Freight Rail

Pacific National, Aurizon critical of ACCC appeal in Acacia Ridge case

Aurizon and Pacific National have criticised the competition watchdog’s decision to extend its “expensive and reputationally damaging” campaign against the agreed sale of the Acacia Ridge intermodal terminal in Queensland.

The Australian Competition and Consumer Commission (ACCC) on June 27 said it would appeal the Federal Court’s rejection of its case against Aurizon selling Acacia Ridge to Pacific National.

Aurizon and Pacific National have been trying to finalise the deal since August 2017, when they announced PN would team up with Linfox to acquire Acacia Ridge and Aurizon’s Queensland Intermodal above rail business.

Initial opposition from the ACCC led to a split in that sale, with Aurizon selling Queensland Intermodal to Linfox, and PN to acquire Acacia Ridge.

An unsatisfied ACCC pressed on, however, taking its challenge of the Acacia Ridge sale to the Federal Court in July last year.

At that time the ACCC not only challenged the sale on competition grounds, but went so far as to make the pernicious accusation that PN and Aurizon had conspired to limit competition in the Australian rail market with the deal.

The ACCC dropped this component of its case before the court’s ruling, but was still unsuccessful with its competition claims, with the Federal Court approving the sale on May 15. The Court told the ACCC the competition issues it had raised were resolved with an unconditional access undertaking presented to the court by Pacific National.

Now the ACCC has announced it will again try to block the sale with an appeal of that Federal Court decision.

“This court action by the ACCC has been an expensive and reputationally damaging exercise,” a PN spokesperson told Rail Express on June 27.

Pacific National believes the Federal Court judgement created a pro-competitive outcome for freight in Australia by guaranteeing access for new entrants to get freight from road to rail. It’s important to remember the undertakings we’ve committed to did not previously exist at Acacia Ridge Terminal and any assertion that we would somehow subtly work to discriminate against other users is simply wrong.”

Aurizon responded to the news of the ACCC’s appeal through an ASX statement.

“The ACCC is asserting they believe the Court made an error in accepting an access undertaking in relation to use of the terminal,” Aurizon said. “Aurizon does not accept this assertion and is of the view this matter was fully considered by the Federal Court and the decision handed down in May 2019 was clear and comprehensive.”

If the appeal is granted, Aurizon said the Acacia Ridge sale will have to wait until the case is finalised by the Full Bench of the Federal Court, a process which could take several months.

The ACCC said its appeal would focus on the court’s involvement in the access undertaking itself.

“Among other things, we will argue that the court made an error by accepting the undertaking, and then using it as a relevant fact when determining whether there was likely to be a substantial lessening of competition,” ACCC chairman Rod Sims said.

“This appeal is crucial to Australia’s merger regime because acceptance of undertakings of this kind by the Court means that anti-competitive mergers could be approved, and this has the potential to damage the Australian economy.”

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