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AS entertaining as it is, the slugfest between Toll Holdings and Patrick Corporation will continue to be a rhetorical sideshow until Graeme Samuel has his say.
On Monday afternoon, the Australian Rail Track Corporation's third party submission on Toll's plans for Patrick lobbed into Samuel's in-tray. I understand it does not make pretty reading for Toll or, indeed, for its apparently doomed joint venture rail business, Pacific National.
ARTC boss David Marchant yesterday refused to discuss his submission. But I believe ARTC, while not setting itself against the Toll proposal, has raised serious concerns about the potential market dominance that would flow to Toll from a further concentration of rail freight ownership.
Marchant, who regulates access to all 5861km of Commonwealth and state owned rail track, is understood to have expressed particular concerns about the takeover's potential to deliver Toll dominance of Australia's big freight terminals and discomfort at Toll's commitment to create price transparency.
Some suggest ARTC may even have gone as far as to propose some form of Telstra-style structural separation of the PN business to create pricing visibility.
Of course, the way Patrick and Toll are going at it, they might beat the regulator to the punch and bust up the rail business themselves.
Rail freight terminals are a bit like airports. They are big, complex and expensive to duplicate, which is why there tends to be one main terminal in each of the states' capitals. And Pacific National owns the primary terminals everywhere but Queensland, where it is involved in expensive litigation with the Queensland Government over access to the Acacia Ridge terminal.
ARTC and others have been quietly concerned at the concentration of ownership of the terminals that arose from the creation of PN nearly four years ago. But, rail users drew comfort from PN's joint ownership by Toll and Patrick.
A merger of the two shareholders of PN would make Toll the major customer of the rail system and the sole owner and operator of the terminals through which the freight must pass.
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