Goldsworthy Railway Application for declaration of a service provided by the Goldsworthy Railway under section 44F(1) of the Trade Practices Act 1974 Final Recommendation 29 August 2008 Table of Contents Abbreviations and glossary of terms ............................................................................... 7 1 Council processes and final recommendation ............................................................. 13 Final recommendation ............................................................................................................ 15 2 The application .......................................................................................................... 16 The application and applicant................................................................................................. 16 The service sought to be declared .......................................................................................... 16 The facility ............................................................................................................................... 17 The service provider ............................................................................................................... 18 The decision maker ................................................................................................................. 18 Other Pilbara railway applications .......................................................................................... 19 Issues regarding the application ............................................................................................. 19 3 Access regulation under Part IIIA ................................................................................ 24 Objectives of access regulation .............................................................................................. 24 Submissions on access regulation policy ................................................................................ 25 Declaration of a service .......................................................................................................... 27 The character of regulation under Part IIIA ............................................................................ 28 The declaration criteria ........................................................................................................... 31 4 Criterion (a) – Promotion of competition .................................................................... 33 Legal requirements ................................................................................................................. 33 The dependent market(s) ....................................................................................................... 35 The market for haulage services ............................................................................................. 44 The market for iron ore tenements ........................................................................................ 52 Conclusion on criterion (a) ..................................................................................................... 61 5 Criterion (b) – Uneconomical to develop another facility ............................................ 62 Legal requirements ................................................................................................................. 62 Application and submissions .................................................................................................. 63 Alternative tests for assessing criterion (b) ............................................................................ 73 The Council’s assessment ....................................................................................................... 74 Conclusion on criterion (b) ..................................................................................................... 88 6 Criterion (c) – National significance ............................................................................ 89 Legal requirements ................................................................................................................. 89 Application and submissions .................................................................................................. 89 The Council’s assessment ....................................................................................................... 91 Conclusion on criterion (c) ...................................................................................................... 91 7 Criterion (d) – Health and safety................................................................................. 92 Legal requirements ................................................................................................................. 92 Application and submissions .................................................................................................. 92 The Council’s assessment ....................................................................................................... 93 Conclusion on criterion (d) ..................................................................................................... 95 8 Criterion (e) – Effective access regime ........................................................................ 96 Legal requirements ................................................................................................................. 96 Access undertakings ............................................................................................................... 96 Application and submissions .................................................................................................. 97 The Council’s assessment ....................................................................................................... 99 Conclusion on criterion (e) ................................................................................................... 101 9 Criterion (f) – Not contrary to the public interest .......................................................102 Legal requirements ............................................................................................................... 102 Application and submissions ................................................................................................ 105 The Council’s assessment ..................................................................................................... 128 Conclusion ............................................................................................................................ 149 10 Section 44F(4) – Develop a facility for part of the service .........................................152 Legal requirements ............................................................................................................... 152 Application and submissions ................................................................................................ 152 The Council’s assessment ..................................................................................................... 153 Conclusion on section 44F(4) ................................................................................................ 155 11 Section 44H(8) – Duration of declaration .................................................................156 Legal requirements ............................................................................................................... 156 Application and submissions ................................................................................................ 156 The Council’s assessment ..................................................................................................... 157 Conclusion on section 44H(8) ............................................................................................... 158 Appendix A Public consultation ...................................................................................159 Appendix B Map of the Goldsworthy Railway ...............................................................164 Appendix C Arbitration of access disputes under Part IIIA .............................................166 Appendix D Summary comparison of relevant regulatory and related features impacting major east coast coal transport facilities and Pilbara railways with and without access ............................................................................................................169 References ..................................................................................................................171 Figures and tables Figure 5-1 Relationship between investment and capacity by type of railway expansion ................................................................................................. 79 Table 5-1 Potential demand for the Goldsworthy Service ........................................... 83 Abbreviations and glossary of terms above rail Assets and equipment such as locomotives and ore cars that operate on a railway above rail service A service provided using above rail assets and equipment usually for the purpose of hauling or moving freight and/or passengers by rail ACCC Australian Competition and Consumer Commission AGS Australian Government Solicitor AMEC Association of Mining and Exploration Companies API Australian Premium Iron Joint Venture Applicant The Pilbara Infrastructure Pty Ltd ARTC Australian Rail Track Corporation Atlas Iron Atlas Iron Limited below rail Fixed railway assets such