THE SUCCESSFUL bidder to run rail freight in the Australian state of Victoria was announced by state Premier Jeff Kennett on February 22. The Freight Victoria consortium has agreed to pay just over A$163m for V/Line Freight under a 15-year renewable lease to operate and maintain the rail network outside the Melbourne area.

Freight Victoria comprises RailAmerica, Macquarie Bank, Goninan and Fluor Daniel. The consortium will invest A$36m in the first two years to improve the infrastructure and loco fleet, and to upgrade the Geelong loop with standard gauge tracks. Traffic flows targeted for expansion include paper and logs, sand, grain and fertiliser.

Transport Minister Robin Cooper said Freight Victoria had already satisfied the legal and financial requirements, and subject to safety accreditation would take control of V/Line Freight in eight to 10 weeks. Whilst leasing the network, it will acquire the rolling stock and maintenance facilities including South Dynon works in Melbourne and depots at Geelong, Portland and Wodonga.

The state government retains the right to license other operators to run passenger and freight trains over the country rail network. Freight Victoria was required to include in its bid the cost of restoring the closed Ballarat - Ararat and Sale - Bairnsdale lines to passenger standards. The government has also agreed to subsidise the continuation of V/Line’s Fast Track parcel service.

Key facts

n Australian-US venture

n A$163m for 15-year renewable lease

n Open access right retained by state

n A$36m to be invested in two years

n Parcels service to be subsidised