[Vic] Freight Australia on fast track for SA

["James C." <james_ccj@optusnet.com.au>]

http://www.theage.com.au/business/2001/05/28/FFXEN00P7NC.html

Freight Australia on fast track for SA

By JOHN ROUW
Monday 28 May 2001

In its continuing stoush with the Victorian Government over the pricing of
third-party access to the state's freight rail system, network
lessor-operator Freight Australia has said it "may direct some of its
capital investment into South Australia as a result of ... that state's
pragmatic rail access regime".

Freight Australia chief executive Marinus van Onselen said in a media
statement that he "noted with regret - but no surprise" that the government
had confirmed in the recent state budget that it would press ahead with its
proposed access plans, "despite (Freight Australia's) strenuous objections".

Freight Australia said that, in its view, the South Australian Government
had - unlike Victoria - "acknowledged the need to create a climate necessary
for private-sector investment in its efforts to revitalise rail in that
state".

The company said South Australian Transport Minister Diana Laidlaw had told
the SA Parliament earlier this month that "tender documents for the
re-opening of lines in the south-east of the state provide for the
government to facilitate sole operation of the line by the operator".

Freight Australia quoted Ms Laidlaw as saying: "If we can provide this
undertaking of what is technically called `closed access' to the operator,
we are more likely to secure private-sector funding in the standardisation
of the line and, therefore, minimise state investment."

In budget releases this month, state Transport Minister Peter Batchelor said
declaring "open access" on the intrastate rail freight network from July 1
would "encourage greater competition and lower freight costs".

The government has maintained that "the Victorian Rail Access regime will
allow freight rail access seekers to negotiate access (to rail networks) at
a competitive price and in a reasonable time frame whilst ensuring an
appropriate return for the access provider" - invariably Freight Australia.

But Mr van Onselen last week continued his campaign of opposition to the
pricing principles behind the government's model, saying that "it is
unacceptable that the regime does not include provision for us to earn a
legitimate return on the investment we made in acquiring the loss-making
business (V/Line Freight) and relieving the government of considerable
unfunded liabilities and ongoing subsidies".

"We will be forced to allow competitors to operate over the network we lease
and maintain, at lower prices than we can," he said.