The Australian Competition and Consumer Commission has issued its final decision granting authorisation to Port Waratah Coal Services (PWCS) and Newcastle Coal Infrastructure Group (NCIG) for a transitional capacity balancing system until 30 June 2009.
The scheme, called 'PWCS Stage 1 Allocation', seeks to manage the coal vessel queue while the industry develops and implements a long term solution to capacity issues in the Hunter Valley coal chain. The scheme has had interim approval since December 2008.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
"The ACCC commends the recent efforts of industry and the NSW Government, to be now close to implementing a long term solution in the Hunter Valley," ACCC Chairman, Mr Graeme Samuel, said today.
Since December 2008, various industry working groups have been focusing on key elements of the long term solution. The signing of a detailed Implementation Memorandum by PWCS, NCIG and the Newcastle Port Corporation in early April is a significant milestone for the industry.
There is however a lot of work for the industry to complete in order to implement the long term solution by its target date of 30 June 2009.
Any unnecessary delays in finalising a long term solution would generate significant public detriment. However, the ACCC is satisfied that the operation of the current capacity balancing system has not stalled the industry's progress in this regard.
The ACCC considers the system is likely to generate public benefits, including demurrage savings for Australian coal producers and reducing the environmental and safety risks associated with a vessel queue offshore.
"The industry has had sufficient time to develop and finalise an appropriate long term commercial framework for efficient investment in the Hunter Valley, which should remove the need for transitional 'capacity balancing systems' to operate at the Port of Newcastle beyond the end of June," Mr Samuel said.
The ACCC's determination will be available from the ACCC website (follow the 'Public registers' and 'Authorisations and notifications registers' links).
The ACCC is advised that a separate application for authorisation covering relevant aspects of the long term solution may be lodged soon.