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Two days ago David Marchant was one of the men Toll Holdings wanted to run Pacific National. In his submissions to the Australian Competition and Consumer Commission on Toll's plan to buy Patrick, Marchant lets us know exactly why he would not have taken the job.
Marchant runs the Australian Rail Track Corporation (ARTC) which means, effectively, he owns and manages commonwealth and state government rail tracks.
One of Marchant's biggest customers is Pacific National, the troubled $2.8 billion Toll-Patrick joint venture that controls about 75 per cent of Australian rail freight.
Marchant's ACCC offering makes it clear he doesn't think much of the way PN does business. Nor does he seem to think Toll's offer for Patrick should proceed without what would appear to be terminal concessions to the competition regulator.
Before making a series of recommendations that would scuttle Toll's bid, ARTC all but accuses PN of abusing its market power on the east-west rail corridor and raised fears that, should the rail company fall under the sole control of Toll, there was every chance of a repeat performance on the north-south link.
"ARTC has noted a significant decline in the reliability of PN's east-west services over the past few years, as well as real price increase for many services. ARTC would not consider such behaviour to be consistent with that of an entity operating in a contestable market."
The specific PN complaint becomes a platform for assessing the potential of the broader Toll-Patrick merger, focusing on the rail freight forwarding business in particular.
The pin-pointing of freight forwarding is significant because it is widely held that the ACCC is most concerned about that sector of the national freight business and the market power created by the complete vertical integration that would be the product of Toll chief Paul Little's bid.
"Essentially, Toll will become a freight forwarder that is vertically integrated into the rail transport sector through full control of a rail operator with market power. In a number of rail markets PN exhibits close to monopoly characteristics," the submission notes.
"Whilst both Toll and Patrick operate at most levels of the supply chain, their focus on different aspects and markets would currently lead to a genuine competitive tension in their joint control of PN. The transaction would eliminate that tension, further aligning the activities of PN with those of Toll.
"PN's dominance and power in many parts of the freight transport sector means this transaction will create opportunities for Toll to utilise that power, without interference, to maximise its commercial position in freight transport markets, as well as other parts of the transport logistics network. PN's market power could be used by Toll to constrain competition, increase profitability through increased pricing and reduction of service levels in the rail freight market.
"Toll could also use PN's market power (through pricing and servicing levels, or access to key strategic facilities) to constrain competition in other parts of the transport logistic network by withholding access to rail transport or discriminatory treatment of rail services."
And, finally, before calling for an asset blood-letting, Marchant takes aim at the undertakings Toll has so far made to the ACCC.
Toll has committed not to discriminate in favour of its own businesses, to prevent cross-subsidy between the rail and other parts of its freight business, to publish its pricing and produce a range of business performance measures.
ARTC concludes, simply, that, historically, undertakings and the enforcement of access regimes have failed in the face of vertical integration. Placing the assets in the hands of third parties is the best answer, it says.
Which all makes it astounding that Marchant was seriously floated as one of the men who could replace Stephen O'Donnell, the PN boss who last week announced his intention to retire hurt after a mauling by the Toll and PN director, Mark Rowsthorn.
Of course, Toll's nomination was a product of bad timing as much as anything else. It seems Marchant was formally listed for board consideration before a copy of his potentially lethal submission was delivered to Toll.
Even so, you would have thought a company making a $4 billion-plus pitch for control of the Australian freight business would take some soundings from a man like Marchant.
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