End of the lines ... for now

CBH and Arc In­fra­struc­ture’s nearly 10-year scuf­fle over rail ac­cess is FIN­ISHED.

Countryman - - FRONT PAGE - Cally Dupe and Jenne Bram­mer

A seven-year agree­ment to 2026 is now in place, af­ter 3.5 years of ar­bi­tra­tion. Tier 3 lines will not re­open, but CBH has ex­pressed in­ter­est in them.

The Mil­ing line will stay open, end­ing years of un­cer­tainty.

The agree­ment is worth more than $400 mil­lion.

The lengthy rail ac­cess bat­tle once de­scribed by CBH as “tor­tu­ous, drawn-out and ex­pen­sive” is over, but Aus­tralia’s big­gest grain han­dler is now ready­ing it­self to ex­plain the out­come to thou­sands of grow­ers its lead­ers say will have mixed reactions.

CBH plans to hold a se­ries of grower meet­ings dur­ing the next week to ex­plain the mean­ing of Mon­day’s rail ar­bi­tra­tion out­come, af­ter it and Arc In­fra­struc­ture an­nounced a long-term ac­cess deal al­low­ing CBH to use the rail net­work to 2026.

The seven-year agree­ment is un­der­stood to be worth more than $400 mil­lion and ends a nearly 10year de­bate, which re­sorted to ar­bi­tra­tion in 2016 when ne­go­ti­a­tions failed to re­solve how much CBH should have to pay to use the rail net­work.

Un­der the deal, the shut­tered Tier 3 lines — which closed in 2014 — will not re­open, which CBH said was be­cause high cap­i­tal costs de­ter­mined in ar­bi­tra­tion meant open­ing the lines was cur­rently un­eco­nom­i­cal.

How­ever, the Mil­ing line will re­main open — a re­lief for grow­ers con­cerned the line may close.

Se­nior lead­ers from CBH were ex­pected to hold grower meet­ings in Bruce Rock on Thurs­day, Novem­ber 7, and Kulin, on Fri­day, 8, to meet grow­ers af­fected by the clo­sure of the Tier 3 lines five years ago.

CBH will also hold a meet­ing at Mil­ing on Mon­day, Novem­ber 11, to dis­cuss the per­for­mance of the Mil­ing line, which is cur­rently be­ing re­paired by Arc af­ter a train de­rail­ment in June — the sec­ond on the line in three months.

Shire of Mil­ing pres­i­dent and lo­cal farmer Ken Sey­mour said the ar­bi­tra­tion out­come brought “re­lief” to Mil­ing farm­ers.

How­ever, For­mer CBH board mem­ber John Has­sell, who had lob­bied for the re­open­ing of Tier 3, said CBH should vig­or­ously push for ac­cess to the Tier 3 lines.

He gave the ex­am­ple of Kulin, which shifts an av­er­age 175,000 tonnes on road an­nu­ally, cost­ing about $5 a tonne more than rail, amount­ing to $875,000 less in those farm­ers’ pock­ets each year.

Mr Has­sell said the story was repli­cated across many com­mu­ni­ties, in­clud­ing Cor­ri­gin, Narem­been, and Kon­dinin.

“They (the Gov­ern­ment) should be tak­ing those lines off Arc and CBH should be given the op­por­tu­nity to run them,” he said.

On Mon­day, CBH re­vealed it would con­sider re­open­ing the Tier 3 rail­way lines in the Wheat­belt if it was granted ac­cess to the lines by State Gov­ern­ment and lessee Arc In­fra­struc­ture.

CBH chief ex­ec­u­tive Jimmy Wil­son said CBH could “pos­si­bly” put in a for­mal re­quest to have ac­cess to the 509km of Tier 3 Wheat­belt lines.

“There may be be some time in the fu­ture when we could con­temNovem­ber plate bring­ing those lines back,” he said.

“But that op­tion would only be avail­able if we had ac­cess to those lines and there wasn’t any sun­set dates like we have with 2026 (un­der the cur­rent agree­ment).

“We pre­fer they were gifted to us. We would then eval­u­ate what we could do, whether it was a sound eco­nomic de­ci­sion, and present it to the board be­fore mak­ing that de­ci­sion.”

The ar­bi­tra­tion process was trig­gered by CBH in early 2016 af­ter for­mal ne­go­ti­a­tions to gain long-term ac­cess to Arc’s rail net­work failed.

Arc — pre­vi­ously Brook­field Rail — holds a 49-year lease on WA’s en­tire rail net­work.

MORE See next week’s Coun­try­man

CBH chief ex­ec­u­tive Jimmy Wil­son.

Arc chief ex­ec­u­tive Paul Larsen.

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