UNCERTAINTY surrounds the future of regional freight trains in the Australian states of Victoria, New South Wales and Tasmania, which are currently operated by Pacific National. Parent company Asciano told investors in early December that it would cease to provide a range of intermodal and bulk services, primarily serving the agricultural sector.

Asciano claimed that it could not continue providing marginal operations linked to a volatile rural sector, which has been heavily impacted by drought in recent years. The company has yet to outline its exit strategy to stakeholders, but a study by KPMG is due to be released this month.

Victoria looks likely to be hardest hit, with PN ending bulk grain services and intermodal operations to several major towns, which could put an estimated 50 000 more lorryloads on the state's roads each year. Intermodal customers claimed that Asciano had set a February 5 deadline, but by late January the company was negotiating to continue some trains on a 'take or pay' basis.

Asciano says it will work with the Victorian government and customers to find alternatives, but key issues include a lack of alternative operators, plus a shortage of locomotives and rolling stock - most of which are owned by PN. The government also commissioned its own report into the future of regional rail freight operations.

In New South Wales the cuts are mainly expected to affect bulk grain services on some more marginal branch lines. The Tasmanian government is looking to hold PN to its 2007 agreement, which saw the state resume ownership of the rail infrastructure in return for continued operation of freight services.