Queensland Rail float up and away

QUEENSLAND has guaranteed it will be hands-off in the management of the country's biggest rail freight hauler.

QUEENSLAND has guaranteed it will be hands-off in the management of the country's biggest rail freight hauler.

 The promise is for when investors get the "opportunity of a lifetime" to buy into the float of state-owned Queensland Rail

The anticipated $7 billion-plus share offer was launched yesterday, with state Treasurer Andrew Fraser inviting mum-and-dad investors to join financial institutions in pre-registering for a share allocation in the new company, QR National.

The existing business already transports more coal than any in the world from mine to port, operates across five states and employs more than 9000 people. About 60 per cent of contestable contracts to haul iron ore in Western Australia are held by Brisbane-based QR.

The stakes are immense for the Queensland government, which has pushed ahead with the sale of QR's profitable freight business in the face of trenchant union resistance and heavy community opposition.

The QR National float is the centrepiece of a $15bn privatisation program aimed at reducing state debt and if it falls flat both Mr Fraser and his boss, Anna Bligh, will struggle to hold their jobs.

Newspoll a fortnight ago gave the embattled state Labor government just 26 per cent of the primary vote in Queensland, amounting to an election wipeout.

A $15 million marketing blitz will be rolled out to brand QR National around the country and pave the way for one of the biggest initial public offerings since the Telstra2 and Myer floats.

Mr Fraser moved to allay market jitters about the ongoing role of the government in QR National, which will retain a stake of up to 40 per cent in what he touted as a top-50 listed company.

"The government will be holding that at arm's length," he said. "So that won't be a matter that goes to the day-to-day operations of QR National."

Sweetening the deal for small investors to pre-register for the IPO, Mr Fraser said retail share buyers would get a discount on what the big end of town paid and loyalty bonuses to hang on to their stock. Full details would be provided when the prospectus detailing the share offer was released on October 10.

The government was sticking to its promise to give every QR National employee $1000 worth of shares in the new company, Mr Fraser said. But individual shareholdings, including those by a company or consortium of investors, would be capped at 15 per cent to ensure QR National retained broad-based ownership.

Mr Fraser coupled the float to the resource boom and growth in the key Asian export markets led by China and India. "This is a once-in-a-lifetime opportunity. There is no other opportunity out there to leverage into the Asian region . . . and the resources boom. It is a unique proposition."

He said he could give no guarantee the float would raise the $7bn the government wants, except to say he was "entirely confident" it would represent value to Queensland taxpayers.

The government's strategy is not only to raise cash from the float to reduce debt and restore Queensland's once rock-solid triple-A credit rating, but to avert the need to tip billions more into maintaining and developing the rail business.

"Right now . . . I am writing cheques on behalf of the Queensland taxpayer for train sets to haul iron ore in Western Australia, right now . . . I am purchasing trains to haul coal in NSW," Mr Fraser said. "What Queensland taxpayers should be investing in are services and infrastructure - schools, hospitals, roads - in the development of this state."

The float is on track to take place by the end of the year.