Fourteen Queensland coal producers who have united to try and force the state government to modify its planned sale of Queensland Rail have met with little positive response.
The group argues that the government’s plan for a public float of the entire coal-haul operation - including above-rail and below-rail activities and assets - will result in a company with the ability to extract high service prices but with little incentive to invest.
Adapting an earlier BHP Billiton proposal, the group says it is prepared to buy the below-rail business outright, possibly in conjunction with the Australian Rail Track Corporation which would act as network manager. At the least, the group wants the state government to run a trade sale alongside the IPO and then decide which will provide the best outcome.
However, the government says the coal producers simply want to protect a system that has historically enjoyed taxpayer subsidies that have gone unrecouped. It also points out that the structure the miners are decrying is very similar to that operated by several in other guises, such as Western Australia’s iron ore industry.
Both sides have been arming themselves with heavyweight help: the industry has recruited former NSW premier Nick Greiner, who chaired the multi-party working group that eventually resolved the Hunter Valley Coal Logistics Chain’s issues, while the Queensland Government and QR have enlisted the help of former Australian Competition and Consumer Commission chairman Professor Alan Fels.
QR expects to get the A$3B IPO away in the last quarter of this year. Unions remain opposed to the privatisation, as does QR rival Asciano, whose Pacific National Coal subsidiary has successfully won haulage contracts in Queensland.
