Arup's benchmarking report - 2019 and 2020 costs8 Feb 2023

On 8 February 2023, the ACCC published a report by Arup. The report benchmarks ARTC's overhead costs for the Hunter Valley rail network against similar businesses. Arup's analysis compares 3 major categories of overhead costs against benchmarked organisations. These cost categories are:

  • corporate overheads
  • business unit management, and
  • network control.

The ACCC intended to include Arup’s findings in our 2019 and 2020 annual compliance assessment. Arup provided its first benchmarking report to the ACCC in May 2022. We asked Arup do some extra analysis and the final report was ready in late September 2022.

We didn’t want to delay publication of the 2019 and 2020 compliance final determination. We also didn’t want to limit stakeholders’ opportunity to comment on Arup’s findings. Therefore, we are considering Arup's benchmarking of ARTC's costs in parallel with our compliance assessments.

Arup found that, when compared separately, ARTC's corporate overhead costs compare well with both Aurizon and Arc Infrastructure's costs. However, Arup considers that ARTC’s corporate overhead costs should be combined with business management and network control costs. This would ensure a fairer comparison against other rail operators.

Arup's findings show ARTC's combined costs are higher than its benchmarked rail sector peers. This amount varies depending on the approach taken.

Arup has prepared its benchmarking report for the ACCC. We are considering Arup's findings and sought stakeholder submissions to help inform our views. We sought feedback on the following issues in Arup's benchmarking report:

  • Do you think that Aurizon Network’s 'infrastructure maintenance' costs should be included or excluded for benchmarking purposes? (See pages 26 and 40 of the analysis)
  • What changes would you suggest to make this benchmarking a more like-for-like comparison?
  • Are there any other rail networks you think should be included as industry competitors for comparison?
  • Do you have a view on the factors beyond ARTC’s control that are influencing ARTC’s costs? (For example, particular stakeholder needs of the Hunter Valley rail network, limitations or constraints of the network).

Stakeholder submissions were due by Thursday 6 April 2023 and are available at: Stakeholder submissions

If you wish to engage further on Arup's benchmarking report, please contact transport@accc.gov.au.