The ERA disagreed with the GGT proposal concerning the initial capital base, the rate of return and revenue levels. But the pipeline's 88% owner Australian Pipeline Trust (APA) said the ERA’s economic assumptions were incorrect.

“Our initial view is that while the ERA has increased the initial capital base by $20 million up to $500 million as at 31 December 1999, it does not appear to have adequately addressed the risks faced by GGT and this has flowed into the calculation of the permitted rate of return,” said APA chief executive officer-elect, Mick McCormack.

He argued the decision would reduce pipeline revenue by 15 to 20%.

“The ERA has also made incorrect assumptions about the proper calculation of revenue received since the commissioning of the pipeline,” McCormack said.

APA said it had several options at this stage including resubmitting the access arrangement or approaching the WA government under the State Agreement.

“We believe we will be able to demonstrate to the ERA that the GGT should be permitted to recover higher revenues than those indicated by the decision.

“The decision as it stands, will not affect revenues for this financial year. The impact on future revenues will depend on the final access arrangement to be approved by the ERA.”

GGT has until 14 June 2005 to respond to the decision.