The Australian Competition and Consumer Commission proposes to grant authorisation* to Dalrymple Bay Coal Terminal's vessel queue management system for a limited period only, ACCC Chairman, Mr Graeme Samuel, said today.
"The QMS has now been operating for two years and the ACCC has not seen evidence that the underlying causes of the vessel queue are being addressed.
"At the time when authorisation was granted in April 2005, the QMS was proposed as a short term measure to manage the vessel queue while investment and capacity expansions took place.
"However, the ACCC is concerned that the operation of the QMS for an extended period may hinder the development of a long term solution to address contracting issues that exist within the Goonyella coal chain. In particular, the ACCC is concerned that under the current arrangements there is a propensity for service providers to enter contracts based on individual capacity without reference to the capacity of the coal chain as a whole.
"The ACCC considers that the longer the QMS is in place the greater the potential for detriments to occur. As such, the ACCC proposes to grant authorisation for 12 months only, to provide industry with the opportunity to develop and implement a solution to address these issues.
"The ACCC understands that industry participants have established a working group to achieve this task.
"The ACCC is satisfied that, in the short term, the continued operation of the QMS is likely to result in a net benefit by reducing deadweight demurrage** costs and improving economic efficiency, relative to a situation where an excessive vessel queue persists.
"The ACCC will now consult with interested parties on its draft determination before making a final decision in early 2008.
"The queue management system is designed to address the imbalance between the demand for coal loading services at the terminal and the capacity of the Goonyella coal chain. The imbalance has resulted in a large queue of vessels forming off the coast at Dalrymple Bay.
"The QMS essentially rations the amount of coal each producer can export through the terminal on a pro rata basis so that the overall amount handled by the terminal better matches the amount that can be delivered by the coal chain. This is designed to substantially reduce demurrage costs that arise from an excessive queue, while maximising exports.
"The draft determination and application for authorisation will be available by following the Public Registers and Authorisations Register links on the ACCC's website."