The Australian Competition and Consumer Commission regulator said that it is likely to approve a new agreement over coal loading arrangements at Newcastle.
The report quoted Mr Graeme Samuel chairman of Australian Competition and Consumer Commission as saying that the agreement forged between the New South Wales Government, the port operator and coal producers, including BHP Billiton, gives certainty to the industry.
He said that it is possible the deal will cut shipping queues at the port. Mr Samuel said that "It is looking like we will approve the reinstatement of the interim authorizations that were there to try and manage the queues at the port and to enable the parties to proceed towards putting in place the long-term ship or pay contracts that are an integral part of this long-term solution.”
He said that approving the new agreement will add certainty to encourage investment in increasing the port's capacity. It will provide for increased capacity and thus the ability for ships to, rather than sit in a queue, to come through to the ports, take the coal that's coming from the Hunter Valley coal mines and then move it into export.
Mr Samuel said "That's what's been needed for some time now. But of course no investor was ever going to invest in expanded capacity until they had at least some assurance that their investment would earn a reasonable return; that is would be paid for either by ships using it, or else by parties saying we'll pay for it if we don't have the necessary requirements to use the capacity. They will sign long-term what are called ship or pay contracts; that's contracts to either have ships use the capacity or else pay for it in any event. That will provide the certainty that investors need to expand the capacity of the port."
Mr Samuel said that ACCC has not seen all the details of the agreement, but has seen enough to demonstrate that it will be a step forward in improving the port's operation. We've only seen the bare bones of the agreement as was put to us last evening, but I'd have to say to you that the impression that we get, particularly in discussions with the New South Wales Government, is that this is an agreement that is binding on the parties. It does take the parties a long way forward now in terms of the implementation of a long-term solution.”
He added that "If the agreements are in the form that we understand them to be, and we're only into the very initial sort of review and consultation phase, but if they are in the form, I think there's every expectation that what we've now taken is the big step needed towards the long-term solution with Port Waratah."
(Sourced from abc.net.au)
