The Australian Competition and Consumer Commission has granted interim authorisation* to a plan to reduce the queue of vessels waiting to load coal at the Port of Newcastle, ACCC Chairman, Mr Graeme Samuel, said today.
"Granting interim authorisation allows Port Waratah Coal Services to implement the plan, which essentially reduces the amount each producer can export through the port on a pro rata basis so that the overall amount handled by the port better matches the amount that can be delivered by the rail system.
"Interim authorisation allows the parties to engage in the conduct while the ACCC considers the substantive merits of the application.
"The ACCC recognises that the current situation is urgent, as there is a significant queue (around 40 vessels) currently sitting off the port. This results in a substantial cost to the industry, as coal producers must pay demurrage fees to vessel owners while their vessels are sitting in the queue. Without this solution in place, PWCS estimates that producers could be paying up to A$200 million this year in demurrage.
"The ACCC is also satisfied that the plan proposed by PWCS will not result in any less coal being moved through the port than would be the case otherwise without the plan.
"At least some small coal producers and traders oppose PWCS's plan. However, they have yet not been able to provide the ACCC with persuasive reasons why the plan would disadvantage them. In particular, they have not made it clear why they would be able to export more coal through the Port without the plan (and with the vessel queue persisting) than they would be able to export with the plan.
"However, it is important to note that this interim decision should not be taken as indicative of the ACCC's final decision on the matter, and that the ACCC will continue to consult with interested parties".
PWCS' proposed solution involves a pro rata reduction to each coal producers' forecast of the quantity of coal it anticipates putting through the port in 2004.