PERTH (miningweekly.com) – ASX-listed infrastructure company Asciano on Tuesday applied to the National Competition Council to have the use of the Queensland coal rail track assets declared under the Trade Practices Act.

The company said that this declaration was necessary to prevent a privatised Queensland Rail (QR) from engaging in anti-competitive behaviour by using its track monopoly for the benefit of its freight business.

“A privatised QR National, which owns both the freight business and the tracks on which it competes with businesses like Asciano, is intolerable as the existing regulatory structure does not have the necessary protection to deliver a level playing field,” said Asciano MD and CEO Mark Rowsthorn.

The Queensland government was looking to divest of QR's coal, freight and infrastructure servicing businesses by selling the assets as an integrated transport and logistics enterprise through an initial public offering (IPO).

The government is proposing to initially retain between 25% and 40% of the new QR. The remaining percentage of the new business would be offered for sale through an IPO.

The divested QR is expected to float on the ASX by the end of this year.

The State government would retain ownership of the passenger service business and assets, including ownership of the metropolitan rail networks, and retain regional freight networks and associated operations.

The Queensland Resources Council has previously expressed doubts over this system, saying that Queensland coal miners were concerned about the performance of the infrastructure under the structure proposed by the government, whereby a privatised QR National would both control the coal track network as well as operate a rail haulage business in competition with other haulage operators using that track.

Rowsthorn said that the current arrangements allowed the network part of the QR National business, QR Network, to structure contracts so that it was difficult for a coal miner to move away from using QR National for its coal haulage requirements.

“It puts at risk more than A$1,5-billion of potential investment from Asciano in Queensland,” he added.

He noted that if the track access was declared, Asciano and other freight companies would acquire a legal right to negotiate access to the track with the service provider, and seek arbitration from the Australian Competition and Consumer Commission.

“If track access is declared, it will create uncertainty not just for the float, but for access pricing and could take up to 12 months before a final outcome is known,” Rowsthorn said.

“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.”

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