Aurizon and Pacific National dragged to court over alleged anti-competitive deal
The competition watchdog has dragged rail freight giants Aurizon and Pacific National to court over an "understanding" that would have monopolised a crucial haulage route and substantially damaged competition on others.
The Australian Competition and Consumer Commission alleged Thursday the two companies had reached an "understanding" to close some parts of Aurizon's intermodal freight business and sell other parts to Pacific National, which had the purpose or likely effect of lessening competition in the sector.
'The effect of the understanding was that Aurizon would stop competing with Pacific National to supply intermodal and steel rail linehaul services throughout Australia,” ACCC chairman Rod Sims said.
The watchdog, which wants the Federal Court to block the sale and issue penalties, says Aurizon could have sold its intermodal business to another party, which would have been more competitive.
"The ACCC is aware of at least one alternative purchaser that is willing and able to acquire Aurizon’s entire remaining intermodal business,” Mr Sims said.
“The evidence makes it clear that it was more lucrative for Aurizon to agree to sell parts of its intermodal business to its closest competitor, and close other parts of that business, than it was to sell the whole intermodal business to a potential new entrant.”
Aurizon put its intermodal business - consisting of several components, including its Acacia Ridge Terminal - on the market in the first half of 2017, but terminated talks with other bidders after reaching the "understanding" with Pacific National in July that year, the ACCC alleges.
That understanding involved Pacific National either buying the Acacia Ridge Terminal, or being awarded a long-term contract to operate the terminal if the ACCC blocked the sale, the watchdog alleges.
Pacific National would also become the exclusive bidder for Aurizon's Queensland intermodal business, and that Aurizon would close that business if a sale was not completed, it says.
Aurizon said publicly earlier this year that it would close the Queensland business if the ACCC blocked its sale, and closed its interstate intermodal business in December last year.
These closures were the direct result of the "understanding" between Aurizon and Pacific National, according to the ACCC, which is seeking an interlocutory injunction to stop Aurizon closing the Queensland business until the matter is determined by the court.
Aurizon said a statement that it "strongly refutes the ACCC allegations in today’s decision and will vigorously defend the proceedings commenced by the ACCC".
The total consideration for the sales was $225 million, Aurizon said.
More to come