15 Jul 2014
IPART has released its final report on the rate of return and remaining mine life that will apply to RailCorp’s Hunter Valley Coal Network (HVCN) rail assets from 1 July 2014. This applies only to the 5 sectors (21 kilometres) of track between Newstan and Woodville Junction.
The final report recommends:
- a real post-tax rate of return of 5.9% per annum
- that the remaining mine life be increased to 30 years with a new terminal date of 2044
- that Transport for NSW (TfNSW) investigates options for reducing red tape for rail access under the HVCN regulatory regime.
The final decision on the rate of return is made in accordance with IPART’s standard methodology for calculating the cost of capital. The final decision on the remaining mine life takes into account the best publicly available information on mine reserves and expected production rates, and stakeholder submissions. All else being equal, the final decisions result in a small reduction in the efficient costs of providing the rail network that should be reflected in lower access charges from 1 July 2014.
In making its final decisions, IPART sought advice from Sapere Research Group.
More information about this review can be found on our review page.
For all media inquiries, please contact Julie Sheather 02 9290 8403.
FURTHER iNFORMATION