ACCC accepts undertaking for interstate rail access
The Australian Competition and Consumer Commission has accepted an undertaking from the Australian Rail Track Corporation that provides for train services to access much of Australia's interstate rail track.
The ACCC's decision on ARTC's Access Undertaking was issued today.
ARTC's undertaking sets out the principles and processes under which ARTC, as an infrastructure provider of rail, will be obliged to provide access to businesses wishing to run trains on ARTC's interstate rail network.
The ACCC's approval of ARTC's undertaking will allow rail operators to use the track and compete for rail business.
"More rail competition results in a less costly, improved transport service and that means lower delivered prices for goods, including exports," ACCC Chairman, Mr Graeme Samuel, said today. "The ARTC undertaking is also important to promoting certainty of investment and growth within the rail freight industry over the coming decade.
"The undertaking is particularly important as continued growth in rail freight volumes and rail efficiency is likely to be of increasing significance to Australia's long-term competitiveness."
The undertaking has been assessed by the ACCC pursuant to Part IIIA s.44ZZA of the Trade Practices Act 1974. The ACCC approved ARTC's undertaking following an extensive public consultation process, including submissions from interested parties on the undertaking, submissions on the ACCC's draft decision, and submissions on earlier versions of the undertaking ARTC lodged with the ACCC in June and December 2007.
The ACCC completed its assessment within a tight timeframe, releasing its draft decision within four months of receiving ARTC's undertaking application and its final decision within three months of its draft decision.
Part IIIA allows infrastructure providers to submit a voluntary access undertaking to the ACCC for approval. An access undertaking allows access providers to obtain a degree of certainty about the terms and conditions on which access will be made available to their infrastructure and allows rail operators that are considering establishing new infrastructure to settle access matters before they invest.
The Australian Rail Track Corporation Ltd was established in 1998 to manage access to the standard gauge rail network (i.e. the below rail network) connecting the mainland capital cities between Brisbane and Perth.
Specifically, the interstate rail network covers the mainline standard gauge track linking Kalgoorlie in Western Australia, Adelaide, Wolseley and Crystal Brook in South Australia, Melbourne and Wodonga in Victoria and Broken Hill, Cootamundra, Albury, Macarthur, Moss Vale, Unanderra, Newcastle (to the Queensland border) and Parkes in New South Wales.
ARTC's management responsibility incorporates the planning, scheduling and transit of trains through the network and associated commercial arrangements with train operators (i.e. access arrangements). In September 2004, ARTC entered a 60-year lease over the interstate NSW rail tracks. ARTC is a vertically separated infrastructure provider and does not operate trains.
ARTC Interstate Rail Access Undertaking
ARTC sells access rights in the form of train paths for a price (i.e. an access charge) to above rail operators (train operators) wishing to access ARTC's network to run a train. Access negotiations are developed and finalised through a contract known as an access agreement. The undertaking includes an indicative access agreement which acts a pro forma contract to assist in speeding up access negotiations.
The undertaking is based on a negotiate/arbitrate model whereby access seekers can first seek to negotiate access with ARTC using the undertaking and Indicative Access Agreement as the basis. Where negotiations fail and a dispute arises these can be subject to dispute resolution procedures outlined in the undertaking with the ACCC acting as arbitrator.
The undertaking has been assessed by the ACCC pursuant to Part IIIA s.44ZZA of the Trade Practices Act 1974 and is the first time the ACCC has undertaken an assessment of an access undertaking since the Act was amended to include an objects clause and pricing principles.
ARTC's Undertaking provides for:
a 10 year regulatory term to help promote investment certainty in above and below rail services
clear negotiation and dispute resolution processes
defined access prices for indicative services, that is, the predominant train service utilising the network structured as a multi-part tariff comprising two fixed components and a variable component
protections for access seekers regarding price increases in between access undertakings
a detailed Indicative Access Agreement to provide ARTC and access seekers with greater certainty about their rights and obligations
approval of capital investment in the interstate rail network in the order of $670 million over the first five years the undertaking
a review of the undertaking after five years to be conducted by ARTC in consultation with industry to ensure it continues to meet the need of access seekers, industry and ARTC
access to the network on a scheduled or ad hoc train path basis
a requirement for ARTC to consult industry on the provision of additional network capacity
public reporting of indicators on ARTC's service quality
the ACCC to apply to the Federal Court for an order to enforce the undertaking if it considers ARTC has breached any terms of the undertaking.
