AUSTRALASIA RAILWAY (THIRD PARTY ACCESS) BILL 1999 Second Reading Speech

Northern Territory Second Reading Speeches

AUSTRALASIA RAILWAY (THIRD PARTY ACCESS) BILL 1999

(This an uncorrected proof of the daily report. It is made available under the condition that it is recognised as such.)

Bill presented and read a first time.

Mr COULTER (AustralAsia Railway): Mr Speaker, I move that the bill be now read a second time.

This bill is another milestone in achieving construction of the railway. It outlines the third-party access regime which will apply to the rail line between Tarcoola and Darwin. Within the regime described in the bill, access is guaranteed to any train operator who wishes to operate on the railway.

For the information of honourable members, I will briefly outline the background to this bill. Part IIIA of the Trade Practices Act establishes a legal regime whereby third parties can gain access to facilities of national significance. This is commonly known as the national access regime. The basis of the national access regime is that the facility-owner and access-seeker must first negotiate on access terms and conditions. If negotiations break down and an access dispute develops, the matter is referred to an independent arbitrator who makes a binding and enforceable determination. It is the pricing rules which are provided to the independent arbitrator and period of certification which are the most important part of any third-party access regime.

The national access regime provides 3 alternative regulatory mechanisms ensuring access. The first is declaration. The third-party access-seeker can apply to the National Competition Council to have the facility ‘declared’ under part IIIA, with the Australian Competition and Consumer Commission then arbitrating in access disputes. The second mechanism is an access undertaking. Where the facility-owner makes an access undertaking under part IIIA, approved by the ACCC, the facility cannot be ‘declared’. Third parties are entitled to obtain access to the facility on the terms and conditions in the undertaking. The third mechanism is certification. Where a state or territory access regime has been certified as ‘effective’ – that is, in accordance with competition policy - the facility cannot be declared under part IIIA. This third mechanism is the most appropriate for the railway project.

There is difficulty in achieving an access regime that meets both the competition policy access requirements and the consortia requirements for debt-servicing and return on equity. This is because of the bias in part IIIA towards ‘open access’. The whole approach is predicated on opening access to existing infrastructure and does not cater well for greenfield projects such as the AustralAsia Railway. It is both this conflict – that is, return on the huge investment versus open access - and the issue of a seamless access regime applying across 2 jurisdictions that the Northern Territory government, the South Australian government and the AustralAsian Railway Corporation have applied themselves to.

The bill before the Assembly will be reflected in mirror legislation to be introduced in the South Australian parliament early next month. This is to enable one access regime to uniformly apply between Tarcoola in South Australia and Darwin. However, passage of the legislation through 3 Houses of Parliament is only part of the process before the access regime can be applied. The Northern Territory and South Australia will jointly apply to the National Competition Council seeking that the NCC recommend to the Commonwealth Treasurer that the joint South Australia/Northern Territory access regime be certified as ‘effective’.

I now turn to the principle features of the bill. The head legislation is reasonably short with the main sections providing for an access code and that the Commercial Arbitration Act does not apply to arbitration of an access dispute. A large part of the access code covers standard commercial arbitration provisions. Other provisions of the access code include: joint SA/NT ministerial appointment of a regulator who is subject to the joint direction of the SA and NT ministers (however, no direction may be given to the regulator in performing the role of conciliator or appointing arbitrators); a conciliation mechanism if the parties to access dispute agree to conciliation; appointment of an arbitrator or arbitrators to arbitrate a dispute with the arbitration being binding and enforceable; matters the arbitrator must take into account, including the pricing principles which are a schedule to the code; the pricing principles which, while providing for access for third-party train operators, seek to maintain the integrity of the rail infrastructure-related cash-flows of the successful consortium; appeals on points of law against an arbitrator’s award; a prohibition on hindering access to the railway; enforcement provisions; and amendments to the code for the first 12 months by statutory instrument to allow for negotiations with the preferred consortium on minor changes required by the National Competition Council or the Commonwealth Treasurer. One point I cannot emphasise enough is the necessity to maintain the integrity of the successful consortium’s cash-flow. The bill seeks to do this, balanced of course with reasonable access to third-party train operators.

This bill, mirrored in South Australia, and the joint one-stop-shop access regime that the 2 jurisdictions will institute, are evidence of the continuing determination of the Northern Territory and South Australia to make the AustralAsia Railway a reality. I commend the bill to honourable members.

Debate adjourned.

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