<p>Freight Australia has been put up for sale this morning (Friday, October 31), ending months of speculation about the Victorian-based operator’s future.</p> <p>Owner RailAmerica made the decision overnight in reporting its third quarter earnings for 2003.</p> <p>It said the Australian drought was behind Freight Australia’s US$2.2m operating loss for the third quarter, which has diluted earnings by US 6 cents a share, the company said.</p> <p>"We have made a strategic decision to divest our international operations and focus our efforts on North America," RailAmerica CEO Gary O Marino said.</p> <p>"We have several qualified buyers looking at Freight Australia and believe the timing is right to effect a sale of the company as the outlook for grain recovery in Australia for fiscal year 2004 is quite positive and a near record grain harvest is anticipated."</p> <p>Those prospective buyers have yet to come forward, but Pacific National, Queensland Rail and Australian Railroad Group have all been touted as serious contenders.</p> <p>Bidding is likely to be keen and analysts have speculated the sale could raise as much as $400m for RailAmerica.</p> <p>The sale represents a potential headache for the Victorian State Government, which was hoping to conclude its row with Freight Australia over track access fees and investment in the next six months.</p> <p>RailAmerica will be the second group to pull out of Victoria operations since rail privatisation, after National Express’s shock decision to dump its train and tram services in December 2002.</p> <p>National Express said it was unable to conclude what it believed was a satisfactory deal with the Victorian Government over its operations. </p> <p>Freight Australia owns 107 locomotives, 2,644 wagons and has a 45-year lease on the Victorian rural track network.</p> <p>It would represent an extremely significant purchase for Australia three remaining major rail operators.</p> <p>The transport industry and the Australian Competition and Consumer Commission, no doubt, will watch with interest. </p> <p>Neither Freight Australia nor the Victorian Government was able to comment on the sale, at the time of going to press.</p> <br />
