Unity needed at the coalface

As a result, coal companies are often more interested in strategising than agreeing to what is best for the system as a whole. These dynamics are exacerbated by the absence of hard-and-fast rules for allocating the costs of different rail or port options and the unsophisticated contracting arrangements between the parties that have been shaped by history, not the commercial realities of a post-NCP, boom economy.

If the coal companies and governments really want optimal performance of the Queensland coal system they should be willing to re-constitute responsibilities and ownership arrangements.

One obvious option is to follow Toll Holding's lead by creating two separate services and infrastructure companies with mine-to-ship responsibilities. The existing stakeholders would jointly own relevant rail and port services and assets vended in two new organisations. A commercial relationship between the two would ensure an integrated approach. There could also be provisions allowing for the entry of new mines, thus avoiding a Pilbara-like fracas.

There are political positives from unlocking significant shareholder and community value. The rail network for the Bowen Basin could be separated out without material impact on the remaining Queensland rail system. The Beattie Government has consistently welcomed public-private company structures as a way of improving performance, while freeing up capital for social infrastructure. This structure would allow it to stay involved in infrastructure, while removing itself from the riskier logistics side of the business.

The right corporate structure should also allow a scaling back of regulation, consistent with the Federal Government's demands.

Re-arranging the Queensland coal system is something of a radical idea - though it shouldn't be. The market is moving towards a new business model that could improve the fortunes of all stakeholders if they could find the commitment to implement it.