BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 16, 1999--RailAmerica, Inc. (Nasdaq:RAIL), a world leader in the ownership and operation of short line and regional freight railroads, today announced that its Australian-based subsidiary, Freight Victoria, was awarded two major transportation contracts with its largest customer, the Australian Wheat Board. The new contracts, the result of a competitive bid tender process, call for the haulage of export and domestic grain by Freight Victoria from the agricultural-rich regions surrounding Melbourne for the next three to seven years. The Australian Wheat Board (AWB) is Australia's preeminent grain marketing organization.
The export contract, which calls for the movement of grain to the Ports of Melbourne, Geelong and Portland from the surrounding regions, is for a duration of five years, with a two-year extension option. The contract guarantees that a minimum of 90% of AWB's export traffic will move with Freight Victoria and, for the first time, includes the operation of freight trains in New South Wales. In addition, the five year term is unprecedented for the AWB in that it is the longest term contract entered into by AWB with any of its suppliers. The domestic contract with AWB is for three years, with a two-year extension option.
Commenting on the contracts, Gary O. Marino, Chairman, President & CEO of RailAmerica, said, "These new contracts, which are the result of six months of negotiations between Freight Victoria and the Wheat Board, are expected to solidify Freight Victoria's position as the leading freight railroad in the State of Victoria. These long-term agreements allow Freight Victoria to strengthen its competitive position in this important marketplace and provide an excellent platform for further development of new business in adjacent States."
In connection with the new contracts, Freight Victoria stated that it will offer new volume-based rebates in order to increase overall traffic. In addition, Freight Victoria has committed to a A$11 million (US$7.5 million) rolling stock upgrade program which will deliver additional cost savings through the life of the contract.
Added Marinus van Onselen, Chief Executive of Freight Victoria, "The significance of these contracts cannot be understated. In winning these contracts we have convinced the Australian Wheat Board that we are the organization best suited to work in tandem with them to maintain their competitive position in an increasingly deregulated Australian grain market."
RailAmerica, Inc. (www.railamerica.com) is a diversified international transportation company that owns or has equity interests in 25 short line and regional railroads operating more than 8,400 route miles in the United States, Australia, Canada and the Republic of Chile. RailAmerica announced on October 14, 1999 that it will acquire RailTex, Inc., creating the world's largest short line and regional railroad operator. RailTex, operating 26 railroads over approximately 4,100 route miles, is currently North America's leading operator of short line railroad company, with operations concentrated in the southeastern, midwestern and New England regions of the United States, as well as Eastern Canada and Mexico. RailAmerica also owns Kalyn/Siebert, L.P. and Kalyn/Siebert, Canada, Inc., specialty truck trailer manufacturers with production facilities in Gatesville, Texas and Trois-Rivieres, Quebec, Canada.
This press release contains forward-looking statements regarding future events and the future performance of RailAmerica that involve risks and uncertainties that could cause actual results to differ materially including, but not limited to, economic conditions, customer demand, increased competition in the relevant market, and others. We refer you to the documents that RailAmerica files from time to time with the Securities and Exchange Commission, such as the Company's Form 10-K, Form 10-Q and Form 8-K reports, which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release.
|Contact:||RailAmerica, Inc., Boca Raton|
|Wayne A. August, Director of Investor Relations|
Return to Railpage Online News