Competition for coal rail market

IT IS out with grain and in with coal for rail operator Asciano, which is steadily gaining momentum on its plan to enter the coal haulage market.
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Staff Reporter

Announcing a review and restructure of its business yesterday, Asciano said underperforming businesses, particularly those in the volatile agricultural sector, would be stripped.

Chief executive and managing director Mark Rowsthorn said progress had been made on the company's plans to enter Queensland's coal market.

"The board has approved capital expenditure of approximately $A529 million and we expect to commence operations during the second half of 2009," Rowsthorn said.

"There are a number of short-term rail and ports opportunities in Australia that predominantly exploit the booming resources markets in Queensland and Western Australia.

"We will assess all future opportunities against our established investment criteria and will also consider partnering with equity investors to acquire and manage assets."

Supporting Asciano's entry into the coal rail transport market is the Queensland Resources Council which said the move shows confidence in the state's export coal industry.

"The coal industry now has two major transport providers [Asciano and Queensland Rail] vying for a share of the industry's continuing expansion," said QRC acting chief executive Greg Lane.

"For the industry, its international and domestic customers, that's very good news."

He said Asciano's pledged $529 million investment in rail infrastructure comes after QR committed $650 million in rolling stock and track upgrades.

The funds were announced by QR after the O'Donnell Review of the Goonyella coal chain highlighted an acute shortage of rolling stock available for the export coal industry.

The review calculated $900 million in lost sales and an additional $300 million in demurrage charges over a 12-month period, primarily as a result of insufficient rolling stock.

"Competition can only sharpen the customer focus in coal haulage operations for the benefit of all," Lane said.

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