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Competition watchdog boss Rod Sims will not back down in his fight to challenge the sale of a key Queensland rail freight terminal saying the deal, between Pacific National and ASX-listed rail freight operator Aurizon, warrants a second look at the High Court.
"We think this is going to tell us a lot about the effectiveness of our merger regime, which is really important to the Australian economy because without competition the market economy really doesn't work. So we've really got to make sure that our merger rules can do the job," Mr Sims said.
The long-running case centres on a $205 million deal struck about three years ago between ASX-listed rail freight operator Aurizon and rail freight business Pacific National. The Australian Competition and Consumer Commission opposed the deal, arguing it would damage competition in the sector.
Under the agreement Pacific National agreed to buy the Acacia Ridge intermodal terminal in south-east Queensland from Aurizon. Freight is transferred between Queensland's narrow gauge rail network and NSW's standard gauge at the terminal, and is also moved on and off trucks.
The ACCC launched legal action in the Federal Court two years ago seeking to block the deal but was unsuccessful, prompting it to seek leave to appeal to the High Court on Friday.
"PN (Pacific National) is a near monopoly on the north-south east coast route ... and they've been allowed to buy the stand-out bottleneck infrastructure on the route," Mr Sims said.
"They will remain a dominant near-monopolist and that's bad for the rail freight industry. That means companies are going to face higher prices for rail freight, that worries us a lot and in a country like Australia rail freight is really important," he said.
"This is the first time our merger laws have gone to the High Court, we feel it's important that the High Court gives us a view on how our merger laws deal with a dominant player getting hold of a bottleneck asset, and that whole question of damage to the competitive process," he said.
A Pacific National spokesperson said the company was disappointed by the ACCC's move.
"The Federal Court of Australia twice confirmed that Pacific National's acquisition of Aurizon's Acacia Ridge Terminal could proceed.
"Pacific National was looking forward to completing the transaction and adding the Acacia Ridge Terminal to its network of efficient freight terminals, and this will once again be delayed while the ACCC seeks to further appeal what Pacific National considered was a comprehensive and correct decision by the Federal Court," the spokesperson said.
Aurizon said it anticipated the ACCC's application would be heard and decided before the end of 2020. In the interim it would continue operating the terminal, it said.
Aurizon shares were up 0.4 per cent at $4.81 shortly after 3pm.
This article first appeared on www.smh.com.au
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