ACCC issues draft decision on ARTC's application to vary its interstate rail access undertaking
The Australian Competition and Consumer Commission has issued a draft decision not to allow the Australian Rail Track Corporation to vary its interstate access undertaking.
ARTC, which operates rail tracks in New South Wales, South Australia, Victoria and Western Australia, has sought the ACCC's consent to vary its access undertaking which sets out the terms and conditions for operators of train services to access the interstate mainline track.
"The ACCC has a preliminary view on the information presented to it that the proposed variation to the liability and indemnity clause in the Indicative Access Agreement (IAA) is not justified," ACCC Chairman, Mr Graeme Samuel, said today.
For example, the variation would stop a rail operator from recovering from ARTC, under the IAA, any loss or damage to the operator's customer that ARTC has caused by breaching the IAA, where the rail operator contracted to indemnify the customer for its loss. The ACCC understands that it is industry practice for rail operators to offer limited contractual indemnities in respect of losses that may be incurred by a third party.
"The ACCC believes that a party should continue to be liable to indemnify the other party under the IAA for loss or damage that one party's acts or omissions have caused to third parties.
"As such, having regard to the relevant statutory criteria, the ACCC is of the preliminary view that it is not appropriate to consent to the proposed variation.
"Further, the ACCC is of the preliminary view that ARTC has not consulted with rail operators prior to applying to the ACCC seeking the variation as required by the undertaking."
The ACCC is seeking submissions from interested parties on the draft decision before it issues a final decision. The ACCC has requested submissions by no later than 21 January 2009.
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, please call Ms Lin Enright, ACCC Media, on (02) 6243 1108 or 0414 613 520.
For general inquiries, please call the ACCC Infocentre: 1300 302 502.
The ACCC provides an automatic email alert system whenever there are changes to a page or pages to which you have subscribed.
To receive information from the Media Centre, please go to Media Centre, news releases and enter your email address under Notify me.
To receive information on this matter, go the Regulated industries, Regulated industries quick links, Rail, click on matter and enter your email address under Notify me.
The ACCC accepted ARTC's 2008 Interstate Rail Access Undertaking on 30 July 2008 and it became operative on 20 August 2008, with a 10 year term. The undertaking sets out the terms and conditions for providing access to the interstate 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.
On 9 October 2008, ARTC applied to the ACCC for consent to vary the Undertaking under Part IIIA of the Trade Practices Act 1974. The variation application relates to the indemnity and loss regime in clause 15 of the Indicative Access Agreement of the Undertaking so that the liability of either party to third parties for loss or damage is limited in certain circumstances.
The proposed variation will not affect the rest of the undertaking, which will remain unchanged and operative.
Under s. 44ZZA(7) of Part IIIA of the Act, a service provider may vary an undertaking at any time, but only with the consent of the ACCC. The ACCC may consent to the variation if it thinks it appropriate to do so having regard to the specified statutory criteria.
The ACCC must assess the variation application, having regard to the legislative criteria in s.44ZZA(3) of the Act to determine whether the variation is appropriate and consent should be given.
