Sale of Westrail Freight drawing near

PRIVATISATION of Westrail’s freight arm is close to reality.

Legislation allowing the sale of Westrail Freight has rolled through Parliament, clearing the way for the sale to proceed without delay.

The WA Government is confident the new owner will be known by the end of the year.

It has received a number of expressions of interest from potential bidders worldwide.

A web-based brochure advises potential bidders that Westrail Freight brought in total revenues of $258 million in 1998-99.

Potential buyers will not only secure Westrail Freight’s rolling stock, terminals and maintenance facilities.

They will also be given current business including existing customer contracts and a long-term lease over the land corridor and railway infrastructure including 5,000 kilometres of track.

No cash, borrowings or debts are included in the sale.

The brochure says there are also opportunities for the purchaser to grow the WA business into the interstate rail freight market.

Westrail Freight carried about 29 million tonnes of cargo in 1998-99. Interstate operators using its rail network carried a further three million tonnes.

The total revenue gleaned from cargo carriage totalled $246 million.

However, any potential buyer of Westrail will have to satisfy certain conditions.

The purchaser will have to set up two subsidiaries – a track manager and a train operator.

The track management company will take over the lease of the

standard gauge track that runs from Kwinana to Kalgoorlie and Leonora to Esperance.

That company can also take on the lease of Westrail’s narrow gauge network but cannot operate trains.

The train services company will operate trains and can also take a lease on the narrow gauge track.

Transport Minister Murray Criddle said the tender process would find an “innovative rail operator with the financial strength and genuine willingness to grow the freight business and introduce new ideas and services”.

However, WA’s grain growers are not so sure the privatisation will be in their interests.

WA Farmers Federation general president Colin Nicholl said farmers would be swapping a publicly-owned monopoly for a private one.

“We see a privately-owned monopoly as worse than the

publicly-owned one,” Mr Nicholl said.

The majority of WA’s grain growers are serviced by narrow gauge train services.

“I can’t see rail-on-rail competition on narrow gauge lines,” Mr Nicholl said.

“If the Government had approached farmers 10 or 12 years ago with a privatisation plan, they would have jumped at it.

“However, now we’ve built up the grain handling side of Westrail up to be one of the best in the world.

“We, as farmers, are now funding the fast loading facilities that have been put in place.

“When the program is completed, we’ll have 37 of these facilities that have the capability to drop 2,000 tonnes of grain onto a train in 90 minutes.”

Mr Nicholl said the Government told farmers they would be getting better service and cheaper freight rates from a private operator.

“When we put it to the test, the Government wouldn’t guarantee it,” he said.


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