End of the lines ... for now
CBH and Arc Infrastructure’s nearly 10-year scuffle over rail access is FINISHED.
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.
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CBH chief executive Jimmy Wilson.
Arc chief executive Paul Larsen.