Big players bid on rail network

TOLL Holdings has emerged as a bidder for the Adelaide-Darwin railway in a joint approach with South Australian transport magnate Allan Scott.

A Toll spokesman has confirmed the company was involved in a bid with Scott’s group of companies to buy the rail corridor after owner FreightLink put itself on the market last month.

It is said 40 expressions of interest were lodged before indicative bids closed in June. Final bids close in September.

FreightLink has posted losses every year since opening the line in 2004 at a cost of $1.3billion.

The company received $560million from the federal, South Australian and Northern Territory governments for the rail link, with the Rann Government planning to ask for its $38million back from the sale’s proceeds.

The commonwealth’s assistance included a $164million Federation Fund grant, which it may not be able to recover.

More than 2.5 million tonnes of general freight (excluding minerals) has been carried on the line since January 2004, with close to 800,000 tonnes of general freight travelling in the 2007-08 financial year.

Vincent Tremaine, chairman of the South Australian Freight Council, said he was not surprised to hear of the Toll-Scott partnership as they were big users of the Adelaide-Darwin line.

“They might be controlling their own destiny to some degree,” he said.

“It’s starting to look a bit like a hotel on the Gold Coast – the third owner makes the money, the previous two don’t.”

FreightLink has secured three large minerals contracts, including an agreement to carry copper-gold concentrate for Oxiana from its Prominent Hill mine in South Australia to Darwin when mining operations begin later this year.

The anticipated growth of South Australia’s mining sector is expected to boost demand for the rail service.

This article was first published in The Australian on July 1, 2008.

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