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Aurizon chief Lance Hockridge not done shaking up rail giant
The threat of significant financial penalties would be enough to stop freight giant Pacific National misusing its market power were it to buy key rail assets from Aurizon, the company has told a court as it battles to get the deal past opposition from the competition watchdog.
The Australian Competition and Consumer launched action in July to block the $200 million sale sale of some of Aurizon's intermodal rail business to Pacific National, arguing it would damage competition in the sector.
Pacific National said the ACCC had misunderstood how the rail market operated. CREDIT:ROBERT ROUGH
The sale consisted of several components, including its crucial Acacia Ridge Terminal, south of Brisbane, which facilitates the movement of rail freight into and out of Queensland.
However on Friday, on the eve of the case beginning, the ACCC withdrew some of its more explosive allegations of collusive phone calls between key executives at the two companies.
Making opening remarks on Monday, Noel Hutley, SC, acting for Pacific National said the ACCC's analysis misrepresented the extent to which an operator of the assets could misuse its market power.
The operator could not know which of its customers relied on rail, and could therefore be gouged, and which had the alternative of using road transport, Mr Hutley said, with any loss of haulage being financially devastating.
He also said the ACCC also ignored the "prohibitive" threat of significant financial penalties if the operator was caught breaching competition laws.
“The incentives are nil," Mr Hutley said. "No person rationally will do anything other than be punctilious in being absolutely compliant.”
This article first appeared on www.smh.com.au
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