Productivity and efficiency variations. (a) Where the Access Holder or the Operator, during the term of this agreement, seeks a variation to this agreement to promote, or accommodate, a demonstrable efficiency or productivity improvement, Queensland Rail must reasonably consider those proposed variations and negotiate in respect of those variations in good faith.
(b) If, despite reasonable consideration, Queensland Rail rejects any variation proposed pursuant to clause 1.3(a), Queensland Rail must provide written reasons for not accepting any such variations in whole or in part.
Productivity and efficiency variations.
(a) Subject to the terms of this agreement and without prejudice to each Party’s rights in respect of this agreement:
(i) a Party, during the term of this agreement, may notify the other Parties of a proposed variation to this agreement to promote, or accommodate, a demonstrable efficiency or productivity improvement (Productivity Proposal); and
(ii) where a Party is notified of a Productivity Proposal, that Party must, in good faith:
(A) consider that Productivity Proposal having regard to any relevant factors including the costs, benefits and impacts of the Productivity Proposal on each of the Parties, on Train Services and on the operation and use of the Network, and whether the Productivity Proposal would result in a capacity increase for the Network, or efficiency improvements in one or more elements of the supply chain; and
(B) if requested by any Party, participate in discussions concerning the Productivity Proposal with a view to determining what (if any) amendments to this agreement the Parties are willing to agree.
(b) If, despite reasonable consideration, a Party declines to pursue all or part of a Productivity Proposal after complying with clause 1.3(a), that Party must provide written confirmation to the other Parties of its reasons for doing so.
(c) If the Parties in complying with clause 1.3(a) agree to make amendments to this agreement, the Parties must do all things reasonably necessary to give effect to those amendments in accordance with this agreement including under clause 27.4.
Productivity and efficiency variations. Subject to the terms of this agreement and without prejudice to each Party’s rights in respect of this agreement: a PartyWhere the Access Holder or the Operator, during the term of this agreement, may notify the other Parties of a proposedseeks a variation to this agreement to promote, or accommodate, a demonstrable efficiency or productivity improvement for the supply chain (Productivity Proposal);, and where a Party is notified of a Productivity Proposal, that Party must, in good faith: Queensland Rail must reasonably consider those proposed variations that Productivity Proposal having regard to any relevant factors including the costs, benefits and impacts of the Productivity Proposal on each of the Parties, on Train Services and on the operation and use of the Network by Access Seekers or Access Holders, and whether the Productivity Proposal would result in proposed variation creates a capacity increase , demand for capacity and any other realisable gains to all Parties.for the Network, or efficiency improvements in one or more elements of the supply chain; and if requested by any Party, participate in discussions concerning the Productivity Proposal with a view to determining what (if any) amendments to this agreement the Parties are willing to agree. If, despite reasonable consideration, a Party declines to pursue all or part of a Productivity Proposal after complying with Queensland Rail rejects
Productivity and efficiency variations. (Clause 1.3)
(a) it is well understood that one of the economic incentives that monopolists lack compared to suppliers in a competitive market, is the incentive to innovate; and
(b) the high coal supply chain costs for the West Moreton coal supply chain, requires innovation and productivity improvements to remain viable – with the existing users and haulage providers having made sustained efforts to find ways to produce greater efficiencies, but being dependent on QR's co-operation to implement the vast majority of supply chain efficiency improvements. This clause was included in the SAA during the AU1 process to encourage productivity improvements and infrastructure investments that rely upon QR's infrastructure, promoting the effective and efficient utilization of Queensland Rail’s below rail service, as well as promoting upstream and downstream competition and as such a narrowing of potential variations does not support the intent of the clause. It is highly inconsistent with the objective of Part 5 of the QCA Act, for a clause with such a clear purpose to be removed (particularly having been considered by the QCA to be appropriate just over 2 years ago). NHG is also concerned that QR's amendments would introduce further ambiguity by the inclusion of the ‘having regard to factors including’ wording, such that QR can have regard to other undefined factors in its consideration. QR has also removed the requirement to negotiate the variations in good faith. XXX considers that in order to realise potential productivity and efficiency improvements it is critical that good faith negotiations are undertaken by QR. This has a twofold benefit of both providing assurance to the access holder that QR has undertaken a bona fide consideration of the proposed variation and providing a platform where any misunderstanding of the proposed variation can be addressed. As noted above, NHG considers that any perceived uncertainty can be resolved or mitigated by providing a definition of good faith in the SAA (discussed at section 3.2 above).
