Reclaimer RL1 Insurance Proceeds
In February 2004, reclaimer RL1 suffered a catastrophic failure. DBCT Management had insurance in place on the reclaimer and filed a claim for the failure. Following lengthy legal proceedings, that claim was settled in 2010.
In the interim (i.e. late 2006), DBCT Management completed a Ďshort gainí expansion of the terminal to increase the capacity to 59 million tonnes per annum (mtpa) which included a new machine to replace RL1. In its June 2007 decision on DBCT Managementís short gain draft amending access undertaking (DAAU), the Authority retained the value of the original reclaimer in the regulatory asset base and approved a higher revenue allowance and tariff that included the costs associated with the replacement RL1, on the basis that any insurance payments would ultimately be deducted from the asset base.
On 9 August 2011, DBCT Management submitted a DAAU to deduct a portion of the insurance settlement from the asset base and make a one-off payment to terminal users.
On 12 August 2011, the Authority published the DAAU and sought submissions from stakeholders by 8 September 2011. In doing so, the Authority advised that, in the absence of stakeholder submissions, it may proceed directly to a final decision.
The Authority has reviewed the DAAU and accepts that DBCT Managementís treatment of insurance proceeds is reasonable. Given this, and that stakeholders did not make any submissions, on 29 September 2011, the Authority made a final decision to approve DBCT Managementís DAAU.
The Authorityís decision is available below. If you have any questions on this matter, please contact Ravi Prasad on 07 3222 0533.