Brookfield Rail Deal Goes off the Rails

A grain train on the Midland line. Picture: David Baylis
A grain train on the Midland line. Picture: David Baylis

THE negotiation period between CBH and Brookfield Rail has ended without either party being able to agree on an outcome.

After a 90-day negotiation period, the two parties have not reached an agreement over long-term access to the WA Grain Freight Network.

CBH Group spokesman David Kapper said the group would now consider the options available.

CBH Group chief executive Andy Crane said it sought a better deal on behalf of growers because the deal offered by Brookfield Rail for access to vital grain lines was “completely unreasonable”.

“Paying significantly more for fewer tracks is inexplicable and damaging to the sustainability of the WA grains industry,” Dr Crane said.

“This dispute has been wrongly characterised as two large players failing to agree on commercial terms.”

Dr Crane said the issue was far deeper than that.

“This is 4200 growers negotiating through CBH for access to a key State asset at a fair price and minimum acceptable performance,” he said.

“At the end of the 90-day negotiation period Brookfield wants WA growers to pay about double their current access rates.

“The margins in farming are increasingly tight; an increase in the tens of millions of dollars each year could have a devastating impact on growers and we will not sign up for that.”

One of the options now available is arbitration, which would see an independent arbitrator determine a pricing structure and terms for access to the rail network into the future.

Arbitration is held under the Rail Access Code if a reasonable return for farmers can not be negotiated before December.

A spokeswoman for Brookfield Rail said she was disappointed a long-term access agreement had not been reached and that CBH had flagged taking the matter to arbitration.

“Brookfield Rail is of the view a mutually acceptable agreement could have been negotiated without resorting to arbitration,” she said.

“We note that arbitration will likely be a costly and time-consuming process for both parties and will create further uncertainty and frustration for growers.”

“Even with the best of intentions from both parties, an arbitration process could take anywhere between 12 months and two years, which will mean the negotiation of further interim agreements during this process.”

She said to deliver on CBH’s requirements, which included long-term access to the Miling line and some Tier 3 lines, access fees had to increase to underpin the required maintenance and capital investment.