The Australian Competition and Consumer Commission has granted interim authorisation* to the operator of the Dalrymple Bay Coal Terminal to commence immediately the implementation of a queue management system, ACCC Chairman, Mr Graeme Samuel, said today.
"The system is designed to address the current imbalance between the demand for coal loading services at the Terminal and the capacity of the Goonyella coal chain.
"This imbalance has led to a large queue of up to 50 vessels sitting off the coast. The ACCC is advised that even with the immediate implementation of the system, it will take two to three months to reduce the vessel queue to a workable length given existing coal chain capacity. In the absence of the proposed system, Australian coal producers could face substantial demurrage** costs as high as $550 million for 2005.
"The queue management scheme essentially rations the amount of coal each producer can export through the terminal on a pro rata basis so that the overall amount handled by the Terminal better matches the amount that can be delivered by the congested coal chain. This is designed to substantially reduce demurrage costs that arise from an excessive queue.
"Just this month, the ACCC granted conditional authorisation to a similar scheme in the Hunter Valley. Like the Hunter Valley scheme, the proposed queue management system is a transitional measure which aims to limit the demurrage costs associated with excessive queues until coal chain expansion projects are operational. The ACCC considers the duration of any authorisation in Dalrymple Bay will be a key issue.
"The granting of interim authorisation in no way binds the ACCC in its consideration of the substantive application for authorisation. The ACCC will continue to consult with interested parties to inform its consideration of the application and is investigating the potential impact of the queue management system on new entrants. Should authorisation ultimately not be granted, producers have the ability to re-schedule vessels and production timetables based on annual contract tonnages for the balance of 2005".
More information regarding the application and granting of interim authorisation, including the terms, will be available by following the Authorising anti-competitive conduct and Authorisations links on the ACCC's website.