In a Federal Court submission yesterday, Toll’s lawyers submitted an outline of new undertakings the company said it hopes will address the concerns of the Australian Competition and Consumer Commission.
The ACCC claims that Toll’s takeover bid for stevedore Patrick would reduce competition in the transport market.
Toll said its undertakings include a continued 50:50 joint venture structure of Pacific National, by introducing a new independent partner once the takeover is completed.
“By selling Patrick's half of the business to an independent joint venture partner, Toll aims to preserve the competitive nature of the current ownership arrangement,” Toll said.
The ACCC said it was concerned that if Toll owned 100% of Pacific National, it could use its market power to operate solely in its own interests and exclude freight forwarding competitors.
The ACCC also said Toll's dominance would likely hinder a new long-term competitor to Pacific National beginning operations on Australia's east-west rail corridor.
Toll told the ACCC yesterday that it would make assets and services available to facilitate the entry of a new or existing competitor on the east-west rail corridor.
Toll also said that when its track access agreement expires on June 30, 2006, it would leave the interstate track controller Australian Rail Track Corporation free to allocate future train routes.
Pacific National inherited these track rights from National Rail, bought by Toll and Patrick four years ago.
Toll also made undertakings to the court that it has also offered to sell Patrick's Bass Strait shipping and freight forwarding operations, divest its interest in either Patrick or Toll's vehicle transport distribution business and also its share in vehicle distributor PrixCar.
Toll also said it would sell the Minto rail siding in Sydney and provide "hook and pull" services to east-west rail rival Specialised Container Transport until SCT gets its new locomotive fleet.
SCT is currently the only operator other than Pacific National with regular services between the eastern states and Perth and relies upon Pacific National for hook-and-pull services.
The ACCC has until March 14 to respond to Toll's new undertakings with proceedings adjourned until March 17.
Toll's offer for Patrick expires on March 13 but is likely to be extended.
