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CBH says it’s ‘backed into a corner’ by Brookfield

WA grain dispute. Photo Oliver Probert / CBH / Ingram Publishing

CBH boss Andy Crane has accused operator Brookfield of “holding a state-owned asset to ransom” as the grain handler’s rolling stock was temporarily forced off the rails last week.

CBH and Brookfield are engaged in protracted negotiations over a long-term agreement for CBH’s wagons to run on the WA grain network, which Brookfield leases exclusively from the state government.

An interim agreement expired at midnight on Thursday, April 30, forcing CBH’s $175 million rail fleet off the network.

“Brookfield Rail is effectively holding a state-owned asset to ransom,” Crane said at the time. “This is unacceptable.”

Brookfield and CBH reached a new interim deal on Friday, May 1. The deal will last until December 31, 2015, or until the sides reach a long-term agreement.

But CBH is not happy, saying it was forced to take an unfair interim deal to avoid an extended shut-down.

“We were backed into a corner by multinational Brookfield Rail,” Crane argued on Friday.

“The agreement will see an increase to current rail access costs across the network.

“Given the peak shipping demand over the next few months, [CBH] had no option but to sign this agreement, to protect the international reputation of WA’s grains industry.”

CBH and Brookfield are midway through a 90-day negotiation process under the Railway Access Code.

Brookfield is reportedly asking for more money than CBH is willing to pay under a new, long term access agreement.

The rail operator welcomed the new interim agreement, but said its focus remained on reaching a long-term deal.

“[The interim deal] will provide supply chain and certainty for WA grain growers well into their next harvest and also allows us to concentrate on reaching a sustainable longer-term deal with CBH,” Brookfield chief executive Paul Larsen said.

“We remain hopeful that both parties will negotiate in good faith to agree a long term deal by the end of the [Code’s] June deadline.”

In a separate statement, Brookfield defended its long-term desire to earn more money from CBH, saying it is a matter of public record that it has not received sufficient revenue from CBH to cover the costs of operating the grain network, or to fund the capital expenditure required to maintain the lines.

But CBH is steadfast in its views that the rail operator is trying to take more than its fair share.

“We will keep battling to make that a long term reality for WA growers, so that they can use this state owned asset in a fair and reasonable manner,” Crane said.

“WA growers are already paying too much for rail access.

“A clear example of this is the fact that Eastern State’s counterparts pay significantly less than Western Australian rail access costs.

“We will continue to fight for a fair go for WA’s grain industry.”