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Victoria buys back regional network

01 May 2007

RESPONSIBILITY for the regional rail network in the Australian state of Victoria will pass from Pacific National to the state government this month under an agree-ment signed on April 13. PN will receive A$134m for surrendering a 15-year lease, renewable to 45 years, which was purchased by Freight Australia in 1999.As PN acquired the lease in 2004 from RailAmerica, along with rolling stock and other assets of Freight Australia, for just A$190m, its parent Toll Holdings should be well pleased with the deal. PN has also shed the onerous responsibility of maintaining and upgrading 4 000 km of lines which in many cases are in poor condition, and can be used as of right by competitors.As originally leased, the network comprised all 1 600 mm gauge lines outside the Melbourne commuter network, which is now leased to and operated by Connex. Subsequently, the interstate route between Melbourne and Adelaide was converted to 1 435?mm gauge, with control handed over to Australian Rail Track Corp. Other lines in western Victoria that were converted to 1 435?mm remained part of the lease.Announcing the deal on April 16, Minister for Public Transport Lynne Kosky described it as 'a major step towards a better freight network for regional Victoria'. She said the original lease with Freight Australia 'was fundamentally flawed in that it did not promote competition, allowed parts of the rail network to deteriorate, and prevented the government from accessing the track to carry out infrastructure upgrades. We have also committed A$25m to improve the rail freight network and will continue to provide ongoing funding for the passenger network'.Responsibility for managing the regional lines passes to V/Line, operator of passenger services within the state outside the suburban network, which is managed by Mainco Melbourne Pty Ltd. All rail and tram track is acually owned and leased out by Victorian Rail Track Access Corp (VicTrack Access) on behalf of the government.