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Watco wins CBH grain rail contract

by Rail Express last modified Dec 15, 2010 11:40 AM
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Western Australia’s bulk grain handler CBH announced on Tuesday that it has awarded the tender for its long-term grain rail contract for the first time to American company, Watco.

Watco would operate and maintain $175m worth of rolling stock to be acquired by CBH including locomotives and a fleet of wagons to be delivered over the next 18 months.

The agreement would commence in May 2012 and would see Watco provide a comprehensive rail logistics planning service including train planning and scheduling, tracking, maintenance, inventory control and crew management.

CBH chief executive Dr Andrew Crane said Watco had been chosen as the company’s long-term partner following a year-long tender process which had drawn competitive interest from rail companies locally and around the world.

The Australian Railroad Group (ARG), which currently owns and operates the rolling stock used to transport grain in WA, reportedly reapplied for the tender but lost.

CBH’s announcement comes just a couple of days after the Australian Competition and Consumer Commission (ACCC) warned the company of anticompetitive behaviour in WA’s grain transport sector (see Rail Express report).

CBH chief executive Dr Andrew Crane said the company’s decision to go to tender with its rail transportation would see competition introduced for the first time in WA’s grain rail freight market.

“We welcome Watco to WA and have great confidence that their experience and innovative and performance-driven culture will enable us to implement the most efficient grain logistics supply chain for WA growers and their customers and help us to keep the maximum amount of grain on rail,” he said.

Dr Crane said the existing interim agreement with ARG was due to run out in April 2012 and CBH looked forward to working with ARG to ensure a smooth transition to the new arrangements “for the benefit of both companies and the grain industry”.

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