RL1 insurance proceeds

Past review
Final report

In August 2011, DBCT Management sought approval to adjust the asset base and reference tariff to reflect the settlement of an insurance claim for a reclaimer that had collapsed in 2004.

In late 2006, DBCT Management completed a ‘short gain’ expansion of the terminal to increase capacity from 54.5 mtpa to 59 mtpa, which included a new machine to replace RL1.

At the time, we retained the value of the original reclaimer in the regulatory asset base and approved higher DBCT revenues and tariffs that included the costs associated with the replacement RL1, on the basis that an adjustment would subsequently occur once insurance payments were received. 

In September 2011, following a review of the prudency of DBCT Management’s claims and settlement processes, we approved DBCT Management’s application and adjusted DBCT revenues and tariffs accordingly.

This included a one-off payment from DBCT Management to terminal users to reflect previous overpayments.

The QCA has reviewed the DAAU and accepts that DBCT Management’s treatment of insurance proceeds is reasonable.

Given this, and that stakeholders did not make any submissions, on 29 September 2011, the QCA made a final decision to approve DBCT Management’s DAAU.

On 9 August 2011, DBCT Management submitted a DAAU to deduct a portion of the insurance settlement from the asset base and make a one-off payment to terminal users. 

On 12 August 2011, we published the DAAU and sought submissions from stakeholders by 8 September 2011.

In doing so, the QCA advised that, in the absence of stakeholder submissions, it may proceed directly to a final decision.