The ACCC granted authorisation to applications from Newcastle Port Corporation and Donaldson to operate the system until December 31.

It accepted industry worries that, without a system for the allocation of capacity during 2008, the queue of ships waiting to be loaded will increase, giving rise to significant costs.

However, chairman Graeme Samuel said the ACCC remained concerned that continued operation of the CBS had the potential to impact upon investment in the coal chain and reduce incentives for industry to develop a long-term solution.

"The ACCC considers that this may ultimately result in several billion dollars of lost export revenue. For these reasons, the ACCC has significant doubts about whether the proposed system is likely to result in a net public benefit beyond December 2008."

In issuing its draft determination in February this year, the ACCC identified a number of underlying issues that were affecting the operation of the Hunter Valley Coal Chain.

These included the common user provisions of Port Waratah Coal Services’ Kooragang Lease, which appear to restrict its ability to enter into long-term binding contracts to underpin investment, and service providers contracting based on assessments of individual capacity without reference to the coal chain as a whole.

The ACCC said it also remained concerned that industry and governments had been slow in addressing these underlying issues.

"However, the ACCC is of the view that the proposed capacity balancing system is likely to result in a net public benefit till 31 December 2008,” Samuel said.

“In particular, the proposed system is likely to have the effect of minimising the vessel queue at the Port of Newcastle, which has the potential to save industry a significant amount in deadweight demurrage costs."