AusRAIL, Market Sectors

Rail business separation cuts little ice with Toll

<p>A group of Victorian freight terminal operators believes a form of subsidy for below rail business is a necessary part of guaranteeing competition in under a revamped rail access regime in Victoria.</p> <p>The Victorian Intermodal Freight Group has submitted a detailed response to the State Government’s consultation paper on the rail access regime.</p> <p>It calls for a separation of above and below rail business in Victoria to promote competition and better access.</p> <p>Submissions for the consultation closed yesterday (Tuesday, August 31), the same day that Freight Australia handed its rail business &#8211 including a 45-year regional track lease &#8211 to Pacific National.</p> <p>"We don’t see the below rail business can be profitable without some form of subsidy," group spokesman Colin Rees said.</p> <p>"In the end if the below rail business is not profitable then it will have no choice but to subvert competition or go broke.</p> <p>"Neither are desirable outcomes and the Epic pipeline case in WA produced the latter outcome."</p> <p>The group has called for the following eight changes to the access regime:</p> <p>&#8226 A regulator with robust and flexible powers</p> <p>&#8226 Separation of below and above rail businesses</p> <p>&#8226 A cap on access prices</p> <p>&#8226 Certainty on cost recovery for the below rail business</p> <p>&#8226 Up front access undertakings</p> <p>&#8226 Reserved and guaranteed access to train path and terminal capacity</p> <p>&#8226 A positive obligation to connect private sidings and terminals and </p> <p>&#8226 Set standards for track and maintenance.</p> <p>But in today’s (Wednesday, September 1 <em>) Australian Financial Review</em> Paul Little, managing director of Pacific National co-owner Toll Holdings, dismissed the idea of structural separation of the above and below rail businesses.</p> <p>Mr Little also called for further consolidation in Australia’s rail industry, suggesting a duopoly would be the most effective state for the industry.</p> <br />