WAFarmers has made a submission to the Economic Regulation Authority (ERA) regarding Brookfield Rail Pty Ltd’s (BR) floor and ceiling cost determination.
Given the lack of specific information made available by BR it was argued that the current WA Rail Access Regime is failing the users of the system, including the CBH Group, and ultimately grain producers of WA by not providing effective fair and transparent competition.
It also argued that the current regime does not encourage the efficient use of railways by facilitating a contestable market for access to railway lines.
Areas of concern included:
- Track access fees in WA are considerably more than access fees in every other state in Australia
- The methodology for determining floor and ceiling prices in WA is flawed
- The extensive range between ceiling and floor costs is too wide to be meaningful
- There is an urgent need for a regulator to monitor the operational performance of the line including maintenance schedules
- The lack of transparency regarding BR under the WA Rail Access Regime is in stark contrast to the sentiment under which the Regime was established
- Since 2000, growers have spent around $400 million on access fees yet they are experiencing declining performance standards of the track
- Supply chain costs must be kept to a minimum for growers to increase productivity and allow WA to compete with international competitors into growing markets such as Asia.