Aurizon Network Standard Access Agreement

We monitor compliance with Aurizon Network`s access obligation for 2017. The WACC represents the performance that Aurizon is allowed to earn between 2017 and 2027 on 2670 kilometres of the Queensland railway, called the Aurizon Network. Aurizon provides access to railways for miners who relocate coal from mines to ports. Aurizon Network may attempt to change its authorized access obligation at any time by submitting a proposed change to the access company (DAAU) to the CAQ Act. The Queensland Competition Authority said it would approve a revised “access obligation” introduced by Aurizon in May with slight changes – which will extend the life of 10 years and allow the rail group to increase its weighted average cost of capital (WACC) by up to 6.3%. Aurizon Network`s 2017 access requirement came into effect on February 21, 2019. The company is subject to an amendment by a proposed amendment to the Access Commitment Procedure (DAAU) under the CAQ Act. On September 17, 2020, we approved Aurizon Network`s revised standard rail connection contract. This agreement is now in effect and can be downloaded below.

The new agreement will require an independent expert to assess the capacity of Aurizon`s rail network and identify gaps. Below is Aurizon Network`s 2017 access requirement and relevant standard agreements approved by the CAQ. Aurizon Network`s standard rail link contract contains standard conditions for connecting private infrastructure to the Central Queensland Coal Network. The last access requirement for 2017 is based on the permissions listed below. John Manning, an analyst at Moody`s Investors Service, said the CAQ agreement was positive for Aurizon`s solvency, which offers a stable outlook, as it would stabilize the company`s cash flow and reduce regulatory risk. Aurizon Network is required to carry out a number of activities in accordance with its commitment, some of which require our approval (for example. B, annual approval of capital expenditures, adjustments to revenue caps and changes to benchmark rates). We also review Aurizon Network`s ad hoc requests for the authorization of issues that are required by the company. The expert will also check Aurizon`s services and prepare monthly performance reports. Aurizon will have to pay a discount to customers if its services do not meet the needs of minors.

In 2018 and 2019, Aurizon worked with clients in the coal industry to develop a new proposal that would provide more information on the definition of maintenance and investment budgets and the impact of miners on the use of money.