Economic Regulation Authority (Railways Access Funding) Regulations 2019

Specific charge: A charge payable under regulation 5(2) when the ERA performs one of the listed functions in regulation 5(1). The amount equals the ERA’s directly attributable costs for that function, as itemised in regulation 5(6): consultant and contractor costs (including accommodation, travel and equipment), staff remuneration, photocopying, mailing, publishing and advertising, and costs of public consultation under the Railways (Access) Act 1998 or the Code. The owner receives a notice and must pay within 30 days (the “allowed period”). The owner may request an itemised account (regulation 5(7)).

Standing charge: A charge payable under regulation 6(1) by a railway owner who is the railway owner of a covered route at any time in a quarter. It recovers “core function costs” - ERA costs in performing functions under the Act and Code that cannot be recovered through specific charges (regulation 3(1)). The charge is calculated quarterly using one of two formulas. If all liable owners owned a covered route for the whole quarter, the amount for each is C/N, where C is core function costs for the quarter and N is the number of liable owners. If any owner owned a route for only part of the quarter, the amount for a given owner is (C × D) / T, where D is the number of days in the quarter that owner owned a covered route and T is the sum of days of ownership for all liable owners in that quarter. The ERA must assess and give a notice of assessment (regulation 7(1)), and payment is due within 30 days. The owner may request a written explanation of how core function costs were calculated (regulation 7(4)).

Covered route: Defined by reference to regulation 3(1) as “a route to which the Code applies”. This links the Regulations to the geographic and operational scope of the Railways (Access) Code 2000, which governs third-party access to rail infrastructure in Western Australia.

Railway owner: Not separately defined in the Regulations, but regulation 3(2) provides that a reference to a railway owner in relation to a quarter includes a person who was a railway owner at any time in that quarter. Regulation 3(3) states that terms given meaning in the Code have the same meaning in these Regulations. The Code likely defines “railway owner” as the owner or operator of rail infrastructure. The effect is that owners during any part of a quarter are captured for standing charge purposes.

Quarter: A three-month period ending 30 September, 31 December, 31 March or 30 June (regulation 3(1)).

Allowed period: For both charges, the 30-day period from the date of the notice, or that period as extended by the ERA under regulation 9 (regulation 3(1)).

Prescribed rate: The interest rate on overdue charges: 5 percentage points above the 1-month BBSW rate for the first day after the allowed period for which that rate is published, or if not published, a rate determined by the ERA having regard to comparable indices (regulation 3(1)).

Evidentiary certificate: Under regulation 8(3), a certificate signed by the ERA chairman specifying an unpaid amount, interest, and liable person, which is sufficient evidence of those matters in court proceedings without proof of the chairman’s appointment or signature.

The Regulations directly impose obligations on railway owners of covered routes in Western Australia. This class includes any person or entity that owns or operates railway infrastructure on a route to which the Railways (Access) Code 2000 applies - likely the major rail network owners such as Arc Infrastructure (the freight rail network in the South West Land Division), Aurizon (certain WA rail lines), and any other railway owners with routes declared under the Code. Because the definition of “railway owner” in relation to a quarter includes someone who was an owner at any time in that quarter (regulation 3(2)), even a short-term owner during a quarter faces a standing charge for that full quarter (calculated pro rata if not an owner the entire quarter). The Regulations also indirectly affect railway access seekers - third parties seeking access to covered routes - because the ERA’s costs in regulating access (e.g., arbitrations, access agreement approvals) are recovered from railway owners. Those owners may pass on these charges through access fees, though the Regulations do not mandate pass-through. The Economic Regulation Authority is affected as the charging body: it must perform the listed functions, calculate charges, issue notices, provide explanations, include charge details in its annual report (regulation 10), and conduct mandatory reviews of the recovery method (regulation 11). The ERA also bears the administrative cost of billing and collection. The Minister receives review reports (regulation 11(2)(a)). State taxpayers are indirectly affected because the Regulations reduce the burden on consolidated revenue by shifting ERA regulatory costs to specific industry participants. The Regulations do not directly affect end users, but to the extent that higher costs to railway owners lead to higher access charges, freight operators and ultimately consumers may bear some incidence. The compliance burden falls entirely on railway owners: they must track notices, pay within 30 days, potentially challenge charges (though no formal objection process is provided - only the ERA’s discretion to extend time), and engage with the ten-year review. The number of liable owners is likely small (perhaps fewer than ten), making the Regulations a concentrated-cost, concentrated-benefit scheme.

Duties of railway owners: pay specific charges when liable (regulation 5(2)), pay standing charges each quarter (regulation 6(1)), pay any interest on amounts not paid within the allowed period (regulations 5(8) and 7(3)), and pay the full amount demanded - the Regulations do not provide a right to dispute the amount before payment, only to request an itemised account (specific charge) or written explanation (standing charge). The duty to pay arises upon receipt of a notice; non-payment triggers interest and potential court recovery.

Rights of railway owners: request an itemised account of the costs covered by a specific charge (regulation 5(7)); request a written explanation of how core function costs were calculated for a standing charge (regulation 7(4)); and apply to the ERA for an extension of the 30-day payment period (regulation 9). The ERA may extend time if satisfied it is appropriate to do so - this is discretionary, not a right. Owners also have the right to challenge the charge in court if the ERA sues for recovery, though the evidentiary certificate (regulation 8(2)-(3)) reverses the evidentiary burden by making the certificate sufficient evidence of the amount, interest, and liability without proof of signature or appointment.

Duties of the ERA: give a notice specifying the amount and issue date for specific charges (regulation 5(3)); for standing charges, assess the charge and give a notice of assessment including the amount, core function costs used, and date (regulation 7(1)); upon request, provide an itemised account (regulation 5(7)) or written explanation (regulation 7(4)); include in its annual report the total specific and standing charges paid or payable by each railway owner (regulation 10); carry out reviews of the recovery method and give the Minister a report before 1 July 2029 and every ten years thereafter (regulation 11). The ERA also may extend payment time (regulation 9) and may recover unpaid amounts in court (regulation 8(1)).

The Regulations do not impose any duty on the ERA to consult on charges, to cap charges, or to consider the financial capacity of owners. The absence of a merits review or internal objection process means that a railway owner’s only practical recourse is to refuse payment and defend a debt recovery action, or to negotiate an extension of time if there is a dispute about the amount. The review under regulation 11 is of the recovery method generally, not of individual charges.

The primary enforcement mechanism is debt recovery in a court of competent jurisdiction (regulation 8(1)). The ERA may recover any charge, or part thereof, that remains unpaid after the allowed period, together with any accrued interest. There are no criminal penalties, infringement notices, or civil penalties beyond the debt itself. The interest regime (prescribed rate: BBSW plus 5 percentage points - regulation 3(1)) acts as a significant deterrent to late payment. For example, if BBSW is 4%, the prescribed rate is 9% per annum, calculated daily on the outstanding amount. Over a 90-day delay on a $100,000 charge, interest would be approximately $2,219, assuming simple daily calculation (the Regulations do not specify compounding). This rate is above typical commercial rates and reflects a policy of penalising late payment rather than compensating the ERA for the time value of money.

Regulation 8(2)-(3) creates a powerful evidentiary tool for the ERA: in recovery proceedings, a certificate signed by the ERA chairman that specifies the unpaid charge amount, interest, and the liable person is “sufficient evidence” of those matters, without requiring proof of the chairman’s appointment or signature authenticity. This shifts the evidentiary burden to the railway owner, who must adduce evidence to rebut the certificate. The ERA does not need to prove the underlying costs were actually incurred or were correctly attributed. This provision likely reduces litigation costs for the ERA and increases the pressure on owners to settle or pay. However, the certificate is only “sufficient evidence”, not conclusive evidence; an owner could challenge the factual basis of the charge (e.g., that the function was not performed, or that the costs were not directly attributable), but would bear the burden of proof.

The ERA also has discretion to extend the payment period under regulation 9 if satisfied it is appropriate to do so. This is not a penalty but an administrative safeguard - it may prevent interest from accruing during a genuine dispute. However, there is no obligation on the ERA to grant extensions, and the criteria for “appropriate” are not defined in the Regulations.

No specific penalty is imposed for failure to provide information or for providing false information, because the Regulations do not impose any obligation on owners to provide information - only to pay on receipt of a notice. The enforcement focus is entirely on payment.

These Regulations are made under the Economic Regulation Authority Act 2003 (WA) (the ERA Act). They do not amend or override any other Act. They operate in the context of the Railways (Access) Act 1998 (WA) and the Railways (Access) Code 2000 (the Code). The Regulations recover costs incurred by the ERA “in connection with the performance of its functions under the Railways (Access) Act 1998 and the Code” (regulation 3(1) definition of core function costs, and regulation 5(1) listing specific functions under the Code). The Code itself is a statutory instrument that governs third-party access to railway infrastructure. The Regulations do not alter any rights or obligations under the Code; they simply fund the ERA’s regulatory activities under it.

Financial reporting interaction: regulation 10 requires the ERA’s annual report under section 61 of the Financial Management Act 2006 (WA) to include aggregated charge data per railway owner. This ties the Regulations to public financial accountability requirements.

No interaction with other Australian cost recovery regimes (e.g., national access regimes) is mentioned. However, railway owners regulated under this regime may also be subject to other state or Commonwealth charges (e.g., rail safety levies or Australian Competition and Consumer Commission fees). The Regulations do not provide for any offset or credit for overlapping charges.

The definition of “railway owner” borrows from the Code (regulation 3(3): “If a term is given a meaning in the Code, it has the same meaning in these regulations”). This means amendments to the Code’s definition automatically flow through to the Regulations, unless the Regulations are separately amended. Similarly, “covered route” is defined by reference to the Code, so changes to the Code’s scope could expand or contract the class of liable owners without amending these Regulations.

The 2023 amendment (SL 2023/199) deleted regulation 5(1)(a) (which originally listed a function now removed). That amendment may have reflected a change in the ERA’s functions under the Act or Code. It does not affect the general interaction with other laws.

The Regulations do not interact with trade practices law, privacy law, or contract law directly, except that the ERA’s functions under the Code involve access agreements which are contracts. The cost recovery is independent of those contracts.

The Regulations were originally made on 3 May 2019 (published in the Gazette on that date). Regulations 1 and 2 commenced on that day; the substantive provisions commenced on 1 July 2019. The only subsequent amendment is the Economic Regulation Authority (Railways Access Funding) Amendment Regulations 2023 (SL 2023/199), published on 13 December 2023, with the amendments commencing on 19 December 2023 (by virtue of SL 2023/207 section 2(c)). The sole amendment was to regulation 5(1): the original subregulation (a) was deleted. The source text shows “(a) deleted” - the original function that was removed is not specified in the text we have. The amendment likely reflected a change in the ERA’s functions under the Railways (Access) Act 1998 or the Code, possibly the deletion of a function that no longer existed or was transferred elsewhere. No other regulations were amended. The compilation table indicates the Regulations have been amended only once. There is no known substantive amendment to the standing charge regime, the formulas, the interest rate, or the recovery provisions. The review requirement in regulation 11 has not yet triggered the first review (deadline 1 July 2029). The amendment history is minimal, suggesting the Regulations have operated without significant legislative disturbance for the first five years.

The source text of the Regulations contains no references to any litigation, court decisions, or tribunal rulings involving these Regulations. As a relatively recent statutory instrument (commenced 1 July 2019) that imposes modest financial obligations on a small number of railway owners, it is unsurprising that no reported litigation is noted. The absence of litigation does not prove there have been no disputes; it may indicate that disputes are resolved informally (e.g., through extension requests or negotiation) or that the amount at stake does not justify court action. The evidentiary certificate provision (regulation 8(2)-(3)) is designed to discourage litigation by making debt recovery straightforward for the ERA. If railway owners choose to resist payment, they would need to bring evidence to rebut the certificate. No cases interpreting “directly attributable”, “core function costs”, or the standing charge formulas were cited in the text. Litigation could potentially arise on questions such as: whether a particular ERA activity is a listed function; whether costs are “directly attributable” or fall within core function costs; whether the standing charge formula correctly applies when the number of liable owners changes mid-quarter; or whether the ERA’s discretion to extend time was exercised unreasonably. But to date, no such litigation appears in the record. The ten-year review process (regulation 11) may generate public submissions but is not a judicial process.

Several provisions contain traps for railway owners.

Interest rate (regulation 3(1) definition of “prescribed rate”): The rate is BBSW plus 5 percentage points. This is a floating rate that could spike if money markets tighten. Because interest is calculated daily (regulations 5(8) and 7(3)), an owner who delays payment even a few days may face disproportionate interest. The ERA also has a fallback power to set a rate if BBSW is not published (regulation 3(1)(b)), introducing further uncertainty.

Evidentiary certificate (regulation 8(2)-(3)): In any recovery action, a certificate signed by the ERA chairman is “sufficient evidence” of the amount owed, interest, and liability. This reverses the usual evidentiary burden. A railway owner cannot simply deny the debt; it must adduce positive evidence to dispute the ERA’s claim. The certificate does not require proof of the chairman’s signature or appointment. This creates a significant litigation disadvantage for the owner.

Broad definition of core function costs (regulation 3(1)): These are costs incurred by the ERA “in connection with the performance of its functions under the Railways (Access) Act 1998 and the Code” that “cannot be recovered through the imposition of specific charges”. The phrase “in connection with” is broad - it could include overheads, management time, and other indirect costs as long as they are not recoverable via specific charges. The ERA determines what qualifies, and the owner only gets a written explanation upon request (regulation 7(4)), not a right to dispute before trial. There is no cap on total core function costs.

Specific charge cost categories (regulation 5(6)): The list includes “remuneration of staff members” and “costs of consultants or contractors” - including accommodation, travel, and equipment costs. There is no requirement that these costs be reasonable or proportionate. An owner could be billed for expensive consultants engaged by the ERA without the owner’s consent.

Standing charge formula when partial ownership (regulation 6(3)): The formula uses days of ownership as numerator and total days of all owners as denominator. If the ERA’s core function costs are fixed for a quarter, an owner who owns a route for only one day in that quarter still owes a pro rata share based on that one day divided by total ownership days of all owners. The denominator T is the sum of days each owner owned a route in the quarter. If only two owners exist, one owning for 90 days and the other for 1 day, the one-day owner pays 1/91 of core function costs - a potentially large amount relative to the benefit received. There is no minimum threshold.

Extension of time (regulation 9): The ERA may extend the payment period if satisfied it is appropriate. However, the criteria are entirely discretionary and not defined. There is no right to an extension, and the ERA is not required to give reasons for refusing. An owner who misses the 30-day deadline cannot rely on this provision as of right.

No internal dispute resolution: The Regulations do not provide any mechanism for objecting to a charge before payment, other than requesting an itemised account or written explanation. An owner who believes a charge is excessive must either pay under protest and then seek a refund (no right to refund is conferred) or refuse to pay and defend a debt recovery action. This imposes a high cost on challenging charges.

Review only of method (regulation 11): The mandatory review is of “the method, in these regulations, of recovering the Authority’s costs”. It is not a review of individual charges, the quantum of costs, or the allocation among owners. Owners’ input into this review is not mandated by the Regulations; it is up to the ERA’s process.

Annual report disclosure (regulation 10): The ERA must publish total specific charges and standing charges paid or payable by each railway owner. This public disclosure of individual payments may reveal commercially sensitive information about an owner’s level of regulatory activity, particularly for specific charges related to access disputes or approvals.

A railway owner (as defined by reference to the Code) should take the following steps to comply with these Regulations:

1. Identify covered routes: Determine which routes the owner operates that are “covered routes” under the Railways (Access) Code 2000. Only routes to which the Code applies trigger liability. Keep a record of ownership periods for each route, especially changes during a quarter, because standing charges are calculated per day of ownership.

2. Monitor ERA notices: The ERA will issue notices for specific charges (regulation 5(3)) and standing charge assessment notices (regulation 7(1)). The owner should designate a responsible person to receive these notices and track payment deadlines. Notices are likely sent by post or email; the Regulations do not specify the method of service. The 30-day allowed period runs from the date of issuance stated on the notice.

3. Pay within 30 days: Both specific and standing charges are payable within 30 days of the notice date. Late payment triggers daily interest at BBSW plus 5 percentage points. The owner should set up a system to ensure payment is made promptly. If the owner disputes the amount, the better course is to pay under protest and seek an itemised account (specific charge) or written explanation (standing charge) while preserving rights, though the Regulations do not explicitly permit payment under protest. An alternative is to apply for an extension of time under regulation 9 before the deadline expires, stating reasons why an extension is appropriate. The ERA may grant it; if refused, the owner then pays or risks default.

4. Request information: For specific charges, request an itemised account under regulation 5(7). For standing charges, request a written explanation of how core function costs were calculated under regulation 7(4). These requests should be made promptly after receiving the notice, as they do not suspend the payment deadline unless the ERA grants an extension. The information obtained may help the owner decide whether to challenge the charge.

5. Keep records of ownership periods: For standing charges, the owner should maintain records of the days each covered route was owned in each quarter. This is necessary to verify the ERA’s calculation of D (days owned) and potentially to contest incorrect apportionment. If the owner owned a route for only part of the quarter, ensure the ERA uses the correct days figure.

6. Budget for charges: Standing charges are recurring quarterly obligations; specific charges are unpredictable but can be significant when the ERA performs functions under regulation 5(1) (e.g., arbitration, guideline approval). Owners should include these potential liabilities in financial planning. There is no cap on core function costs, so standing charges may vary quarter to quarter.

7. Engage with the review process: Under regulation 11, the ERA must review the recovery method and report to the Minister before 1 July 2029 and every ten years thereafter. Owners should consider making submissions to the ERA during that review, advocating for fairer allocation methods, caps on cost categories, or a more transparent dispute resolution mechanism. This is the only formal opportunity to influence the structure of the Regulations.

8. Respond to debt recovery proceedings: If the ERA sues for unpaid charges, the owner should be aware that an evidentiary certificate (regulation 8(2)-(3)) will be strong evidence against it. The owner must gather evidence to rebut the certificate - for example, proof that the function was not performed for that owner, that costs were not directly attributable, or that the charge was already paid. Legal advice should be sought promptly.

9. Coordinate with access agreement teams: Specific charges often arise from ERA involvement in access negotiations (section 21), arbitrations, or approvals of asset bases. The owner’s regulatory affairs or legal team should communicate with the billing department so that cost recovery notices are expected and not overlooked.

10. Monitor the public record: The ERA’s annual report will list each owner’s total specific and standing charges (regulation 10). Owners should verify these figures for accuracy and consider the commercial sensitivity of disclosure. If necessary, seek confidentiality protections under the ERA Act or other applicable laws, though the Regulations do not provide for redaction.