Aurizon’s fight with watchdog costing taxpayers in royalties


TAXPAYERS face being short-changed $2 billion in mining royalties due to an escalating fight between the state's biggest coal freighting company and competition watchdog.

Rail operator Aurizon and the Queensland Competition Authority are at war over the watchdog's draft ruling which restricts the company's maintenance bill on the central Queensland coal network, forcing it to scale back work and restrict train movements.

If the fight continues, the cost to Queensland coal companies could be as much as $4 billion in lost exports, eating into the government's take in coal royalties and costing taxpayer's $2 billion.

So far the decision has cost Aurizon about $2 billion in lost market value. Aurizon chief executive Andrew Harding has slammed the regulator and labelled the system as "broken".

In a sign of growing bitterness in the feud, Aurizon has initiated a judicial review of QCA chairman Prof Roy Green over apprehended bias.

Prof Roy Green has taken a job at the Port of Newcastle, a competitor in the coal export chain to Aurizon and the Queensland ports, but won't take up the role until June and remains head of the QCA.

Aurizon is concerned the decision will cost it billions more if the draft decision from the QCA becomes permanent.

"The system is broken,'' Aurizon chief executive Andrew Harding said yesterday.

And now there is potential legal action from the industry to stop Aurizon from implementing its maintenance cuts.

Mr Harding said the solution to the problem was in Prof Green's replacement.

"We are looking for a new chairman with the right commercial background and business acumen to fix a broken system,'' he said.

The issue is registering in Japan where coal buyers have expressed concern about the reliability of supply.

The Queensland Resources Council chief executive Ian Macfarlane said coal companies were being advised by Aurizon this week that it would dramatically cut train movements on the Goonyella system of the Central Queensland Coal Network.

The Goonyella system connects many of Queensland's largest metallurgical coal suppliers to the port of Hay Point.

"Based on these developments, QRC believes it is now clear Aurizon is determined to stop the movement of 20 million tonnes of coal," Mr Macfarlane said.

"It is nothing short of economic vandalism. It will cut $4 billion from Queensland exports and $500 million in annual royalties paid by the industry to the Queensland Government."

"Over the forward estimates the reduction in royalties paid to the Queensland Government could be as much as $2 billion."

"This is not the State Government's fault. This is not the industry's fault. This is the sheer arrogance of Aurizon."

"This is an Aurizon rail fail, and the people of Queensland will be punished."