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MEDIA MONITORS
Australian Financial Review
19-May-2010
Page: 3
General News
By: Mark Ludlow
Region: Australia
Circulation: 77470
Type: Australian National
Size: 344. 69 sq.cros
Frequency: MTWTFS
Asciano move may delay QR sale
tised QR would not make significant
investments in the state's crucial coal
The Bligh government's $3 billion export chain.
A consortium of 13 coal companies
float of Queensland Rail's coal and
are
planning to lodge their bid for
freight assets was dealt a blow late yesterday after rival Asciano Group ap- QR's coal tracks in the next month as
plied to have pricing and access to the an alternative to the float.
The Bligh government has vowed to
network put under federal control.
Asciano's bid to have QR's coal proceed with the float, whichwould be
tracks brought under the control of the the biggest deal of the year, but AsNational Competition Council could ciano's move to have QR's coal tracks
delay and complicate this year's "declared" could cast a cloud over the
offering.
planned public float.
If a legal challenge ensues, it could
If Asciano succeeds in having the
asset "declared", the existing regula- delay the float until early next year tory regime would become irrelevant one of the worst-case scenarios for the
and the Australian Competition and Bligh government.
It is understood Asciano has been
Consumer Commission would decide
negotiating with the Bligh government
disputes between Asciano and QR.
The challenge by Asciano - whose to ensure QR National did not disPacific National is the only major ri- criminate against other above-rail opval in the state's lucrative coal freight erators, but had become frustrated
market where it has a 15 per cent mar- with talks, leading to the application
ket share - is another obstacle to the to the National Competition Council
The move will be seen by many as
Bligh government's controversial paran attempted spoiler, and while it is
tial privatisation of QR.
Asciano and coal companies op- unlikely to stop the float, it could afpose the Bl igh government's vertically- fect the share price becau se there is no
integrated model for the QR sale, regulated pricing structure under the
which means they will have to deal federal system, unlike the state regime
with a private company that has a mo- controlled by the Queensland Compenopoly over the tracks and the trains. tition Authority.
They also complain that a privaQR's potential value in a public
float was expected to be based on the
regulated rate of return through pricing in the current draft access undertaking by the state authority.
Asciano has criticised the state regime, saying it was ineffective and
could get even worse once QR was privatised.
"Applying for declaration is a last
resort for Asciano," Asciano chief executive Mark Rowsthorn said last
month. "If we cannot get the regulatory protections we need we will be
better off with access to the tracks being declared."
He said regulatory obligations in
the state regime were "weak and open
to exploitation" by the track owner.
The government is waiting for a
state determination on access which
will allow it to lock in QR's revenue
streams ahead of the float.
$600mforestry sale, page 7 Is
• Asciano is trying to get QR's coal
tracks brought under the control of
the National Competition Council.
® While this is unlikely to stop the
float, it could affect the share price
as there is no regulated pricing
structure in the federal system.
Wrong track . .. coal companies say a privatised QR won ' t invest significantly in the export chain.
Ref: 70164828
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19/05/2010