MOVING FORWARD: An aerial shot of the rail-loop formation, the Wiggins Island Rail Balloon Loop project that Aurizon states it delivered on time.
MOVING FORWARD: An aerial shot of the rail-loop formation, the Wiggins Island Rail Balloon Loop project that Aurizon states it delivered on time. Contributed

WICET part owner loses multi-million dollar legal stoush

INTERNATIONAL mining company, and part owner of Wiggins Island Coal Terminal, Glencore has had its challenge against Aurizon to reduce its fees quashed by the Queensland Competition Authority.

Aurizon expects the decision generate $89 million for the company in revenues it lost previously. 

Glencore and other mining companies in the southern Bowen Basin set up an agreement with Aurizon to pay a fee on top of the rail company's usual fees for using the Wiggins Island Rail Project, which has had works carried out near Yarwun.

The purpose of the additional fee was to give Aurizon a return for building the rail networks for WICET on schedule and below the expected cost.

WICET.
WICET. Mara Pattison-Sowden

Since the agreement was made between the coal companies and Aurizon, the price of coal has fallen and two of WICETs, the previous owners Cockatoo Coal and Banadanna Energy are no longer a part of the terminal.

Aurizon has always stated that it has held up its end of the bargain but Glencore argued to QCA that the access fees to use the Aurizon network should be reduced because of the additional fee.

"Glencore cited that circumstances are now different (when compared to the time of signing)," the QCA decision stated.

"Glencore submitted that the WIRP Deed access conditions provided monopoly profits reflecting Aurizon Network's market power at the time of negotiations and resulted in inefficient access pricing which cannot be consistent," QCA stated.

But the QCA found that by deleting the "commercially negotiated access conditions" would have an impact on future regulations carried out by the QCA.

"We do not consider it would be appropriate to reduce the reference tariff as submitted by Glencore," QCA stated.

In a statement released by Aurizon it stated that it welcomed the decision by QCA and stated the decision would recover $89 million in recoveries in revenue from 2013-14 and 2014-15 financial years.



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