Government to introduce legislation to ensure, subject to final Cabinet approval, Westrail's freight business could be sold

8/12/98

Transport Minister Murray Criddle announced today that the Government would introduce legislation into State Parliament next year to ensure that, subject to final Cabinet approval, Westrail's freight business could be sold.

"We are seeking a purchaser who will work with the State, invest in the rail network, and grow the freight business for the benefit of all Western Australians," Mr Criddle said.

"Rail users in WA will reap the rewards of having an experienced Perth-based private sector owner-operator with the commercial freedoms and investment clout to build on and revolutionise the existing Westrail freight services.

"A private operator should be able to attract more of the freight task from road to rail.

"A non-Government operator will be able to achieve greater economies of scale by expanding the business locally and interstate and this will allow more aggressive marketing which should result in lower freight rates and more competitive exports."

Mr Criddle said legislation would give the Government the flexibility and specific powers to identify and package the rail assets to be sold or leased and provide a forum for wide-ranging debate.

"Legislation will provide a crystal clear legal framework and security for potential purchasers," he said.

Mr Criddle said the Government had directed the Rail Freight Sale Task Force to consult with the community and then recommend safeguards and conditions to protect the interests of farmers and other users.

"The Government is committed to retaining ownership of the land corridor on which the track network is laid," he said.

"The task force will make recommendations to Cabinet on which assets to sell, which to lease and which to retain.

"The time is right to move forward with a sale of the freight business because under the new Rail Access Legislation, Westrail will no longer enjoy a monopoly position.

"The task force will consult closely with existing users and will convene a reference group of key users at peak body level, comprising: the WA Farmers Federation, Pastoralists' and Graziers' Association, Chamber of Commerce and Industry, Chamber of Minerals and Energy and the chair of the Grains Logistics Committee."

Mr Criddle said consultation would be on-going and the task force would appoint people to provide advice and receive feedback from existing Westrail users.

He said there would be no track closures on the grain network beyond those identified and agreed under the current WA Grains Logistics Strategic Plan.

The Minister said the task force had appointed Deutsche Bank AG, Booz, Allen & Hamilton (Australia) Ltd, and KPMG as financial consultants to assist it with the sale process and the Crown Solicitor had appointed legal consultants Malleson Stephen Jaques.

The Minister said he was keen to see that Westrail's staff would not be disadvantaged in a sale and their interests were an important consideration for the task force.

Media contact: Doug Cunningham 9321 7333