Sector:

Transport – Railways

Name of Agreement:

Access Holder Agreement for indicative Services in the Hunter Valley

Type of Agreement:

Track Access Agreement

Year of Agreement/ Draft:

2011

Principal Author(s):

ARTC

Annotated by:

Susanne Foerster, Consultant, LEGPS, World Bank

Purpose and Context:

The model contract was developed for a railway network that is predominantly used for rail haulage of export coal from mines to a port. It was developed in accordance with the railway regulations of the Australian State, which provide for an open access regime and passenger priority. The Access Holder Agreement and the Operator Sub-Agreement together comprise the basis on which ARTC grants access to the railway network.  

Circumstances where this contract may be appropriate:

Track access arrangements for railway tracks used for the transport of freight from production center to port.

Drafted for common law/ civil law jurisdiction:

Drafted for common law jurisdiction; can be adapted to civil law jurisdiction.

Main Features:

1. Concept: ARTC grants Access Holder right to access Network for the purpose of transporting coal (3.1). Access Holder may only access Network through Nominated Operator (4.2). Nominated Operator must have unconditional Operator Sub-Agreement with ARTC, which has been endorsed by Access Holder (4.3). Access Holder can be Operator provided it has Operator Sub-Agreement (4.1).  

Predominant usage of rail network is for rail services to the Hunter Valley coal market but non-coal users are also granted access. Priority of passenger services.

2. Contract period: Unspecified (2.1)

3. Access Right (3): Access Holder is granted non-exclusive (3.7) right to use Network for the transport of coal from port or discharge point to the load point and back (Train Path) as identified in the Train Path Schedule through Operator (3.1). Train Paths Schedule sets out the Train Paths and the number of Path Usages from a particular load point to be made available to the Access Holder (2.3). 

Access Holder’s entitlement to contracted Train Paths are subject to legislated passenger priority, emergencies, safety considerations, matters outside ARTC’s reasonable control, material failure of Operator’s trains, Network Management Principles, any lawful order, direction or requirement given by a Governmental Authority and Third Party Works (3.6).

4. Control and Management of Access to Infrastructure (8):ARTC to conduct Network Control and management of access to Network (8.1). ARTC to manage and operate Network in a non-discriminatory manner (8.3). ARTC to repair and maintain Network in condition so that Operator can provide the envisaged services (9).

5. Charges (5, Schedule 3): Access Holder pays charges for Coal Access Rights which are a combination of:

• Take or pay (TOP) Charge: Charge for the Access Rights contracted for under the Access Holder Agreement irrespective of whether the Access Holder uses all or any of the Access Rights;
• Non-TOP Charge: Charge based on the actual usage (being a function of distances and gross mass ($/gtkm) for a Pricing Zone);
• Ad Hoc Charge: For each Ad Hoc Path Usage.

6. Permanent Variation of Train Paths (11):

• Permanent variation of Train Paths possible upon consent by other party not to be withheld unreasonably. In cases specified in agreement consent cannot be withheld (11.1).
• ARTC may perform repairs, maintenance and upgrading of Network and close relevant parts of the Network to all traffic in order to carry out these works (11.2. (a)). If these actions are likely to affect a Train Paths, ARTC will try to minimize any disruption to the Train Path, notify Access Holder and relevant Operator and use best endeavors to provide alternative Train Path or Path Usage (9. 3 (b)). If relevant parts of the Network need to be closed for all traffic, ARTC to consult with Access Holder and relevant Operator a reasonable time before with a view to efficient planning and with a view to minimizing disruption to Services (11.2 (c)). 
• The same applies with regard to third party works on the Network, which affect a Train Paths (11.3). No liability of ARTC with regard to damages incurred by the Access Holder with regard to third party works (11.3 (c)).
• Under-utilized capacity may be withdrawn by ARTC (11.4).

7. Confidentiality Clause (15): Contract contains detailed confidentiality clause. Information provided by the access holder with regard to the forecast and actual volume of coal to be transported is confidential information. 

8. Assignment, Trading and Novation (16): ARTC may assign or novate agreement under specified circumstances (in particular to a successor of ARTC). Access Holder is deemed to have given consent to an assignment and novation of agreement under these circumstances. In all other cases ARTC may not assign or novate agreement without prior written consent not to be unreasonably withheld.

Access Holder may not license, assign, novate, sell, trade, sub-license or otherwise transfer the agreement, its interest in the subject matter of the agreement or any right under the agreement without the prior written consent of ARTC not to be withheld unreasonably. Temporary trade of Path Usages for period of less than 12 months possible without consent of ARTC and subject to conditions set out in agreement.

9. Force majeure (17): Contract contains provision on force majeure events.

10. Indemnities and Liability (13): Mutual release from liability with regard to Incidents and in favor of ARTC for range of events mainly relating to day to day use of Train Path by Operator unless event giving rise to liability is caused by fraudulent or Willful Misconduct or if particular Claim cannot be excluded/limited pursuant to legislation (13.1). Mutual exclusion of Consequential Loss (13.3). Mutual liability cap for all claims arising in or made during a Contract Year ($ 2 million in 2011 for first Contract Year). Not applicable for liability for fraudulent or Willful Misconduct (13.4).

11. Suspension and Termination (12): Right to suspend and eventually terminate the rights of the defaulting party in the event of breach of material contract obligations if default is not rectified within reasonable time (specified for different breaches in contract) and to the extent the breached obligation relates to the rights (12.1). Typical list of events that lead to right to immediate terminate the contract (12.2). Termination of agreement on termination or cessation of ARTC’s leasehold rights. Termination of Train Path Schedule if mine to which Train Path Schedule relates has permanently ceased operation (12.3).

12. Dispute Resolution (14): Agreement contains provisions for joint dispute resolution process in the case dispute also involves Operator. Disputes shall be resolved through negotiation and mediation (disputes over rebate: expert determination). If dispute is not resolved by mediation within one month of appointment of mediator, any party may commence proceedings in court

13. Governing Law (18.1): Law of New South Wales.

14. Jurisdicion (18.2): Exclusive jurisdiction of the Supreme Court of New South Wales.

15. Change in law (19.2): Changes in law materially affecting a parties’ rights under the agreement are excluded to the extent permitted by law. Parties to renegotiate agreement to the extent that change in law cannot be excluded and prevents a party from performing any of its obligations. Agreement also contains provision on changes to relevant access undertaking affecting agreement.

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