Capital expenditure claim

We assess the prudency and efficiency of Aurizon Network’s capital expenditure to determine if it should be included in Aurizon Network’s regulatory asset base for the Central Queensland coal network.

The assessment framework is set out in Aurizon Network’s 2017 access undertaking (clause 7A.11.6 and schedule E).

Capital expenditure claim 2023-24

Aurizon Network submitted its 2023-24 capital expenditure claim on 10 September 2024.

We will assess Aurizon Network’s capital expenditure claim to determine if it should be included in Aurizon Network’s regulatory asset base for the Central Queensland coal network.

As part of our assessment, we will determine:

• the extent to which the asset replacement and renewal expenditure is consistent with the approved renewals strategy and budget (where relevant) and the prudency and efficiency of capital expenditure that departs from this
• the prudency and efficiency of other capital expenditure, including for works undertaken as part of an interim renewals strategy and budget.

We asked for submissions on Aurizon Network’s claim and received 1 response.

On 3 December 2024, Aurizon Network amended its proposed Interest During Construction (IDC) amounts, correcting a calculation error in the initial claim.

We are continuing our assessment.

Capital expenditure claim 2022–23

Aurizon Network submitted its 2022–23 capital expenditure claim on 19 September 2023.

Aurizon Network’s claim included capital expenditure consistent with the approved 2022–23 renewals strategy and budget (RSB) for each coal system, expenditure deferred from 2021–22, and additional (or substitute) scope that Aurizon Network identified as requiring prioritisation during FY23.

As part of our assessment we engaged AECOM to provide engineering advice on the prudency and efficiency of Aurizon Network’s capital expenditure claim.

We approved the 2022–23 capital expenditure claim on 18 April 2024.

Capital expenditure claim 2021–22

Aurizon Network submitted its 2021–22 capital expenditure claim on 19 September 2022.

Aurizon Network’s claim stated that it included capital expenditure consistent with the approved renewals strategy and budget (RSB) for each coal system, expenditure that departed from the RSB, and expenditure that was not included in the RSB.

We released a draft decision on 20 December 2022. In response, Aurizon Network provided additional information in support of its claim, including requests to amend claim amounts for interest during construction, the bridge ballast program and system track renewals.

After we considered this information, we accepted Aurizon Network’s amended 2021–22 capital expenditure claim.

Capital expenditure claim 2020–21

Aurizon Network submitted its 2020–21 capital expenditure claim on 17 September 2021.

Aurizon Network’s claim consisted of three parts, relating to:

• the delivery of Aurizon Network’s advanced planning and scheduling (APS) system
• asset replacement and renewal expenditures
• the Starlee passing loop project.

We engaged Arcadis to provide engineering advice on the prudency and efficiency of Aurizon Network’s capital expenditure claim for its APS project.

We approved the 2020–21 capital expenditure claim on 21 April 2022.

Capital expenditure claim 2019–20

Aurizon Network submitted its 2019–20 capital expenditure claim on 31 July 2020.

We engaged Arcadis to provide engineering advice on the prudency and efficiency of Aurizon Network’s claim. A sample of projects was chosen for Arcadis to assess.

We approved the 2019–20 capital expenditure claim on 19 February 2021.

Capital expenditure claim 2018–19

Aurizon Network submitted its 2018–19 capital expenditure claim on 25 October 2019 and subsequently amended the claim on 22 November 2019 and 19 December 2019.

We engaged Flagstaff Consulting Group (FCG) to provide engineering advice on the prudency and efficiency of Aurizon Network’s claim. A sample of projects was chosen for assessment.

Aurizon Network further submitted a revised claim on 30 April 2020 in response to the consultant’s report and our initial assessment.

We approved the revised 2018–19 capital expenditure claim on 27 May 2020.

Capital expenditure claim 2017–18

Aurizon Network initially submitted its 2017–18 capital expenditure claim on 31 October 2018. It amended its claim on 16 November 2018.

We approved most of Aurizon Network’s amended capital expenditure claim for 2017–18, except for two projects that required adjustments, as outlined in our decision notice.