Asciano sees red over QR's Felix deal

Asciano complains to competition authority over QR's coal deal in the Hunter Valley with Felix Resources

Asciano has written to the Queensland Competition Authority (QCA) claiming Queensland Rail Network (QRN) lowered its Central Queensland track charges to Felix Resources to win a contract in the Hunter Valley.

QRN and the Asciano-owned Pacific National both bid for the contract, and a QR spokesperson says the rail carrier has done nothing wrong.

But in his letter to the QCA, Asciano’s general manager of access and regulation, Tim Kuypers, says the tariff proposal provided to Felix by QRN is "highly unusual" given the QCA had accepted a $5.67 per net tonne reference tariff in QR’s draft decision.

According to Asciano, this tariff was replaced by a $4.60 per tonne tariff—with the rate backdated to July 2007—and ultimately clinched the contract for QRN.

Kuypers writes that Felix informed Asciano that a key decision in why QRN was awarded the contract was due to the carrier altering its charges for above and below operations in the Queensland region of Minerva.

This, according to Asciano, means QRN may not have been operating as a stand alone business.

Kuypers says the company may have incorporated its above and below rail operations, thus taking a "non commercial position" to win the contract and creating a "cross subsidy" in the process.

"If this is the case, QRN has provided a cross subsidy from the monopoly network business to the competitive business, the latter which is soon up for sale," Kuypers says.

But a spokesperson for QR has rejected Asciano’s claims, saying all dealings were made within the law.

"QR continues to win coal haulage business based on its high quality and cost- competitive services," a QR spokesperson says.

"We will be confirming with the QCA that all commercial arrangements with Felix Resources have been entirely appropriate and independently negotiated by QR Network and QR Coal businesses."

The QCA confirms it has received the letter from Asciano and that no immediate action will be taken against QR.

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