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It has so far gone largely unnoticed but, for almost nine months, the Bracks Government has been locked in a bitter and potentially disastrous battle with one of the state's most important transport operators.
It's a struggle that could cost taxpayers more than $100 million, and alienate foreign investors, without any improvement to the system. It also nicely illustrates the competing interests and motives surrounding the public transport sell-off.
Freight Australia is the American-owned company that bought Victoria's country rail freight system, V/Line, from the Kennett government in one of former treasurer Alan Stockdale's more hasty privatisation deals.
In April 1999, Freight Australia's owners, Rail America, paid $163 million for complete ownership of Victoria's country rail freight operations, including rolling stock and existing business.
At the time, V/Line was in serious disrepair, technically bankrupt and officially valued by the government at a mere $47 million. The system was so run down the Americans were clearly banking on potential improvements, and Stockdale must have thought he had unloaded a complete dud in the sale of the century.
But the big difference between this deal, and the sale of the suburban train and tram networks, was that the price included $89 million for the effective ownership of the tracks under a 45-year lease.
Hitherto, the Kennett government had been careful to retain ownership of the tracks as a state asset, allowing "competitors" to run their trains and trams "above track".
Neither Freight Australia, nor Stockdale, could have guessed that, just a few months after the deal was done and before final terms and conditions could be agreed, Victoria would elect a Labor Government.
From day one, relations between the Bracks administration and Freight Australia were bitterly hostile. The Government made no secret it thought the tracks should never have been "sold" and refused to allow the company to recover its lease costs when charging transport operators for access to the tracks.
The Government also blames the company for many of the delays to its much promised program of improvements. The so-called fast rail project remains a promise and the standardisation program has stalled completely.
But it was only when Freight Australia's parent company, Rail America, decided it had had enough and tried to sell its operations to Pacific National, a conglomerate of Patricks and Toll Holdings, that the real brawl began.
The first problem was the fear held by other transport operators, including Lindsay Fox, that the deal would create a huge monopoly giving Pacific National control of most of the freight tracks along Australia's east coast. That issue is about to be dealt with by the Australian Competition and Consumer Commission.
Far more tricky is the attempt by the Government to use the proposed sale as a chance to reclaim the track for nothing.
Under the original Stockdale deal, any sale of Freight Victoria requires government approval, and one of the conditions imposed by the Bracks Government is that the state can seize the track for a grand total of $2 ($1 purchase cost plus $1 administration fee).
Not surprisingly, Rail America is outraged. It claims the $2 buy-back condition forced Pacific National to lower its offer by $89 million, and says it now has no choice but to begin legal action.
Transport Minister Peter Batchelor says the $2 deal is designed to protect the interests of Victorian taxpayers; and some sections of government clearly hope Rail America will follow the lead of former tram and train operator National Express and simply walk away.
Judging by the noises coming out of Rail America's Florida headquarters on Friday, a walk-off is the last thing the Government can hope for. Far more likely, is a prolonged and expensive legal battle that could send an unfortunate message to those foreign investors Mr Bracks has spent the past fortnight wooing.
David Broadbent is Channel Nine's state politics reporter.
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