Australia’s competition regulator has cast major doubts over Aurizon’s plan to sell its Acacia Ridge intermodal terminal to Pacific National.
The Australian Competition and Consumer Commission on March 15 said it has “strong concerns” about the proposed sale of the Acacia Ridge terminal to Pacific National, given the ACCC’s view that Aurizon and Pacific National are currently the only providers of intermodal rail services in Queensland.
The ACCC acknowledged SCT Logistics provides interstate intermodal services, but said the company was vertically-integrated freight forwarder which generally doesn’t haul many containers for other freight forwarders.
“Aurizon’s decision to sell its Queensland intermodal operations and the Acacia Ridge Terminal to its closest competitor, while shutting down its remaining intermodal business, will fundamentally change this market,” ACCC chairman Rod Sims said.
“We are concerned about the impact on competition in the freight industry.”
Aurizon boss Andrew Harding last month said the company would be forced to close Acacia Ridge if it couldn’t sell it – a step which would also leave Pacific National as the only intermodal rail provider in the state.
Aurizon announced it planned to shut its Australian intermodal business last year.
Rod Sims says the competition watchdog is concerned over potential price rises that could take place in the Queensland market once Aurizon is not there to compete with PN.
Pacific National has offered to enter into a regulated undertaking as part of owning and operating Acacia Ridge, but Sims said this would not be good enough.
“The ACCC’s preliminary view is that a section 87B undertaking won’t resolve the concerns arising from the dominant provider of intermodal rail linehaul services nationally also owning the Acacia Ridge Terminal.”
Sims thinks another player should buy the terminal.
“The Acacia Ridge Terminal is an important infrastructure asset, and would be a key component in the strategy of any potential supplier of intermodal rail freight that wants to compete with Pacific National,” he said.