UPDATE: Asciano Applies To Have Queensland Coal Rail Track Access Declared
May 19 2010 - 1:19AM
Dow Jones News
Australia's largest port and rail operator Asciano Group
(AIO.AU) said Wednesday it has applied to have access to the rail
network in Australia's Queensland state brought under federal
control, a move that could delay a A$3 billion-plus initial public
offering of the state's coal and freight assets.
Asciano Chief Executive Mark Rowsthorn has been campaigning
against the state's model for privatization of Queensland Rail that
bundles together train and track ownership, saying it could lead to
discrimination against competitors using the system.
Asciano said it has applied to the National Competition Council
to have the use of Queensland's rail track assets declared under
the Trade Practices Act. If track access is declared, Asciano and
other freight companies would acquire a legal right to seek
arbitration from the Australian Competition and Consumer Commission
in relation to negotiations with the service provider about track
access.
"If track access is declared, it will create uncertainty not
just for the float, but for access pricing and it could take up to
12 months before a final outcome is known," said Rowsthorn.
"But this is preferable to a situation where we are forced to
negotiate access, without the regulatory protections we are
seeking, with a competitor who has every incentive to discriminate
against us," he said in a statement.
The state has in place its own access arrangements and plans a
range of regulatory changes to enhance the regime, for which it
intends to seek certification from the National Competition
Council.
"We don't expect these actions will have an impact on the
timetable for the QR National IPO scheduled for the fourth quarter
this year," Queensland Treasurer Andrew Fraser said in a
statement.
The state government in March appointed five banks--Credit
Suisse, Goldman Sachs JBWere, Merrill Lynch, RBS Morgans and
UBS--to lead manage the IPO that is expected to be Australia's
largest this year.
It is pushing on with its IPO plan despite coal producers
including mining heavyweights BHP Billiton Ltd. (BHP) and Rio Tinto
Ltd. (RTP) preparing an alternative bid for the state's coal rail
network.
The state government is offering the rail network, along with
its rail haulage business, in a vertically integrated package. This
has the coal producers concerned that there won't be adequate
investment in the rail network.
-By Rebecca Thurlow, Dow Jones Newswires; 61-2-8272-4679;
rebecca.thurlow@dowjones.com
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