The Queensland Competition Authority (QCA) has today released a final decision on Dalrymple Bay Coal Terminal Management's (DBCTM's) 2015 draft access undertaking (DAU).
QCA Chair Professor Roy Green said the final decision was to not approve DBCTM's DAU and to indicate where the QCA requires the DAU to be amended in order for it to be approved.
"Our final decision discusses our assessment of the DAU and the reasons for our decision," Professor Green said.
"In large part, the amendments we require DBCTM to make to the DAU are similar to the amendments proposed in our April draft decision.
"While we have provided for a significant reduction in DBCTM's Annual Revenue Requirement (ARR) and Terminal Infrastructure Charge (TIC) from DBCTM's current access undertaking, I note the final decision values are higher than those in the draft decision. Our final decision sees the ARR and TIC increase from an average of approximately $186.4 million and $2.19 per tonne respectively in the draft decision to approximately $191.8 million and $2.43 per tonne in the final decision.
"The weighted average cost of capital (WACC) applied to DBCTM's assets has declined further since the draft decision—from 6.10 per cent per annum to 5.82 per cent per annum, reflecting current market conditions. However, the impact of the lower WACC on DBCTM's revenues is more than offset by a higher site remediation allowance and a lower deduction for expected inflation.
"We have maintained the majority of the amendments to the terms and conditions of access that we proposed in our draft decision. These primarily relate to the negotiation and capital processes, including providing for the potential introduction of differential pricing for future expansions. However, we have refined the ring-fencing arrangements we require—to reflect the withdrawal, earlier in the year, of the bid by Brookfield (DBCTM's owner) for Asciano (which owned the Pacific National above-rail business).
"As required by the QCA Act, we have issued DBCTM with a secondary undertaking notice requiring DBCTM to amend its DAU in the way we consider appropriate. DBCTM now has 60 days to give the QCA an amended DAU. In accordance with the QCA Act, this period could be extended to 90 days."
If DBCTM does not comply with the secondary undertaking notice, the QCA may prepare, and approve, a DAU for DBCTM's declared services.
Professor Green said consultation is an important part of the QCA's assessment processes, and he thanked DBCTM and other stakeholders for their extensive input into the QCA's assessment of DBCTM's 2015 DAU.
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