WestNet Rail
WestNet Rail is a rail infrastructure owner and rail access provider operating in Western Australia (WA) with a long term arrangement to lease track from the WA Government. WestNet Rail operates approximately 5,100 kilometres standard, narrow and dual gauge network in the south-west of WA which serves as a crucual transport link in the region.
WestNet Rail is a regulated monopoly with largely stable revenue streams through long term access agreements with its customer base. The below-rail business revenue is derived from access charges paid by above rail operators or directly by underlying customers. Security of revenue is underpinned by:
- rail transport being a small part of the overall production cost of the commodities transported;
- the fact that resources customers typically seek long term contracts (like those already in place) to ensure adequate access to the supply chain;
- the existence of some take-or-pay and flagfall arrangements; and
- the critical nature of the minerals and grains industries to the WA economy overall, which ensures strong governmental support.
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Description |
A rail infrastructure owner and access provider |
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Asset Class |
Transport Infrastructure |
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Location |
Western Australia |
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BBI % ownership |
Currently 76% (with call option over remaining 24%). |
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Regulatory Environment |
WestNet Rail is regulated by the WA Economic Regulation Authority. Regulation is based on revenue floors and ceilings for line segments. The next floor and ceiling review is due in JUne 2010. |
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Customer Base |
Access agreements with strong blue chip customers (including long term agreement with Queensland Rail) |
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Asset Age & Condition |
Varies across line segments.
Maintenance and renewal obligations are mandated by the lease with the WA Government and are being complied with. |
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Utilisation |
Varies across line segments. Ample spare capacity on lighter gauge lines, and ability to increase capacity to meet demand. |
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Key Drivers |
WA economy, global economic activity and commodity demand.
Mine expansion activities of current users, and addition of new users. | |
See the ASX Announcements, Presentations and Related Sites section of this website for more information on this asset.