Cost fear over rail access delay

Rueben HaleThe West Australian

Wheatbelt growers are concerned rail agreement delays may cost the industry millions of dollars this harvest.

Time is running out for CBH and Brookfield to agree on a long-term rail access agreement by June 24.

If a deal cannot be achieved in time, tense negotiations between the parties may be repeated - talks which originally led to growers being hit with an increase of more than $5 million in rail access fees.

The current interim agreement will expire on December 31.

In April, CBH was forced, under orders from Brookfield Rail, to remove its $175 million rail fleet from the grain freight rail network after the expiry of the interim rail access agreement at 11.59pm on the last day of that month.

The ensuing hours after the removal resulted in a tense outburst from CBH chief executive Andy Crane, who accused Brookfield of "effectively holding a State-owned asset to ransom".

The eventual deal ended up costing growers up to $1.40 extra per tonne to transport last harvest's remaining four million tonnes of grain by rail to port.

The two parties are part-way through a 90-day negotiating period for a long-term rail access agreement under WA's Railway Access Code and if an agreement cannot be made by June 24, an independent arbitrator will need to be appointed.

Wheatbelt Railway Retention Alliance president Greg Richards said growers in the lowest rainfall areas of the State would be most severely impacted by the increased access rates.

Mr Richards said the price increase that Brookfield Rail had indicated it required represented about 10 per cent earnings before interest and tax cost impost to those growers.

"Kulin stands to be worst hit by an agreement impasse, already paying $3.86 a tonne extra after the closure of the Tier 3 lines on June 30 last year," he said.

"If an agreement is not achieved before next harvest these growers will be paying at least $1.50 a tonne additional to this rate.

"We need to see some protection for growers until an agreement is reached."

Meanwhile CBH operations David Capper said CBH was not prepared to speculate on a time frame to reach an outcome at this stage.

"CBH has been meeting regularly with Brookfield to attempt to negotiate a long-term agreement. We certainly hope we can resolve this issue as quickly as possible," he said.

Mr Capper said growers could not afford "inefficient links" in a marginal industry.

"CBH's aim is to ensurethe rail network serves WA growers with an appropriate performance and cost comparable to our domestic and international competitors," he said.

Brookfield Rail chief executive Paul Larsen said his company was working hard with CBH to lock down an agreement.

He believed the agreement would give WA's grain growers certainty their product would be safely and efficiently transported on rail on a long-term, sustainable basis.

"We are committed to reaching an agreement by June 24 that is satisfactory to both Brookfield Rail and CBH, and will avoid the parties having to resort to an arbitrated process," he said.

"However, in doing so, we will not compromise on the safety and efficiency of the rail network. Nor will we resile from the fact access fees must increase to cover the basic costs of maintaining operations on the tracks for the long term, including reopening the Tier 3 lines CBH is seeking access to."

·Meanwhile, a WA salt supply company has been forced to transport its salt by road, thereby adding to the pressure on country roads already caused by the increased number of grain trucks.

WA Salt Supply chief executive Lelio Gaudieri said his business had used rail for more than 30 years and he was disappointed about having to make the change because of substantial rail costs.

WASS tranports an average of 130,000 tonnes of salt from its mine at Koolyanabing to its refineries at Fremantle and Bunbury.

Since the beginning of the year the company has been running about six trucks a day on metropolitan roads instead of using trains.

Mr Gaudieri said his company had been in long-term discussions with above-ground rail operator Horizon, but in the end it came down to a commercial decision that had to be made.

"Rail was the most logical way to go and it was disappointing we could not get a rate that suited our business," he said.

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