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ACCC approves QR and Babcock bid for ARG

by admin last modified Feb 04, 2009 05:49 PM

by LLDCN 11:53AM, 31 Mar 2006

Queensland Rail and Babcock and Brown's acquisition of Australian Railroad Group was “unlikely to substantially lessen competition”, Australian Competition and Consumer Commission chairman Graham Samuel said in approving the move yesterday (Thursday, March 30).

The ACCC will not oppose ARG joint venture partners Genesee and Wyoming and Wesfarmers's proposal to sell its rail operations to QR National and sell the 43-year lease of the Western Australian track to Babcock and Brown, in a deal worth $1.3bn.

Mr Samuel said QR had never won a bulk rail freight tender in WA and ARG had never won one in Queensland.

“There is limited evidence that bulk freight customers directly play QR and ARG off against each other in the tender process, particularly in recent years,” he said.

“This suggests that, in practice, competition between ARG and QR is very limited and is likely to remain so in the future.”

Under the deal, Queensland Rail would own and operate ARG's above rail operations in WA, as well as a service in New South Wales and a Melbourne-Adelaide operation.

Babcock & Brown would own and operate ARG's below rail business – specifically track and infrastructure – in WA, which still has 43-years to go on a lease from the State Government.

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