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A key transport union has weighed into Brookfield Infrastructure's proposed takeover of Asciano, calling on the federal government to create a national rail access regime to tackle competition issues.
"Asciano is at risk of being ripped apart because the regulatory environment is not up to the job of allowing world-class vertically integrated businesses to develop," Rail,Tram and Bus Union national secretary Bob Nanva said in a letter to Infrastructure Minister Warren Truss.
The competition issues created by the combination of Brookfield's rail track business with Asciano's Pacific National rail haulage business could be addressed by "effective national regulation" with oversight by the Australian Competition and Consumer Commission (ACCC), Mr Nanva said in the letter obtained by The Australian Financial Review.
"The RTBU has long argued that rail access in Australia is a 'dog's breakfast' and the lack of national consistency may hold back the rail freight industry," he said. States currently regulate their own rail networks.
The union has also made a submission to the ACCC, which is reviewing proposals by Brookfield to sell Pacific National's intermodal freight business and guarantee the independent operation of its Dalrymple Bay Coal Terminal in Queensland. The ACCC is worried that a vertically-integrated company would abuse its market power.
The RTBU argues that Brookfield's proposals will "create more problems than they will solve," claiming they will reduce Pacific National's ability to compete with rival Aurizon, which operates rail tracks as well as owning a rail haulage business.
"The RTBU contends that the presence of Asciano in the rail freight industry benefits competition by providing a counterweight to the dominance of Aurizon," Mr Nanva said.
The Western Australian Farmers Federation's ACCC submission opposes Brookfield's proposals, arguing that the sale of Pacific National's intermodal freight business would not stop the company operating bulk haulage services in the future.
"With Brookfield's retention of rolling stock, they would not be prevented from providing freight services in the future," WAFarmers said. "The divestment of the intermodal fleet would also not prevent Brookfield from purchasing further vertically integrated assets in the future."
WAFarmers want Brookfield to sell its 5500 kilometre track network in WA if it acquires Asciano.
Asciano does not currently own any rolling stock or rail assets in Western Australia other than the intermodal freight business it has proposed to sell. Brookfield is expected to counter the farmers' claims by arguing that it could try and enter the rail haulage market in WA at any time, regardless of the proposed Asciano takeover.
This article first appeared on www.smh.com.au
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