Adani yet to contact regulators on rail-royalty deal

Research released today by The Australia Institute shows that preparations have not begun on parts of the Adani royalty deal, which is due for completion on Monday 30 September.

Key findings

  • The Adani royalty deal allows Adani to defer royalty payments and pay them back at discount interest rates.
  • Estimates for the value royalty-related subsidies to Adani range from $253 million to over $700 million.
  • In return, Adani must provide multi-user infrastructure. However, Australia Institute research shows the Queensland Competition Authority (QCA) has not yetbegun the process of working out conditions for other users to access Adani’s rail.
  • Under its legislation, the QCA needs an application to work on regulation arrangements. Adani and the Government have not made such a request according to the QCA.

“Queensland taxpayers are at risk of subsidising a privately-owned, unregulated monopoly asset,” said Rod Campbell, Research Director at The Australia Institute.

“Adani’s rail and royalty deal should not be signed by the Palaszczuk Government until arrangements are in place to ensure other users can access the rail line.

“The QCA needs to work with Adani and other potential users of the line to hammer out access agreements like in all Queensland’s rail lines and other significant infrastructure. Otherwise, there is no guarantee that Adani’s rail can be used by other parties and is therefore not eligible for the royalty deferment.

“Adani shouldn’t be treated differently to the rest of the coal rail network, run by Aurizon.

“While QCA regulatory processes can take months, this rail line will last for decades. This is a worthy investment of time to ensure Queensland taxpayers are not left short-changed subsidising a rail line that would ultimately be a foreign-owned, unregulated monopoly asset.

“The Queensland mining industry have long called for strong regulation of infrastructure, due to the high prices charged to mining companies for access.

“Subsidising coal mines as the world tackles climate change is bad enough. Subsidising coal mines and unregulated monopoly assets would be plain stupid.”

Related research

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