IPART has identified several issues with the current NSW rail access framework, which include:
- TAHE faces difficulties delivering on terms of access agreements, and access seekers find it difficult to hold parties accountable
- a lack of transparency around non-price terms of access, including capacity allocation
- a lack of enforcement and compliance mechanisms, which means monopoly power can be exercised.
We have made 33 recommendations to address these issues. Under our final recommendations:
- The NSW rail access framework would hold access providers accountable for the provision of access to the NSW network, by:
- requiring that for each rail network, a single entity is responsible for all aspects of providing access
- introducing new compliance rules and enforcement powers.
- Parties would need to negotiate according to defined timeframes, which provides an incentive for parties to reach agreement and more certainty when a dispute is triggered.
- Price protections would be maintained so that access providers cannot recover more revenue than the costs of providing access, and 2 new price protections would be added:
- users would be protected from unreasonable price increases once they have invested in the rail operations
- users could not be charged more than their competitors unless there are cost differences.
- Other bargaining power imbalances would be addressed through information disclosure requirements, clear and transparent non-pricing terms and conditions, and obligations to consult with access seekers.
- The framework would be more responsive to changing environmental and market circumstances.
Implementing our recommended changes would increase the efficient use and investment in rail, and drive competition with road freight to lower freight costs, increasing productivity. There is strong support for these changes from industry, business organisations and the two access providers.