G&W eyes a sale of global operations to Brookfield

 
  bevans Site Admin

Location: Melbourne, Australia
GWA would do better marketing services across the entire network and not just the line to Darwin.  The case in point about the new traffic without a spur which could deliver fuel inbound.  Then again why isn't fuel a big commodity in the Darwin line to remove stations and sidings?  Or is it?

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  justapassenger Chief Commissioner

GWA would do better marketing services across the entire network and not just the line to Darwin.
bevans
Coordination of interlining with other operators like PN and SCT (mostly in Adelaide, but Spencer Junction could also be considered) would be a more suitable option for doing this than GWA making the massive investment needed to stand up their own intermodal services on other routes where they would be too small. They have a major advantage in that the likes of PN and SCT would be no more interested in running on the Adelaide-Darwin route than GWA would be in stepping on their turf.

For all we know, they already do cater for interlining and promote it within the industry via their contacts with freight forwarders.

Then again why isn't fuel a big commodity in the Darwin line to remove stations and sidings?  Or is it?
bevans
Petrol and diesel come to Darwin by sea, which is far more efficient for the task than rail. Natural gas has a pipeline.

Rail is already involved in carting petrol and diesel to Alice Springs. Natural gas has a pipeline.

Outside of those destinations there wouldn't be enough volume to make rail worth it. Remember that trains are only efficient when they are cruising along carrying a large volume of freight. Since they are not a charity, GWA would pass on all the costs of stopping a train to cut out a fuel wagon at a siding in the middle of nowhere – at which point the prospective customer will give up and renew their existing deal for road haulage.

The best way for GWA/Brookfield to play a bigger role in distributing diesel to the NT interior would be to diversify their use of the rail corridor and build a pipeline for diesel fuel alongside the track.
  bingley hall Minister for Railways

Location: Last train to Skaville

Outside of those destinations there wouldn't be enough volume to make rail worth it. Remember that trains are only efficient when they are cruising along carrying a large volume of freight.
justapassenger

Bowmans Rail, Linx and a few others thank you for your input Razz
  bingley hall Minister for Railways

Location: Last train to Skaville
Internal GWA memo sighted this morning stating that Brookfield will dispose of the 51% stake in GWA by the end of 2019 "due to regulatory considerations related to Brookfield's existing rail operations in Australia".

Personally I think they would have got it past the ACCC, but they had their fingers burnt when they tried to purchase the PN business from Asciano and probably didn't want to go down that path again.
  james.au Chief Commissioner

Location: Sydney, NSW
Internal GWA memo sighted this morning stating that Brookfield will dispose of the 51% stake in GWA by the end of 2019 "due to regulatory considerations related to Brookfield's existing rail operations in Australia".

Personally I think they would have got it past the ACCC, but they had their fingers burnt when they tried to purchase the PN business from Asciano and probably didn't want to go down that path again.
bingley hall
I agree - GWAs footprint doesn't overlap here all that much with other Brookfield operations - GWA SA/NT is pretty well self contained or on the DIRN, and the Hunter business is

Might the business be split (above and below)?   Id like to see open access under an ARTC style regime on the Darwin line to make it easier for other operators to access then line.

Could other operators (esp say PN) also have competition issues if it tries to buy the GWA SA/NT business on the whole?

Not sure who could be in the frame for the Hunter business now too.  PN and Aurizon were about to have an ACCC battle when it was up for sale the last time.

Watco might be one to watch....
  Sulla1 Chief Commissioner

Internal GWA memo sighted this morning stating that Brookfield will dispose of the 51% stake in GWA by the end of 2019 "due to regulatory considerations related to Brookfield's existing rail operations in Australia".

Personally I think they would have got it past the ACCC, but they had their fingers burnt when they tried to purchase the PN business from Asciano and probably didn't want to go down that path again.
bingley hall

Well, doesn't that throw up all sorts of dilemas for the Australian Rail Industry and the ACCC. PN may have been interested, but won't get past the ACCC; Aurizon might get past the ACCC, but probably won't be interested; Qube might be able to walk the tight-rope between its previous associations with Brookfield and the ACCC, but also, may not be interested. After that the choices might be limited to buyout by Macquarie or other investment funds, and/or a rebadged GWA floated on the ASX as a stand alone business.
  bevans Site Admin

Location: Melbourne, Australia

Then again why isn't fuel a big commodity in the Darwin line to remove stations and sidings?  Or is it?
Petrol and diesel come to Darwin by sea, which is far more efficient for the task than rail. Natural gas has a pipeline.

Rail is already involved in carting petrol and diesel to Alice Springs. Natural gas has a pipeline.

Outside of those destinations there wouldn't be enough volume to make rail worth it. Remember that trains are only efficient when they are cruising along carrying a large volume of freight. Since they are not a charity, GWA would pass on all the costs of stopping a train to cut out a fuel wagon at a siding in the middle of nowhere – at which point the prospective customer will give up and renew their existing deal for road haulage.

The best way for GWA/Brookfield to play a bigger role in distributing diesel to the NT interior would be to diversify their use of the rail corridor and build a pipeline for diesel fuel alongside the track.
justapassenger

Thanks for the response.  I was assuming fuel would come down from Darwin.  Is there a weekly fuel train?

GWA cut wagons off on the entire route between Alice and Darwin at major centres fuel could be added those trains.
  james.au Chief Commissioner

Location: Sydney, NSW
Internal GWA memo sighted this morning stating that Brookfield will dispose of the 51% stake in GWA by the end of 2019 "due to regulatory considerations related to Brookfield's existing rail operations in Australia".

Personally I think they would have got it past the ACCC, but they had their fingers burnt when they tried to purchase the PN business from Asciano and probably didn't want to go down that path again.

Well, doesn't that throw up all sorts of dilemas for the Australian Rail Industry and the ACCC. PN may have been interested, but won't get past the ACCC; Aurizon might get past the ACCC, but probably won't be interested; Qube might be able to walk the tight-rope between its previous associations with Brookfield and the ACCC, but also, may not be interested. After that the choices might be limited to buyout by Macquarie or other investment funds, and/or a rebadged GWA floated on the ASX as a stand alone business.
Sulla1
Any chance SCT might be interested in the above rail business?  At least the container service to Darwin, not so much the bulk services (which are a PN/QUBE shoe in).
  Jack Le Lievre Chief Train Controller

Location: Moolap Station, Vic

Is there a weekly fuel train?

GWA cut wagons off on the entire route between Alice and Darwin at major centres fuel could be added those trains.
bevans
No, AD1/DA2 are used to transfer Empty/Loaded Road Tankers. Empties to Darwin from Adelaide and Alice Springs, Loaded from Darwin to Tennant Creek and Alice Springs. The Loaded Tankers then work out of Tennant Creek and Alice Springs to various locations radiating out of both.
  Jack Le Lievre Chief Train Controller

Location: Moolap Station, Vic
Any chance SCT might be interested in the above rail business?  At least the container service to Darwin, not so much the bulk services (which are a PN/QUBE shoe in).
james.au
I would say that won't be able to find the capital.
  james.au Chief Commissioner

Location: Sydney, NSW
https://drive.google.com/open?id=1wlK_WXRdVgVQqZO2yxonlTIh4hjFbkm-
From Facebook

Looks like a buyer has been found "a whorl-class investor who is committed to the Australian business for the long run"

GWA sale to complete concurrently with the overall G&W transaction, later in 2019.
  james.au Chief Commissioner

Location: Sydney, NSW
Any chance SCT might be interested in the above rail business?  At least the container service to Darwin, not so much the bulk services (which are a PN/QUBE shoe in).
I would say that won't be able to find the capital.
Jack Le Lievre
Not for the whole thing no - but part of it maybe?
  jmt Deputy Commissioner

From the tone of Jack Hellmann's letter to employees, it is a "world class investor", so can any ideas re glorified mamma and poppa shows like the Smith Family's SCT purchasing the 51% of the Australian operation.

Brookfield will have been well compensated for the value of the G&W Darwin BOT buyout in the price it received, GWA paid $334 mil for Freightlink.
  bingley hall Minister for Railways

Location: Last train to Skaville
Any chance SCT might be interested in the above rail business?  At least the container service to Darwin, not so much the bulk services (which are a PN/QUBE shoe in).
I would say that won't be able to find the capital.
Not for the whole thing no - but part of it maybe?
james.au

Still the issue of track ownership to Darwin
  james.au Chief Commissioner

Location: Sydney, NSW
Any chance SCT might be interested in the above rail business?  At least the container service to Darwin, not so much the bulk services (which are a PN/QUBE shoe in).
I would say that won't be able to find the capital.
Not for the whole thing no - but part of it maybe?

Still the issue of track ownership to Darwin
bingley hall
In my ideal transaction ARTC takes that on and wraps it into the DIRN.  Considering they own the Tarcoola-Alice section its somewhat logical.
  bevans Site Admin

Location: Melbourne, Australia
Is the track to Darwin open access?
  Jack Le Lievre Chief Train Controller

Location: Moolap Station, Vic
Any chance SCT might be interested in the above rail business?  At least the container service to Darwin, not so much the bulk services (which are a PN/QUBE shoe in).
I would say that won't be able to find the capital.
Not for the whole thing no - but part of it maybe?

Still the issue of track ownership to Darwin
bingley hall
I am with James, Either ARTC or John Holland Rail. Although maybe not John Holland Rail, given who owns them.
  james.au Chief Commissioner

Location: Sydney, NSW
Is the track to Darwin open access?
bevans
Yes but no.

Open access if you're able to agree a price with GWA.  There are questions about whether the rates they are offering are the same rates that are being charged between the GWA below and above rail businesses.

So effectively no, there has been no real container competition to GWA on this line.

EDIT: As far as i can tell, it has only ever been Freightlink or GWA to operate on this line in any great magnitude (pax excluded).
  bevans Site Admin

Location: Melbourne, Australia
And this I believe is one of the problems with the network in the central of Australia.  There needs to be the ability for smaller or more aggressive operators to get access to network for service delivery.  The same could be said for the many lines GWA have which do not carry traffic.

If you want to grow the central australian business then you need competition against road on the rail network.  You also need a track owner who can build branch lines and industrial to service longer term projects in the way BHP/FMG/RIO etc do.  Rail would be even more competitive.
  bevans Site Admin

Location: Melbourne, Australia

Is there a weekly fuel train?

GWA cut wagons off on the entire route between Alice and Darwin at major centres fuel could be added those trains.No, AD1/DA2 are used to transfer Empty/Loaded Road Tankers. Empties to Darwin from Adelaide and Alice Springs, Loaded from Darwin to Tennant Creek and Alice Springs. The Loaded Tankers then work out of Tennant Creek and Alice Springs to various locations radiating out of both.
Jack Le Lievre

Hi jack so this would be a daily service?
  bingley hall Minister for Railways

Location: Last train to Skaville
Any chance SCT might be interested in the above rail business?  At least the container service to Darwin, not so much the bulk services (which are a PN/QUBE shoe in).
I would say that won't be able to find the capital.
Not for the whole thing no - but part of it maybe?

Still the issue of track ownership to Darwin
I am with James, Either ARTC or John Holland Rail. Although maybe not John Holland Rail, given who owns them.
Jack Le Lievre

OK - step outside fairyland for a moment and explain to us how that is going to happen?
  bingley hall Minister for Railways

Location: Last train to Skaville

Is there a weekly fuel train?

GWA cut wagons off on the entire route between Alice and Darwin at major centres fuel could be added those trains.No, AD1/DA2 are used to transfer Empty/Loaded Road Tankers. Empties to Darwin from Adelaide and Alice Springs, Loaded from Darwin to Tennant Creek and Alice Springs. The Loaded Tankers then work out of Tennant Creek and Alice Springs to various locations radiating out of both.
Hi jack so this would be a daily service?
bevans

Could this specific discussion be moved to its own thread in the NT forum perhaps - has little relevance to this thread.
  M636C Minister for Railways

I don't understand why all the gnashing of teeth over the Darwin service...

The "World Class Investor" probably wants the Hunter Valley Coal operation. That just has to be making money...

I don't think they will stop operating to Darwin, but it is hardly a major attraction...

Peter
  james.au Chief Commissioner

Location: Sydney, NSW
For me the interest in Darwin is because it is more complex an issue compared to the Hunter.
  Sulla1 Chief Commissioner

And this I believe is one of the problems with the network in the central of Australia.  There needs to be the ability for smaller or more aggressive operators to get access to network for service delivery.  The same could be said for the many lines GWA have which do not carry traffic.

If you want to grow the central australian business then you need competition against road on the rail network.  You also need a track owner who can build branch lines and industrial to service longer term projects in the way BHP/FMG/RIO etc do.  Rail would be even more competitive.
bevans

You've got to be careful with what exactly more operators will actually acheive.

The Northern Territory is not a large market, the economy is only one fifth of the size of North Queensland's and the NT population is the same as the Cairns regional population - at 244,000. In 2009 GWA had acheived 90% market share on the Adelaide to Darwin corridor, handling 800,000-tonnes of intermodal and 71,000-tonnes of bulk liquids, and doing so at ten to twenty percent less than the cost road. In 2017 tonnages were at 4.7-million tonnes.  

So additional operators will not be taking traffic off road, they'll be cutting into GWA's profit pie - which isn't huge, and all that for the sake of a perceived lack of competition. The Sturt Highway already represents competition for any disatisfied customers, and even more so, so does the Barkly/Landsborough/Warrego Corridor, which offers a far shorter transport route from the East Coast.

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