Draft report - ARTC’s Non-Hunter Valley Networks compliance with the NSW Rail Access Undertaking – 2022-23 - February 2024

The NSW Rail Access Undertaking (the Undertaking) limits the revenue that rail infrastructure owners can earn each year (the “ceiling test”). Rail infrastructure owners cannot earn more than the economic costs of providing access.

This is intended to ensure that monopoly track owners provide prices and conditions of access to existing and future access seekers on reasonable terms. IPART is responsible for determining whether rail infrastructure owners have complied with this requirement.

The Australian Rail Track Corporation (ARTC) submitted its 2022-23 compliance information for its non-Hunter Valley Coal Network sectors:

• Turrawan to Boggabilla (248.9 km)
• Goobang Junction to Merrygoen (244 km)
• Merrygoen to The Gap (182.5 km)
• Merrygoen to Ulan (103 km)
• Sydney Metropolitan Freight Network (66 km)
• Inland Rail North West Link (6 km).

The ARTC has demonstrated to IPART’s satisfaction that access revenue for each sector is less than the total operating and maintenance cost for those sectors.  We did not need to assess capital costs as this would only increase the gap between full efficient cost and access revenue for each of the sectors.

The Undertaking also requires the access revenue from every access seeker to at least meet the direct cost imposed by that access seeker. This is known as the floor test. The floor test ensures that rail infrastructure owners do not cross-subsidise loss-making operations.  ARTC’s implied access prices for each of the 6 networks exceed the direct cost, so the floor test is met.