FURTHER upheavals can be expected in the Australian rail sector with the news that a stake in the Adelaide - Alice Springs - Darwin rail link is up for sale.

Operator Freight Link announced at the beginning of May that it was looking for ’a long-term strategic partner’ through the sale of an equity stake. This would raise A$360m to retire debt and fund further expansion. According to Chief Executive John Fullerton, the operator will be merged with infrastructure owner Asia Pacific Transport to form a single vertically-integrated business.

At present Freight Link is predominantly owned by the contractors that built the 1410 km Alice - Darwin line opened in 2004. US engineering group Kellogg Brown & Root holds the biggest share at 36%, Barclay Mowlem has 13·9% and John Holland 11·4%. Two Aboriginal companies and the Northern Territory government also hold stakes. The smaller shareholders are expected to sell out in the restructuring, giving the new partner a majority stake.

Freight Link moves 85% of the container traffic on the Adelaide - Darwin route, but recorded a loss of A$53m in the year to June 30 2005. With the start of mineral traffic from a manganese mine at Tennant Creek, expected to total 600000 tonnes this year, and piggyback movement of road tankers, prospects for this year look better.

Queensland Rail, Toll Holdings, Babcock & Brown and Macquarie Bank have been suggested as possible buyers. However, Toll Chief Executive Paul Little said on April 23 that his company needs to focus on restoring confidence in Pacific National, which has been damaged by the drawn-out takeover battle for Patrick Corp. He hopes to ’win back the customer base and volume lost to other modes’ in the nine months before Toll has to sell a 50% stake in PN to meet its undertaking to the Australian Competition & Consumer Commission.

QR Chief Executive Officer Bob Scheuber told staff on April 27 that ’we’re interested in talking to all parties’ about the future development of the industry. His top priority is ’to establish an east-west connection, so that we can provide customers with a total transport service from Cairns to Perth’, foll-owing QR’s purchase of ARG in February.