Babcock & Brown Infrastructure > Assets > Transport Infrastructure

WestNet Rail

WestNet Rail is a rail infrastructure owner and rail access provider operating in Western Australia with a long term arrangement to lease track from the Western Australian government. Its track infrastructure serves as a crucial transport link in the region. BBI owns a 51% share of WestNet Rail, with a call option over the remaining 49%.

WestNet Rail is a regulated monopoly with largely stable revenue streams through long term access agreements with its customer base. The below-rail business revenue is derived from access charges paid by above rail operators or directly by underlying customers. Security of revenue is underpinned by:

rail transport being a small part of the overall production cost of the commodities transported;

the fact that resources customers typically seek long term contracts (like those already in place) to ensure adequate access to the supply chain;

the existence of some take-or-pay and flagfall arrangements; and

the critical nature of the grains and minerals industries to the West Australian economy overall, which ensures strong governmental support.

Description	A rail infrastructure owner and access provider
Asset Class	Transport Infrastructure
Location	Western Australia
BBI % ownership	51% (with call option over remaining 49%)
Regulatory Environment	Line segment regulation based on revenue ceilings; Gross Replacement Value calculation utilising a regulated WACC and efficient annual overhead and operating costs.
Customer Base	Access agreements with strong blue chip customers (including long term agreement with Queensland Rail)
Asset Age & Condition	Varies across line segments. Maintenance and renewal obligations are mandated by the lease with the WA Government and are being complied with
Utilisation	Varies across line segments. Ample spare capacity on lighter gauge lines, and ability to increase capacity to meet demand.
Key Drivers	WA economy (GSP) Global economic activity and commodity demand Mine expansion activities of current users, and addition of new users.

See the ASX Announcements, Presentations and Related Sites section of this website for more information on this asset