Aurizon agreement gets watchdog approval

20th December 2019 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

Aurizon agreement gets watchdog approval

Photo by: Reuters

PERTH (miningweekly.com) – The Queensland Competition Authority (QCA) has approved freight services provider Aurozin’s revised draft amending access undertaking for the Central Queensland Coal Network (CQCN).

The revised UT5 access undertaking was submitted to the QCA in May this year, following a landmark agreement between Aurizon and coal miners.

The key elements of the undertaking includes an extension of the terns of the access undertaking to ten years, from July 2017 to June 2027, enabling an improved long-term investment decisions for the CQCN, as well as greater customer involvement in assessing and pre-approving strategies and annual budgets for asset renewal and replacements, as well as maintenance expenditure.

The agreement also allows for an improved return, which better reflects the risks of owning and operating the CQCN, and a rebate mechanism to customers if Aurizon performs below target levels.

“The industry agreement delivered by Aurizon and coal customers is ground-breaking,” said Aurizon MD and CEO Andrew Harding.

“We now have a regulatory model that delivers long-term investment certainty and promotes productivity and performance in the Queensland coal supply chain. With regulatory approval now in place, we can put all our collective energies towards continued improvement and efficiency gains,” Harding said.


The QCA’s approval of the access undertaking meant that the weighted average cost of capital (WACC) that Aurizon earns increases from 5.7% to 5.9%, back dated to May 2019.

A further increase in the WACC to 6.3% will occur on the completion of an independent capacity assessment of the CQCN. In the event that a capacity deficit is identified, the WACC increase to 6.3% will only start once Aurizon notifies relevant parties of proposed options to address the deficit.


The capacity assessment is expected in the second half of next year.