Brookfield Rail must now negotiate with CBH Group over access for grain trains like this one to use all lines, including the closed Tier 3 lines.AN independent arbitrator has determined there is “capacity” to cart grain on closed Tier 3 rail lines, effectively forcing operator Brookfield Rail to begin negotiating with the CBH Group over access to them.
The arbitrator’s confidential determination last Friday is seen as a small victory for CBH because it is binding on Brookfield Rail under the Railways (Access) Code 2000 (WA) and forces a window of opportunity open for CBH to negotiate fee and conditions for using the Tier 3 lines which service some of its regional grain receival sites.
The determination also covers the Miling Tier 2 line which Brookfield has said is scheduled to close at the end of this year.
Brookfield, which has control of the State’s southern freight rail assets until 2049, has maintained since grain rail access negotiations began with CBH in November 2013, that there was “no capacity” on Tier 3 lines because of their deteriorated condition.
Brookfield has previously said publicly that it is prepared to work “co-operatively” with CBH and the State Government to reopen the 509 kilometres of Tier 3 lines it controversially placed into care and maintenance on June 30 last year.
However, in its submission to the Economic Regulation Authority (ERA) – which appointed the arbitrator – on floor and ceiling rail access fees for CBH it did not include figures for the Tier 3 lines, claiming there was “no capacity”.
Friday’s determination provides 90 days from late March for Brookfield and CBH to negotiate a 10-year access agreement for all rail lines CBH wants to use.
An extended arrangement which allows CBH and its train operator Watco to run its three-year-old purpose-built grain train fleet on Tier 2 and high-volume Tier 1 lines to move grain to port is due to expire in April.
Under the railways code, if an agreement cannot be achieved, an arbitrator can be appointed to determine access fees and conditions.
CBH said in a brief statement on Friday: “Today a determination was made by an arbitrator under the Railways (Access) Code 2000 (WA) (the Code) in relation to Co-operative Bulk Handling Limited’s proposal to access the Tier 3 and Miling grain freight lines operated by Brookfield Rail.
“Unfortunately, confidentiality restrictions under the Commercial Arbitration Act 2012 (WA) mean that CBH cannot publically disclose the terms of the arbitrator’s determination without Brookfield Rail’s consent.
“CBH will seek Brookfield Rail’s permission to publically release the determination.
“CBH is pleased that the arbitration determination has been made.
“Resolution of the arbitration has cleared the way for CBH to negotiate with Brookfield Rail about the terms for access to the grain network.
“CBH is hopeful that an agreement can be secured for all of the parts of the network to which CBH has sought access (including the Tier 3 and Miling lines)”.
Brookfield issued a statement on Monday confirming the arbitrator’s determination.
“This decision now clears the way for the commencement of commercial negotiations for a long-term rail access agreement between CBH and Brookfield Rail,” a spokesperson said.
“As specified by the (railway) Code, the 90-day negotiation period will commence towards the end of March following a legislatively-prescribed preparation period for both parties,” the Brookfield spokesperson said.
“We look forward to reaching a collaborative solution that underpins the required investment in the grain freight rail network and provides supply chain security and certainty to our Western Australian farmers for the long term.”
The arbitrator’s determination builds on the ERA’s June 30 determination last year that CBH was “entitled” to seek access to Tier 3 lines.
CBH’s submission to the ERA confirmed it was prepared to accept safety requirements restricting train speeds, axle loadings and times of usage previously imposed by Brookfield before it closed the Tier 3 lines.
In the month leading up to the closure of the lines CBH was moving 6000 tonnes of grain a day on them.
CBH has never had an agreement under the railway code with Brookfield Rail and previous access arrangements were negotiated outside of the code.
Quairading grower and Wheatbelt Railway Retention Alliance chairman Greg Richards said the arbitrator’s determination was “a good turn-around”.
Although CBH has previously said it does not want to use the Quairading-York Tier 3 line, Mr Richards said he was hoping Brookfield being forced to negotiate access with CBH would change that view.
“I’ve asked them (CBH) about my line – the Quairading line – because it’s the most direct westerly route, and they’ve told me they do want to use it,” Mr Richards said.
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