ON JUNE 13 New South Wales operator FreightCorp announced that aluminium supplier Alcoa had signed an agreement on June 1 giving it preferred bidder status for a contract to move traffic in Western Australia. The first step will be for FreightCorp to agree with Alcoa and infrastructure company WestNet Rail for access to the Western Australia network.
FreightCorp says that ’further successful development of the agreement will lead to a contract’ to haul more than 14 million tonnes of bauxite and raw materials a year to Alcoa’s alumina refineries. It could be worth around A$50m a year.
The announcement was quickly challenged by Australian Railroad Group, the joint venture between Wesfarmers and Genesee & Wyoming that bought Westrail Freight last year (RG 11.00 p788) and owns WestNet Rail. ARG claims to have an agreement with Alcoa to haul freight until 2015, but Alcoa told The Financial Review that this could be terminated with 18 months’ notice.
Complicating the outcome is the fact that FreightCorp is about to go on sale with National Rail Corp. The NSW and federal governments have agreed that the tender process for purchase of FreightCorp and NRC will recognise one mutually acceptable bidder. Prospective purchasers include Lang Corp and Toll Transport, but Genesee & Wyoming has also expressed interest.