WA's rail freight service up for sale to Queensland operator

14/02/06
The State Government is taking a keen interest in the re-sale of Western Australia's 'privatised' rail freight network to the government-owned Queensland Rail and Babcock & Brown Limited.
Planning and Infrastructure Minister Alannah MacTiernan said she could see some positives in the sale, but would examine the transaction in detail.
"We want a strong and competitive freight rail system for the benefit of WA business and certainly Queensland Rail has a good reputation," Ms MacTiernan said.
"There are also benefits in splitting track operations from the freight business, as this gives other rail freight operators more opportunity to compete."
Westrail's freight network was sold in 2000 to the Australian Railroad Group Pty Ltd (ARG) for $585million by the previous Coalition Government.
ARG is jointly owned by Wesfarmers and international rail operator Genesee & Wyoming.
Under the agreement to on-sell ARG, Babcock and Brown will operate the track and associated infrastructure in WA, which includes a 43-year lease on the rail network.
Queensland Rail will own and operate the rail haulage business.
Ms MacTiernan said it was ironic that just five years after the Coalition sold off Westrail at a loss because they believed Governments could not or should not run railways, WA would again have a Government-run freight rail service - just not by our government.
"We will want to satisfy ourselves that this sale is in the best interests of the State," she said.
The Minister said she would be seeking legal advice as to what say the WA Government had over the sale.
"We will investigate whether the legal documents drawn up under the Coalition Government to sell Westrail have potentially left Wesfarmers and their American partners free to on-sell the shares in ARG without any requirement to get the State Government's approval," she said.
Ms MacTiernan said the State of WA still had underlying ownership of the rail corridors, and WA taxpayers were still liable under guarantees over rolling stock, now part of the privatised freight business.
"These guarantees were given by the former Government as part of complex financing arrangements," she said.
"From our point of view, the privatisation has not been a great success - and this new structure and players may see a more vigorous approach to generating new markets."
Minister's office: 9213 6400