SUBMISSION TO THE 2015 DRAFT REPORT OF THE TARCOOLA-DARWIN RAILWAY: 10 YEAR REVIEW

The Minerals Council of Australia - Northern Territory Division welcomes the opportunity to make this submission on the Essential Services Commission of South Australia 2015 Draft Report of the Tarcoola-Darwin Railway: 10-year Review of Revenues.

The MCA is the peak industry association that represents the corporate minerals companies in Australia. The members of the MCA are engaged in mineral processing, mining, exploration, or the provision of services to the industry and account for more than 85% of mineral industry output in Australia.

The MCA’s strategic objective is to advocate public policy and operational practice for a world-class industry that is safe, profitable, innovative, environmentally responsible and attuned to community needs and expectations.

The MCA-NT Division represents the interests of members operating, exploring and providing services to the industry in the NT. The minerals industry has a large and diverse presence across the NT which comprises close to 20% of the NT’s gross domestic product whilst employing approximately 4,400 across mining operations for a range of mineral commodities including manganese, iron ore, lead, silver, zinc, gold, bauxite and uranium.

Members of the MCA-NT Division are currently engaged in seeking rail transport solutions for their respective projects. As such MCA-NT Division is well positioned to provide comment on behalf of its members on this review, together with other relevant regulatory issues which we encourage ESCOSA to consider, both in developing its final position for the review and longer term suggestions of improvements to the regulatory framework.

The MCA-NT Division submission therefore seeks to highlight a number of fundamental issues which is contained within the 2015 draft report.

Specifically, the MCA-NT Division:

  • Is of the view that the Tarcoola-Darwin Railway (TDR) is an asset of national significance, key to the economic prosperity of the Northern Territory
  • Believes there is a detrimental lack of transparency and also a presence of information asymmetry within the regulatory framework governing the TDR, together constraining the overall effectiveness of the regulatory regime. Consequently, the current framework is inadequate, has and will continue to jeopardise investment within the Northern Territory
  • Is of the view that developers are in the process of securing the required financing to begin project development, but are frustrated with both a lack of transparency and a lack of certainty around infrastructure pricing and capacity, altogether hampering, if not constraining, global capital investment within NT projects and infrastructure
  • Recommends a further and timely review of the Code be undertaken in light of recent movements within the regulatory environment and competition principles spheres
  • Recommends the regulator reconsider its assessment of relevant revenues as severe restraints do and have existed for inter-modal road freight
  • Recommends the regulator reassess the underlying DORC valuation, including to undertake a condition based assessment of the TDR, as well as providing consideration in altogether excluding government contributions
  • Recommends the regulator reconsider its assessment of an appropriate weighted-average cost of capital.

The MCA-NT Division recognises the importance of the consultative regulatory process prescribed by ECOSA and welcomes any further opportunity to discuss the issues raised in our submission.

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