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THE competition regulator will for the first time reveal its reasons for allowing or rejecting a merger proposal next week when it rules on the acquisition of Victorian rail operator Freight Australia by Pacific National.
The Australian Competition and Consumer Commission has concluded its market inquiries on the deal, which would give Pacific National, a joint venture company owned by Patrick and Toll Holdings, a dominant position in rail freight across the eastern states.
The ACCC said yesterday it was finalising its analysis and would be in a position to announce a decision next week - after the May 31 deadline by which the joint venture partners had hoped to complete the $285 million purchase.
The decision will be the ACCC's first opportunity to exercise new informal clearance procedures outlined by chairman Graeme Samuel last week.
In order to improve transparency of the regulatory system, Mr Samuel has flagged the release of statements on the reasons for each merger decision, regardless of the outcome, as well as making public any anti-competition concerns it may have about a merger proposal.
The ACCC comments are expected to address concerns raised in the 12 submissions it had received from stakeholders, including privately owned logistics major Linfox and a coalition of rail terminal operators dubbing themselves the Victorian Intermodal Freight Group, both of whom have claimed the acquisition would give Pacific National too much market power.
Linfox group managing director of logistics Rex Comb said he was most concerned that Pacific National would control Freight Australia's key Dynon intermodal terminal in Melbourne, where freight could be moved straight from train to ship.
"Freight Australia is a very important asset in the inter-modal marketplace," he said.
"In the longer term, as you lock up strategic assets, it prevents people entering that marketplace."
Linfox has plans to build its own intermodal freight hub around its airport at Avalon, west of Melbourne.
The ACCC has discussed the effect of the deal with the Victorian Government, which could block it by refusing to transfer a lease over 5000km of Victoria's broad-gauge rail lines from Freight Australia's current owner Rail America to Pacific National.
Rail America still has 40 years to run on the lease, which it bought in 1999 when the government-owned V-Line freight business was privatised.
Victorian Premier Steve Bracks has expressed concern about the deal and has not ruled out the Government repurchasing the lease.
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