Responding to the ACCC decision on the Central West Pipeline in NSW today, Mr Jim
McDonald, Chief Executive of the Australian Pipeline Trust said, "We are disappointed that the regulator has failed to adequately recognise the difference between the risks of greenfield investments and the risks of investments to serve mature capital cities markets.
 
A weighted average cost of capital of 7.8% pre-tax real may be satisfactory for a pipeline serving a mature market with known and reliable volume projections, but is simply not high enough to encourage investment in new projects, where there is no level of certainty on costs or market projections. It is becoming increasingly difficult to continue to justify new projects on these levels of regulated returns."
 
"In future the Trust will not be able to justify proceeding with greenfields investments, including the extension of the Central West pipeline to Tamworth, unless it has prior agreement with the regulator on returns. New projects must deliver acceptable profits to our shareholders as well as delivering satisfactory pricing outcomes for the community.
 
"We will discuss this issue in detail with the ACCC over the coming weeks and believe that a solution which would satisfy all parties is achievable."