Open access (infrastructure)

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In the context of infrastructure, open access involves physical infrastructure such as railways and physical telecommunications network plant being made available to clients other than the owners, for a fee.

Infrastructure fundamental facilities and systems serving a country, city, or other area

Infrastructure is the fundamental facilities and systems serving a country, city, or other area, including the services and facilities necessary for its economy to function. Infrastructure is composed of public and private physical improvements such as roads, bridges, tunnels, water supply, sewers, electrical grids, and telecommunications. In general, it has also been defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions".

Contents

For example, private railways within a steel works are private and not available to outsiders. In the hypothetical case of the steelworks having a port or a railway to a distant mine, outsiders might want access to save having to incur a possibly large cost of building their own facility.

Marconi and radio communication

The Marconi Company was a pioneer of long distance radio communication, which was particularly useful for ships at sea. Marconi was very protective about its costly infrastructure and refused—except for emergencies—to allow other radio companies to share its infrastructure. Even if the message sender was royalty, as in the Deutschland incident of 1902, they continued to refuse access. Since radio communication was so new, it preceded laws, regulations and licences, which might otherwise imposed conditions to open infrastructure to other players.

The Marconi Company was a British telecommunications and engineering company that did business under that name from 1963 to 1987. It was derived from earlier variations in the name and incorporation, spanning a period from its inception in 1897 until 2006, during which time it underwent numerous changes, mergers and acquisitions. The company was founded by the Italian inventor Guglielmo Marconi and began as the Wireless Telegraph & Signal Company. The company was a pioneer of wireless long distance communication and mass media broadcasting, eventually becoming one of the UK's most successful manufacturing companies. In 1999, its defence manufacturing division, Marconi Electronic Systems, merged with British Aerospace to form BAE Systems. In 2006, extreme financial difficulties led to the collapse of the remaining company, with the bulk of the business acquired by the Swedish telecommunications company, Ericsson.

Pilbara railways

In the northwest of Western Australia, two large mining companies operate their own private railway networks to bring iron ore from mines to the port. In 1999 North Limited made an application to access Rio Tinto's Pilbara system, but Rio's takeover of North Limited meant that application was never fully tested. [1] In 2004 Fortescue Metals Group launched a bid to have the Mt Newman line owned by BHP Billiton "declared" for third party access. [1] The owner of the line claimed that they formed an integral part of the production process, and so should not be subject to completion requirements. When these mines started in the 1960s, state laws required the miners to make their infrastructure available to other players, but no application had been made. [2] In the same region, the Fortescue Metals Group railway has been set up for open access for a fee.

Western Australia State in Australia

Western Australia is a state occupying the entire western third of Australia. It is bounded by the Indian Ocean to the north and west, and the Southern Ocean to the south, the Northern Territory to the north-east, and South Australia to the south-east. Western Australia is Australia's largest state, with a total land area of 2,529,875 square kilometres, and the second-largest country subdivision in the world, surpassed only by Russia's Sakha Republic. The state has about 2.6 million inhabitants – around 11 percent of the national total – of whom the vast majority live in the south-west corner, 79 per cent of the population living in the Perth area, leaving the remainder of the state sparsely populated.

North Limited

North Limited was a diversified mining and resources company. Although based in Australia, its operations eventually extended to six continents. By the late 20th century the company had become the fourth largest iron ore exporter in the world with expansion underway which would have made it equal third. Its biggest asset was a majority stake in Robe River, a major miner of the Pilbara iron ore deposits of Western Australia and the worlds lowest cost producer of iron ore.

In June 2008 the Federal Government advisory body, the National Competition Council, recommended that BHP Billiton's Goldsworthy railway and Rio Tinto's Robe River and Hamersley lines should be declared open access. Treasurer Wayne Swan was given 60 days to make a final decision based on this recommendation. [3] On October 27 the three lines were 'declared' with open access to apply from November 20, 2008. This will apply for 20 years under the National Access Regime within the Trade Practices Act 1974. The declaration does not give a right of access, but provides a third party with recourse if access terms cannot be negotiated with the infrastructure owner. [4]

Wayne Swan Australian politician, 14th Deputy Prime Minister of Australia

Wayne Maxwell Swan is a former Australian politician who was the Deputy Prime Minister of Australia and Deputy Leader of the Labor Party from 2010 to 2013, and the Treasurer of Australia from 2007 to 2013.

Concerns

A player seeking access to infrastructure would expect to pay several fees of a capital and operating kind. Hopefully the cost of this is less than having to build separate infrastructure. It is in the public interest that access disputes be resolved in an efficient way, so that for example, profits are maximised and therefore income tax on those profits is also maximised.

The public interest is "the welfare or well-being of the general public" and society.

The potential for monopoly infrastructure to charge high fees and provide poor service has long been recognised. Monopolies are often inevitable because of high capital costs, with governments often imposing conditions, in exchange for approval of the project and for the granting of useful powers such as land resumption. Thus a canal might have its rates regulated, and be forbidden to operate canal boats on its own waters.

Monopoly Market structure with a single firm dominating the market

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly which consists of a few sellers dominating a market. Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit. The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices. Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry.

Eminent domain the power of a state or a national government to take private property for public use

Eminent domain, land acquisition, compulsory purchase, resumption, resumption/compulsory acquisition (Australia), or expropriation is the power of a state, provincial, or national government to take private property for public use. However, this power can be legislatively delegated by the state to municipalities, government subdivisions, or even to private persons or corporations, when they are authorized by the legislature to exercise the functions of public character.

Trackage rights

Where there are many separate railways and one railway wishes to run trains off their own tracks onto the tracks of another, they may seek trackage rights from the other railway(s). This can be done by voluntary agreement, or by compulsory order of a regulator. In time of flood and accident which puts a line out of order, compulsory trackage rights may be ordered in the public interest to keep traffic flowing, assuming that alternative routes exist.

Joint Venture

One of the problems faced by Open Access is what is a fair price. Consider the Iron Ore minnow BC Iron which seeks access to the Forstescue railway. (Fortescue has declared itself to be an open access operator).

BC Iron and Fortescue agreed to set up a joint venture to operate both the BCI mine and the railway connection to the port. As the larger player, Fortescue will run the show. The joint venture gives BC Iron inside information as to how much the railway and port will cost, while Fortescue gains inside information about the mine.

Geraldton

In 2010, Mt Gibson Mining will be spending $20m to upgrade the ore unloaded at Geraldton. The facility will be open to other users who will pay a toll for such usage. [5]

The Oakajee port and railway network is also to be open access.

Queensland

In 2011, GVK has offer to make its proposed railway from the Galilee Basin to Abbot Point as open access to other players. [6]

Telecommunications

In the telecommunications industry, open access to existing infrastructure, in the form of local loop unbundling, duct sharing, utility pole sharing, and fiber unbundling, is one proposed solution to the middle mile problem.

See also

Related Research Articles

Rail transport in Western Australia

The Railways in Western Australia were developed in the 19th century both by the Government of Western Australia and a number of private companies. Today passenger rail services are controlled by the Public Transport Authority through Transperth, which operates public transport in Perth, and Transwa, which operates country passenger services. Great Southern Rail operates the Indian Pacific.

Fortescue Metals Group company

Fortescue Metals Group Ltd is an Australian iron ore company. Fortescue is the fourth largest iron ore producer in the world after BHP Billiton, Rio Tinto, and Vale. The company has holdings of more than 87,000 km² in the Pilbara region of Western Australia, making it the largest tenement holder in the state, larger than both BHP Billiton and Rio Tinto.

Hamersley & Robe River railway

The Hamersley & Robe River railway, majority-owned by the Rio Tinto Group, and operated by its subsidiary Pilbara Iron, is a private rail network in the Pilbara region of Western Australia for the purpose of carrying iron ore. The network is larger than any other Australian heavy freight rail network in private ownership. The total length of its track is about 1,300 km (807.78 mi).

Goldsworthy railway

The Goldsworthy railway, owned and operated by BHP Billiton, is a private rail network in the Pilbara region of Western Australia built to carry iron ore. It is one of two railway lines the group operates in the Pilbara, the other being the Mount Newman railway.

Mount Newman railway

The Mount Newman railway, owned and operated by BHP Billiton, is a private rail network in the Pilbara region of Western Australia built to carry iron ore. It is one of two railway lines the group operates in the Pilbara, the other being the Goldsworthy railway.

Fortescue railway

The Fortescue Railway, owned and operated by Fortescue Metals Group (FMG), is a private rail network in the Pilbara region of Western Australia built to carry iron ore. It opened in 2008. When it was completed it was the heaviest haul railway in the world, designed for 40 tonnes axleloads, 2.5 to 5 tonnes heavier than the other Pilbara iron ore rail systems. On 4 November 2014, FMG Rail commenced trialling 42 tonnes axle loads.

Cloudbreak mine mine in Australia

The Cloudbreak mine is an iron ore mine located in the Pilbara region of Western Australia, 89 kilometres west-south-west of Nullagine, in the Chichester Range.

Yandicoogina mine mine in Australia

The Yandicoogina mine, often shortened to Yandi, is an iron ore mine located in the Pilbara region of Western Australia, 95 kilometres north-west of Newman. it should not be confused with BHP Billiton's Yandi mine, which is located nearby.

Hope Downs mine mine in Australia

The Hope Downs 4 mine is an iron ore mine located in the Pilbara region of Western Australia, 100 kilometres northwest of Newman.

Mount Whaleback mine mine

The Mount Whaleback mine is an iron ore mine located in the Pilbara region of Western Australia, 6 kilometres west of Newman.

Christmas Creek mine iron ore mine located in the Pilbara region of Western Australia

The Christmas Creek mine is an iron ore mine located in the Pilbara region of Western Australia, 61 kilometres south-south-west of Nullagine, in the Chichester Range.

Iron ore mining in Western Australia

Iron ore mining in Western Australia, in the financial year 2008-09, accounted for 47 percent of the total value of the state's resources, with a value of A$33.56 billion. The overall value of the mineral and petroleum industry in Western Australia was A$71.3 billion in 2008-09, a 19 percent increase compared to the previous financial year.

Area C mine mine in Australia

The Area C mine is an iron ore mine located in the Pilbara region of Western Australia, 92 kilometres west-north-west of Newman.

Jimblebar mine mine in Australia

The Jimblebar mine is an iron ore mine located in the Pilbara region of Western Australia, 41 kilometres east of Newman.

Pardoo mine mine in Australia

The Pardoo mine is an iron ore mine located in the Pilbara region of Western Australia, 75 kilometres east of Port Hedland.

Yarrie mine

The Yarrie mine is an iron ore mine located in the Pilbara region of Western Australia, 90 kilometres north-east of Marble Bar.

Yandi mine mine

The Yandi mine is an iron ore mine located in the Pilbara region of Western Australia, 90 kilometres north-west of Newman. It should not be confused with Rio Tinto's nearby Yandicoogina mine, which is also sometimes shortened to Yandi.

Orebodies 18, 23 and 25 mine mine in Australia

The Orebodies 18, 23 and 25 mine is an iron ore mine located in the Pilbara region of Western Australia, 8 kilometres east of Newman. The mine is majority-owned and operated by BHP, and is one of seven iron ore mines the company operates in the Pilbara. The company also operates two port facilities at Port Hedland, Nelson Point and Finucane Island, and over 1,000 kilometres of rail in the Pilbara.

Port of Port Hedland Major Australian seaport

Port Hedland is one of the largest iron ore loading ports in the world and the largest in Australia. In 2011 it had the largest bulk cargo throughput in Australia. With the neighboring ports of Port Walcott and Dampier, Port Hedland is one of three major iron ore exporting ports in the Pilbara region of Western Australia,

The Pilbara Railways are a collection of railways in the Pilbara region of North-West Western Australia.

References

  1. 1 2 Mark Drummond (June 16, 2004). "Fortescue tries to prise open access to Pilbara railway line". The Sydney Morning Herald. www.smh.com.au. Retrieved 2008-11-10.
  2. The Australian 11 June 2008, p31
  3. Chalpat Sonti (June 20, 2008). "Open Pilbara railways to Fortescue: NCC". The Age. business.theage.com.au. Retrieved 2008-11-10.
  4. "Pilbara open access from November 20". Railway Gazette. www.railwaygazette.com. 27 October 2008. Archived from the original on November 3, 2008. Retrieved 2008-11-10.
  5. "Archived copy" (PDF). Archived from the original (PDF) on 2010-10-11. Retrieved 2010-09-23.
  6. The Australian 21 September 2011 p39