Ministerial Statement: Treasurer releases roadmap ...

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Treasurer and Minister for Employment and Economic Development
The Honourable Andrew Fraser
21/05/2010

Treasurer releases roadmap for fairer, more competitive coal future

A more competitive and prosperous Queensland coal export industry is the State Government's central objective as it prepares for QR National's listing on the Australian Stock Exchange, Treasurer Andrew Fraser said today.

In launching Railing Queensland's coal - a new era for Queensland's coal export industry he said that as part of the State's plan to ensure a fair and open access regime, the Government is enhancing the competition framework that underpins the State's coal rail operations.

"Our reforms aim to deliver a rail export framework that will be nimble, have the capacity to expand for greater demand, entrench non-discriminatory provisions, guard against marginalisation of smaller companies, and cater for new entrants."

He said that the State already had a strong, regulated rail environment that had successfully fostered competition citing Asciano as already having 17% of Queensland's coal haulage market and forecasting 30% in five years.
"Our enhancements will ensure Queensland has the nation's best open access regime.

"A new Access Undertaking, with new safeguards for mines and rail operators, has been submitted by QR Network to the Queensland Competition Authority, and while the State welcomes this development, we will take the safeguards a step further.

"We will be legislating to ensure even more transparent operations and thereby creating an environment even better suited to competition. We want competition and the efficiencies competition delivers."

Among the legislative enhancements are:

1) Preventing anti-competitive behaviour - a new explicit requirement that vertically-integrated access providers must not unfairly discriminate between access seekers in negotiating with access seekers, or under an Access Undertaking, or between access holders in providing access; and

2) a requirement that Access Undertakings of vertically-integrated access providers se t access charges to only recover those costs reasonably attributable to the access service to prevent anti-competitive cost-shifting, cross-subsidies.

Additional QCA powers are to be included to supplement existing powers of investigation and to improve the timeliness of regulatory processes.

To complement these changes the Government will also be legislating protections which are specific to QR National's corporate governance framework - to address stakeholder concerns about the internal corporate governance of QR Network. Among them are:

1) a requirement that the majority of directors of QR Network's Board must be independent of the executive management of the QR Group

2) a requirement that access agreements between QR Network and its related entities be approved in advance by the QR Network Board, and

3) that directors must not approve an access agreement with QR National unless the directors are reasonably satisfied the agreement is on arm's length terms.

"These enhancements are among those sought by industry and competitors," he said.

The roadmap Railing Queensland's coal - a new era Queensland's coal export industry is available at www.qld.gov.au/assetssale/businesses/qr-national

"In April I announced that Government will apply to the National Competition Council for certification for the State's rail access regime. This followed QR's new Draft Access Undertaking submission to the Queensland Competition Authority.

"Today we flag our legislative changes ensuring an even more transparent and competitive coal rail transport environment," he said.

"It is our view that the privatisation of QR National and reforming the state's access regime will be the catalyst for a new era of growth in Queensland's coal export industry," he said.

A new QCA Exposure Bill will be released for comment in the coming weeks.