V/Line Freight privatised for $163m
Freight Victoria, the successful bidder for V/Line Freight Corporation, will pay just over $163 million under a 15 year renewable lease to operate and maintain Victoria's country rail network.
Freight Victoria will invest $36 million in the first two years to improve infrastructure, modernise or replace parts of V/Line Freight's locomotive fleet as well as upgrade the Geelong grain loop to include standard gauge.
The consortium also plans to increase key bulk traffic flows including paper and logs, sand, grain and fertiliser.
As part of the lease agreement, other passenger rail and freight operators will have the right to run their own services in competition with Freight Victoria in accordance with standards set by the Government.
Freight Victoria is a consortium of United States rail freight operator RailAmerica, Macquarie Bank, Goninan and Fluor Daniel which have wide-ranging experience in running rail freight operations in Australia, the United States, Canada and South America.
The consortium intends to invite up to 49% Australian equity participation in Freight Victoria.
Fast Track, V/Line Freight's parcel service, will continue to operate and receive Government subsidies.
Freight Victoria is expected to formally take over the running of V/Line Freight in 8-10 weeks.
"The company will be required to obtain full safety accreditation from the Government's Director of Public Transport Safety before taking control of the Victoria's Freight operations.
Once the sale is completed, Freight Victoria will take on the ownership of V/Line Freight's rolling stock and key maintenance facilities, including the South Dynon locomotive workshop and facilities in Geelong, Portland and Wodonga.
(News Release, Offices of the Premier and Minister for Transport, 22 February 1999)