Logistics News

WA rail access negotiations splinter

Both CBH and Brookfield Rail say they are committed to finding a deal, but with a week to go forced arbitration looks more likely

 

WA rail access negotiations between Brookfield Rail and cooperative grain marketer CBH are due to be completed by June 24, with a deal looking increasingly unlikely.

Brookfield Rail says it believes a mutually agreeable solution can be reached before the deadline, but says CBH has told its members to prepare for a phase of arbitration.

Its general manager David Capper published an open letter in industry newspapers on Thursday. It emphasises CBH’s preference for a deal sooner rather than later, but also highlighted its willingness to take the next step if Brookfield Rail doesn’t offer what it considers fair terms.

“We are committed to seeing this process through and to negotiate in good faith, but if need be, we will go to arbitration to get a fair deal for grain growers,” Capper writes.

Arbitration would see an independent expert impose a pricing structure on both parties. “It could take more than a year to get a final outcome but it has the potential to set up a fair agreement for the future,” Capper says.

Brookfield Rail says it is disappointed CBH has publicly doubted the current process.

“Brookfield Rail has acted in good faith throughout the process and is ready and willing to continue negotiations right up until the last hour of this current 90-day period,” it said in a reply statement.

“We note that an arbitration period will likely be a costly and time-consuming exercise for both parties, and will unfortunately create further uncertainty for growers.”

Price is the ultimate sticking point between the two parties.

On the one hand, Brookfield Rail says access fees need to be increased in order to fund the required maintenance and capital investment involved with providing reliable, efficient, and safe rail across the grain network.

CBH – on the other hand – says grain growers are facing tough business conditions and cannot afford to pay more for rail access. “Knowing how tight the margins are in farming, an increase in the tens of millions of dollars could have a devastating impact on thousands of growers,” Capper writes.

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