THE AUSTRALIAN Consumer & Competi-tion Commission holds the key to plans announced in December by Toll Holdings for a ’strategic restructure’ that would divide the group into separate infrastructure and operating businesses. If the ACCC rules in Toll’s favour, the group will be able to keep Pacific National intact.A key condition of Toll’s acquisition of rival Patrick Corp in May last year was the commitment to sell a 50% stake in its rail freight business, which Toll had owned jointly with Patrick. Toll is now asking the ACCC for a waiver of this requirement and of its obligation to make available a ’starter kit’ of assets for another operator. This consists of paths on Australia’s east-west main line, terminal access and 12 locos.Toll points out that vertical integration - which had been ACCC’s principal concern over the merger - would be removed. The restructuring would see PN shunted into a new arm’s-length entity provisionally called Infrastructure Co, which would also own container terminals, ports handling bulk freight and containers as well as other port-related activities. Toll Holdings would handle freight forwarding, logistics, shipping, courier services, Toll Asia and the company’s stakes in Toll New Zealand and Virgin Blue. In theory at least, Toll would be just one of Infrastructure Co’s customers and would not receive preferential treatment.Toll argues that Infrastructure Co’s full ownership of PN would allow it to achieve further efficiencies, improve intermodal service and pursue ’growth opportunities in new bulk markets and the north-south rail corridor’. A sign of PN’s potential was the signing on December 18 of ’the largest freight rail contract in Australia’. The A$1bn seven-year deal will see PN move around 3 million tonnes of steel products a year for BlueScope Steel and OneSteel, with PN’s SteelLink Division acquiring new rolling stock for a fleet of dedicated trains linking Whyalla, Newcastle, Port Kembla and Western Port to distribution centres in state capitals.Mark Rowsthorn, who is currently Exec-utive Director at Toll Holdings and would become CEO of Infrastructure Co, told the Australian Financial Review in December that ’Australian rail is in its infancy, and the government has never been all that excited about spending money on rail. We’ve got increasing fuel prices, the whole green argument’. He felt that this gave the company good reason to invest in rail, with a large capital expenditure programme to improve efficiency and productivity.ACCC is in the process of taking market soundings. Toll believes that if ACCC’s market enquiries ’do not raise issues of concern in relation to the PN divestiture waiver, it would look favourably on that waiver.’n