Aurizon warns of job losses after ACCC raises concerns about freight business deal

The ACCC has strong concerns about Pacific National’s planned purchase of freight businesses from Aurizon in Queensland.

Aurizon laying new tracks in Queensland.

Freight company Aurizon has warned of high-stake consequences including job losses and disruption to supply chains if Australia’s competition regulator doesn’t approve a proposal for Pacific National to buy it’s freight businesses.

The comments came in response to a report released by the Australian Competition and Consumer Commission, raising preliminary competition concerns over Pacific National’s planned deal to buy Queensland Intermodal and an intermodal rail terminal at Acacia Ridge in Brisbane from Aurizon (AZJ).

Aurizon said that it is “disappointed” by the preliminary report by the ACCC, saying that 350 jobs throughout Brisbane and regional Queensland would be lost and that the company will be forced to close Queensland Intermodal if the transaction is not approved.

The company said the ACCC’s Statement of Issues was based on the assumption that Queensland Intermodal, which has been operating at a heavy loss, could be sold to a third party and could continue to operate in the absence of the proposed acquisitions.

“This is not the case and as previously advised, if the ACCC does not clear the Queensland Intermodal transaction Aurizon will close that business,” Aurizon said in a statement to the ASX.

“Any closure of the business would likely occur by the end of 2018 and would result in the loss of up to 350 jobs throughout Brisbane and regional Queensland.”

The Australian Competition and Consumer Commission raised concerns over the takeover because the two companies are currently the only providers of intermodal rail line haul services in the state.

“Aurizon’s decision to sell its Queensland intermodal operations and the Acacia Ridge Terminal to its closest competitor, while shutting down its remaining intermodal business, will fundamentally change this market,” ACCC chairman Rod Sims said.

Aurizon last year announced plans to sell its Queensland Intermodal business to Pacific National and Linfox and a separate deal to sell the Acacia Ridge Intermodal Terminal to Pacific National, following a strategic review triggered by several years of losses. The intermodal freight business moves goods via rail and road on behalf of retailers, wholesalers and freight forwarders.

The ACCC said it worries the takeover could result in increased prices and reduced service for freight hauled between Brisbane and far north Queensland

The regulator said it expects to make a final decision on the deal on May 24.

with Dow Jones