Draft decision released on DBCTM's 2015 DAU

The Queensland Competition Authority (QCA) has today released a draft decision on Dalrymple Bay Coal Terminal Management’s (DBCTM’s) 2015 draft access undertaking (DAU).

QCA Chair Professor Roy Green said the draft decision was to not approve DBCTM’s DAU and to indicate where the QCA considers the DAU should be amended in order for it to be approved.

“Our draft decision discusses our assessment of the DAU and the reasons for our decision,” he said.

“There are a number of areas where we consider DBCTM’s proposals need to be amended.

“We have proposed a significant reduction in DBCTM’s Annual Revenue Requirement (ARR) and Terminal Infrastructure Charge (TIC). Our draft proposal would see the ARR and TIC decrease from approximately $260 million and $3.10 respectively in 2015-16 to approximately $184 million and $2.16 in 2016–17.

“These reductions are primarily driven by a decline in the weighted average cost of capital (WACC) applied to DBCTM’s assets. Application of the QCA’s standard methodology for determining WACC leads to a decline from 9.86 per cent per annum to an indicative WACC of 6.10 per cent per annum for the 2016 to 2021 regulatory period. This reflects the very different market circumstances to when DBCTM’s WACC was last determined in 2010.

“We have also proposed some amendments to the terms and conditions of access proposed in DBCTM’s 2015 DAU. These primarily relate to the negotiation and investment framework, potential introduction of differential pricing for future expansions and ring-fencing arrangements.

“We are now conducting public consultation on the draft decision and we encourage interested stakeholders to make a submission.”

Professor Green said consultation is an important part of the QCA’s assessment processes and all submissions received would be taken into account in developing a final decision on the DAU.

Stakeholders are requested to provide submissions to the QCA by 10 June 2016.


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