Tarcoola to Darwin rail infrastructure: Review of asset valuation methodologies for periodic revenue reviews
- Project Released: 7 Nov 2022
- Project Closes: 12 Aug 2024
- Contact: Mark Caputo
Overview
The Commission has reviewed and publicly consulted on potential asset valuation methodologies to be adopted in periodic reviews of the relevant revenues earned by the provider of rail infrastructure services between Tarcoola and Darwin.
Clause 50 of the AustralAsia Railway (Third Party Access) Code (Code) requires that the Commission review, in five-year intervals, below-rail freight revenues where no sustainable competitive prices exist. A key component of those periodic reviews of revenues is the value attributed to the rail infrastructure.
While there is neither a statutory requirement nor a statutory timeframe for a review of asset valuation methodologies, through this review of asset valuation methodologies the Commission has formed a view as to the valuation approach to be adopted in subsequent Clause 50 periodic reviews of revenues.
Status
Current status is Final
- Initiate
- Submissions
- Draft
- Submissions
- Final
Final
The Commission’s final finding is that a Depreciated Optimised Replacement Cost (DORC) asset valuation methodology will be applied for the purposes of subsequent Clause 50 periodic reviews of revenues, until there are compelling reasons for the Commission to consider that a DORC methodology is no longer appropriate to determine efficient costs.
A DORC asset valuation methodology is considered to be efficient, consistent with arbitration processes in the Code and regulatory practice in Australia, and practicable for the purposes of undertaking the maximum revenue assessment.
Alongside the application of a DORC value for subsequent Clause 50 reviews, the Commission also intends to present sensitivity analysis for the benefit of stakeholders and closely assess cost allocation matters.