) if the undertaking becmes effective during Tariffs: OR shuld seek t develp and put in place a transparent, repeatable methdlgy fr the develpment f reference tariffs as sn as pssible. New Hpe cnsiders that July is a reasnable date fr the revised tariffs t take effect. In rder t achieve this, OR shuld cmmit t submit (r be deemed t have submitted) its prpsed reference tariffs n later than 31 March Clearly the currently prpsed cmmitment, t submit reference tariffs fr apprval by as late as 30 June 2013, is nt cnsistent with apprval by 1 July New Hpe accepts the extensin f current tariffs in the interim perid. New Hpe cnsiders that the existing tariff structure (ie. a 'per path' plus a 'per gtk' element) is apprpriate and that this structure shuld be retained in the reference tariffs t be prpsed by OR in New Hpe cnsiders that the frm f regulatin shuld prvide apprpriate incentives t OR withut allwing OR t retain an unreasnably level f benefit where tnnages substantially exceed the levels n which reference tariffs are based. A 'price cap' arrangement with mid-term review mechanisms is therefre preferred ver a revenue cap frm f regulatin. Capacity Allcatin and Queuing: The prcess fr allcating additinal capacity shuld be clear and equitable and the ability t allcate capacity based n OR's cmmercial interests shuld be subject t certain limitatins. In particular, where cmpeting access applicatins bth invlve cal-carrying train services which wuld pay reference tariffs r tariffs derived frm reference tariffs, the revenue arising frm different rigins/destinatins shuld nt be a differentiating factr (ie. clause 2.7.2(iv)(A) and (B) shuld nt apply). This is because the prcess f cnsidering OR's cmmercial interests shuld take place during the setting f reference tariffs. It is nt apprpriate t discriminate against a particular mine n the basis that the tariff prpsed by OR and apprved by the OCA is cnsidered less attractive by OR than the apprved tariff fr anther rigin/destinatin. Instead, cmpeting applicatins shuld be assessed based n the extent t which each applicant is ready and able t use the paths sught (ie. has the necessary prductin capacity, apprvals and netwrk exit capability). In the event that tw Access Seekers are equally "ready and able", wuld bth pay tariffs based n reference tariffs, and are nt materially differentiated based n cntract term r credit risk, then we wuld expect that the first f these parties t apply fr access shuld be the first t be allcated capacity. Investment Framewrk: OR prpses an Investment Framewrk in which OR will have n bligatin t invest in the netwrk and will face n limitatins n the terms sught frm expanding custmers in return fr OR ffering t finance expansins. New Hpe is prepared t accept a relatively 'light handed' regulatry arrangement fr OR fr the perid f the first undertaking, and will seek mre prescriptive arrangements in the event that this GAVANS LETTER. DOC

3 Page 3 f 5 flexibility is used inapprpriately. Hvv'ever, 'vve d cnsider that there is a need, in UT1, fr greater clarity regarding QR's bligatin f ffer a 'user funding' ptin and fr this ptin t represent a credible alternative t QR funding. In particular, It is nt apprpriate that QR shuld have a right, "in its abslute discretin", t refuse t cnstruct an Extensin in the circumstances set ut in (a)(iv). The clause shuld be amendment t prvide that QR must state the reasns fr its bjectin and set ut the changes t the prpsed prject which wuld be required t address the stated cncerns. Dispute reslutin shuld apply t ensure that the bjectins raised have a reasnable basis. In additin, the test in part F (that the prject des nt adversely affect QR's legitimate business interests) shuld be clarified t ensure that the lss by QR f the pprtunity t seek Access Cnditins cannt be deemed t adversely affect QR's legitimate business interests. That is, the test f an adverse effect shuld be that QR is n wrse ff than had the prject nt been undertaken, rather than n wrse ff than had the Access Cnditins been accepted. We d nt cnsider that it is necessary, in all cases, that Access Agreements be in place fr all f the Additinal Capacity (1.4.1 (a)(v)). Fr example, if a user funds a prject which creates a level f uncntracted capacity, but QR is nt wrse ff as a result f this situatin (eg. because the vlume frecasts upn which reference tariffs are based exclude the space capacity r because rebates t the user-funder are limited t the cntracted tnnes), then the requirement in this sectin is nt an apprpriate basis n which QR shuld refuse t undertake the prject. The undertaking shuld prvide that the QCA may, during the term f UT1, require QR t submit a mre detailed set f arrangements fr user funding fr apprval (and that the QCA may develp these if nt prvided by QR r if the prpsed arrangements are nt apprved). The undertaking shuld set ut the high level principles fr these arrangements, including that they shuld be tax effective fr user funders and shuld impse n material csts n QR and shuld nt require QR t prvide funding. We d nt prpse that QR shuld cmmit t develp mre detailed user funding arrangements at this time, as (i) there is nt a clear need fr this mechanism at present and (ii) if required, we wuld hpe that QR wuld first seek t vluntarily develp such a framewrk. Renewal Rights: Clause 2.7.2(b) t (d) appears t seek t create a renewal right in respect f Train Services fr which there is an applicable Reference Tariff. A renewal right fr Train Services invlving cal haulage is imprtant due t the lng term nature f mining investments. We cnsider that this clause shuld be amended: t include a prcess under which QR ntifies the Access Hlder f the need (and right) t renew a reasnable perid ahead f the expiry f this right. This is, it shuld nt be necessary that a cmpeting applicatin exist in rder t trigger a ntificatin t the Access Hlder. T prvide a renewal right fr carry-carrying train services perating under a negtiated access charge, such as Cltn (ie. the current drafting wuld nt prvide a renewal right because there is n applicable Reference Tariff). GAVANS LETTER DOC

4 Page 4 f 5 Recgnitin f 'Custmers': In respect f cal carrying train services, Access Rights are generally held by train peratrs fr use by specific custmers (mines). The undertaking shuld recgnise the interests f these custmers, and the undertaking and Standard Access Agreement shuld prvide specific rights fr custmers. This shuld include: A requirement that each Access Agreement entered int fr cal carrying train services nte the identity f the custmer. That the renewal right applies t the nminee f the custmer rather than t the current Access Hlder (ie. the Custmer shuld elect whether t exercise the renewal right itself, thrugh the current Access Hlder, r thrugh an alternative peratr). That transfers f Access Rights t a different rigin/destinatin cannt prceed withut the cnsent f the custmer. That the custmer may itself, withut the cnsent f the Access Hlder, trigger a transfer f Access Rights t an alternative Access Hlder (fr example, if the custmer is changing abve-rail peratrs r wishes t hld the Access Rights itself). That the custmer will have a right (ahead f any ther Access Seeker), t enter int a new Access Agreement (including thrugh a new peratr) in circumstances where an Access Agreement is terminated by OR due t default by the peratr r is terminated by the peratr due t default by OR. New Standard Access Agreements: Clause 2.8 allws the QCA t give OR a ntice requiring OR t submit a prpsed standard access agreement fr a specified type f Train Service nt cvered by a Standard Access Agreement. New Hpe cnsiders that the clause shuld be widened t allw the QCA t require OR t submit a prpsed frm f access agreement in which the rights and bligatins f abve-rail peratrs are separated frm thse relating t capacity and payment bligatins (end-user access agreement). While New Hpe des nt see an immediate need fr this frm f agreement, and understands that there are ptential efficiencies in deferring this issue until an end-user agreement is apprved fr Central Queensland, we cnsider that the QCA shuld reserve the right t request this during the term f UT1 if required. Reductin f Access Rights: The prpsed trigger fr the reductin in access rights (clause 19 f the standard access agreement) is nt apprpriate. The test f a failure t use 7 in 12 paths is t shrt a perid in which t trigger cnsequences which are extremely serius fr custmers. In additin, the drafting des nt prvide any prcess fr the access hlder t retain the paths by demnstrating that the failure will nt be sustained r that there is a lng term need fr the paths, nr is there any right fr custmers t be infrmed f the issue, t remedy the situatin r t take ver the paths (eg. thrugh an alternative peratr) in the case where the failure was the fault f the peratr. Permanent lss f train paths culd have serius cnsequences fr the custmer, and shuld nly apply in extreme cases f sustained underutilisatin, particularly given that the prpsed take r pay arrangements prvide strng prtectin t OR against any resulting reductin in revenue. GAVANS LETTER.DOC

5 Page 5 f 5 Access Charges Escalatin: Schedule 3 f the prpsed standard access agreement shuld clarify that CPI escalatin shuld nt apply t Access Charges in circumstances where Access Charges are derived frm reference tariffs which are themselves escalated, r which the QCA has determined shuld nt be escalated (eg. because they have been determined taking inflatin int accunt). Yurs faithfully, NEW HOPE GROUP.....,,... Clarke Manager Cal Lgistics GAVANS LETTER. DOC

Best Execution & Client Order Execution Policy. October P age 1 6. BE31/10/17 v1

Best Execution & Client Order Execution Policy. October P age 1 6. BE31/10/17 v1 Best Executin & Client Order Executin Plicy Octber 2017 BE31/10/17 v1 P age 1 6 Cntents 1. Backgrund... 3 2. Order placement... 3 3. Order executin factrs... 3 4. Order executin plicy... 3 5. Order executin