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THE US owner of Victoria's rail freight operations is threatening to sue after the State Government offered it $2 for a track lease it paid $90 million for.
Rail America leased thousands of kilometres of track for 45 years in 1999 as part of its $163 million purchase of the financially troubled V/Line Freight Corporation.
In documents seen by the Herald Sun, the company says the Department of Infrastructure demanded it surrender its lease for $1 plus a $1 consideration payment if it sells its operation as planned.
Rail America said it would lose more than $80 million on the pending sale of Freight Australia, the successor to V/Line Freight Corporation.
The Australian Competition and Consumer Commission is expected to rule on the sale to Pacific National, a joint venture of transport giants Patricks and Toll Holdings, within days.
Rail America executive chairman William Pagonis told Premier Steve Bracks in April that the $2 surrender demand had caused "significant damage" to the sale price.
"Rail America intends to complete the sale of Freight Australia, exit the international markets and focus on our North America franchise," a copy of the April 30 letter seen by the Herald Sun says.
"Clearly, if we are prevented from doing so we must seek alternative remedies to protect our shareholders from the very substantial financial damage caused by the department's actions."
The letter says the company paid $89.7 million for the long-term track lease in 1999 and has since invested more than $130 million in the operation.
Transport Minister Peter Batchelor said selling or relinquishing the track to the Government was not a condition of the proposed sale.
But public transport director Peter Harris was required under the lease to consider the public interest before approving the sale.
"(He) is considering a number of public interest issues, including ensuring open access, co-operation with the Government and other operators on infrastructure projects and a strong commitment to delivering safety and maintenance," he said.
An April 30 letter to Mr Harris from Rail America says the initial suggested sale price of $375 million was reduced after government officials told prospective buyers of the state's intention to "seize control" of the track.
The letter also accuses the Government of releasing confidential information to prospective buyers.
"The state interfered with our proposed commercial transaction by linking any consent to a surrender of the lease for $2," the letter says.
Opposition Leader Robert Doyle said government meddling would again leave taxpayers with expensive legal bills.
"Freight Australia must not turn into another Seal Rocks," Mr Doyle said, referring to the
$46.8 million in government legal costs and payouts associated with the Seal Rocks Sea Life Centre last year.
Freight Australia declined to comment yesterday.
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