ACCC extends Port of Newcastle's capacity balancing system

The Australian Competition and Consumer Commisiion has extended the Port of Newcastles capacity balancing sytem until June 30.

The Australian Competition and Consumer Commission (ACCC) has issued a draft decision proposing to grant authorisation to Port Waratah Coal Services (PWCS) and Newcastle Coal Infrastructure Group (NCIG) for a short-term capacity balancing system until June 30.

A capacity balancing system was first introduced at the Port of Newcastle in 2004 and, since then, the ACCC has become increasingly concerned about whether the underlying issues contributing to the capacity imbalance within the coal industry are being addressed.

The PWCS "stage 1 allocation" will aim to manage the coal vessel queue while the industry develops and implements a long-term solution.

The ACCC says it believes the system will generate public benefit, including demurrage savings for Australian coal producers as well as reducing the environmental and safety risks associated with an offshore vessel queue.

Authorisation of such a system provides immunity from court action for conduct which may otherwise raise concerns under the competition provisions of the Trade Practices Act 1974.

There had been some doubt as to whether an extension to the system beyond the end of 2008 would continue to be in the public interest, but it seems efforts made by the industry and Sate Government have changed this but made it clear efforts must be kept up.

"The industry and New South Wales Government appears to now be making significant progress towards finalising a long-term solution in the Hunter Valley," ACCC Chairman Graeme Samuel says.

"If at any time the ACCC is not satisfied that sufficient progress continues to be made, it will consider revoking the interim authorisation and not granting authorisation in its final determination."

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