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WITH time running out, CBH Group and Brookfield Rail are not close to agreeing on a price acceptable to both for a 10-year grain train rail access deal.
Brookfield chief executive officer Paul Larsen admitted last week there was "some way to go yet" but was hopeful a negotiated agreement could be achieved in the next 12 days while his company still had control of pricing.
However, CBH general manager operations David Capper said unless there was a "substantial change in the price" offered in that time, CBH expected to ask for an arbitrator to determine a price schedule for access.
"At this stage of the process we are still miles apart (on price) and it is likely to go to arbitration" Mr Capper said on Monday of CBH's attempt to negotiate an access agreement under the Railways (Access) Code 2000.
The code effectively takes price control away from Brookfield after Wednesday, June 24, when the current 90-day statutory negotiating period expires.
If no agreement is achieved by then, CBH has the option of asking code administrator, the Economic Regulation Authority (ERA), to appoint an arbitrator to determine access and a schedule of fees for the next 10 years.
The arbitrator must set fees somewhere within the $526 million-a-year gap between 'floor' and 'ceiling' prices already determined by the ERA.
CBH, which has been paying Brookfield between $1.8m and $4.5m a month in access fees, then has a choice of whether or not it accepts the arbitrator's fees schedule.
If it does, Brookfield has no alternative under the code, but to accept the fees and provide the requested line access.
Neither Brookfield nor CBH has negotiated an access agreement under the code before, so both could be entering uncharted waters going to arbitration.
Mr Larsen said last week he believed it was "in the best interests of both parties to put their energies towards achieving an agreement" to avoid going to an arbitrator.
The problem with going to an arbitrator was the "unknowns" – the time factor involved in getting a determination and the cost, Mr Larsen said.
This article first appeared on www.farmweekly.com.au
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