Synergies is Australia’s leading advisor on pricing and economic regulation in the port sector. In 2017, Synergies was engaged by Wiggins Island Coal Export Terminal Pty Ltd (WICET) to undertake an independent review of the Wiggins Island Terminal Access Policy. The Access Policy sets out the rules for allocating, managing and expanding capacity at the Terminal.
The WICET Terminal is a coal terminal at the Port of Gladstone, central Queensland. The Terminal is a ‘greenfields’ investment and commenced operations in 2015. WICET, the owner of the Terminal, is in turn owned by its long-term users, which are Gladstone coal producers.
The Terminal operates on terms set out in an Access Policy. Under the Policy, WICET is committed to providing services at the Terminal following completion of Stage 1 and provides a detailed list of services that Gladstone Coal Producers can expect to receive if they use the Terminal. It also establishes the basis for a Gladstone Coal Producers to acquire contractually enforceable rights relevant to the Terminal. The Policy covers the following key access issues:
Scope and objectives;
Review and amendment processes;
Information provision by WICET;
WICET shares and application procedures;
Take or pay arrangements;
Capacity management principles;
Dispute resolution; and
Other matters (i.e. general prohibition on hindering access).
Under the Policy, WICET, in conjunction with an independent consultant with relevant expertise, is required to review the policy every five years from the date of the Financial Close for Stage 1 of the Terminal (i.e. September 2011).
WICET commenced the Access Policy Review in August 2016 and appointed Synergies as the independent consultant in September 2016.
The industry consultation phase of the Review was announced at the end of August 2017 which invited relevant industry stakeholders interested in making a submission to register their interest with Synergies. A total of five parties registered their interest.
Synergies prepared a discussion paper and wrote to the registered parties inviting them to respond. The discussion paper identified a number of amendments that WICET proposed to make to specific provisions of the Access Policy.
Synergies assessed the proposed amendments, together with the submissions received from registered parties, against the key principles established in the Access Policy. Based on this assessment, Synergies recommended that WICET’s proposed amendments were reasonable, and no further amendment to the Access Policy was required.
Synergies assisted WICET in its compliance obligations to conduct the mandatory review.
We had a thorough understanding of WICET and its role in the coal supply chain. This understanding comes from our years advising the port and rail businesses that service the Queensland coal sector.
We have advised these businesses, along a host of other Australian port and rail infrastructure providers, on a wide range of access related issues, including access frameworks, governance issues, access pricing and supply chain co-ordination, both in the context of regulated and commercial access policies.