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kipioneer
Chief Commissioner
Joined: Oct 18, 2004
Last Visited: Dec 1, 2008
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Posted: Sat May 31, 2008 5:48 pm
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As I see it, if the sale is at the behest of the banks, something so far denied, then the sale is effectively a "mortgagee sale" so the purchaser will get the line debt-free and the financiers will write off any balance of the debt.
Rather free of the original debt for the purchasers will still have the costs of raising their capital to take into consideration.
If it isn't a mortgagee sale, then the current shareholders of Freightlink can choose to discharge as possible of the debt by the proceeds of the sale, and the remaining debt would remain with the business.
I know which I would prefer as a potential buyer!
If it is a mortgagee sale then, if the company is making an operating profit now, it can continue to do that unhindered by the original debt, under a different ownership.
Just how much the current shareholders salvage out of this is yet to be seen.
Neil - the KIPioneer
Hawthorn SA
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witsend
Chief Commissioner
Joined: Jan 01, 2004
Last Visited: Nov 29, 2008
Location: The Beautiful Copper Coast, and sometimes, just north of Pt. Pirie
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Posted: Sat May 31, 2008 9:55 pm
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| nutbagg wrote: | | rhino wrote: | | Didn't sound too blasphemous to me. I would love to see ARTC take ownership of the line and make it open access. |
The line has always had open access. Two operators would not be profitable fighting over 700-800kt of freight a year.
http://www.freightlink.com.au/aspx/track_access.aspx
ARTC ownership would probably be a backward move considering how little attention/investment they have given the TAR in recent years. |
If it wasn't open access, the Ghan would not have gone to Darwin, unless it was hauled by FreightLink (read GWA) operated train.
PN has operating rights under the open access regime on the line in order to operate the Hook & Pull service of GSR's Ghan. They pay track access fees in order to Freightlink to operate the service.
<Begin Hypothetical>
Hypothetically, WitsEnd Transport, an accredited rail operator, was to approach Freightlink to operate an Ore Train Service from Broken Hill to Darwin, Freightlink is required to negotiate with WitsEnd. Typically, there would be three options, have our loading attached it to the back of an existing AD service, have a new FreightLink service to haul the loading or to operate it ourselves. WitsEnd Transport meets the criteria as set by FreightLink, and in theory, can elect to operate in its own right. What would in theory, is that Freightlink will allow WitsEnd to operate its own service, and contracts, setting a Track Access Fee that would allow FreightLink to make sufficient money to cover the costs involved with WitsEnd's freight train, return on infrastructure, and maintenance. WitsEnd though couldn't pickup a dozen loaded containers flats at Pt Augusta in addition to its ore loading, as its service is now competiton to FreightLink exclusive service. Neither could PacNat. However, WitsEnd could start a railcar service from Alice Springs to Darwin and not pose a threat to FreightLink exclusive, provided they were happy for WitsEnd to run it. Reality any service is run at the discretion of FreightLink.
<End Hypothetical>
With that in mind, it would be very foolish on behalf of Freightlink to prevent PN from running the Ghan to Darwin. The service pays its way, and is not competition to Freighlink's service. The idea of the 50 years lease, was that Freightlink should be able to generate sufficient return on the investment made before the line reverts to government ownership (read ARTC I guess) and the exclusivity expires, then becoming truly open access. It's as open as Freightlink chooses it to be.
If the line moved under the umbrella of ARTC, then ARTC would need to set track access fees on which it could make a sufficient return/profit on the capital. This could potentially undermine the line. In the case of any bid, the new owner could elect that the network control functions could be outsourced to ARTC/GWA/Whoever.
However, I'd suggest there are contract in place to ensure that everything remains as is for a while: ie GWA crewed services AD1/DA2 plus the mining traffic, with GWA Transport Control.
Disclaimer: This is my view, and may not be correct, as I am not privvy to the Commericial in Confidence details. Do not rely upon this information for fact.[/b]
Regards,
Samuel Wittwer
Member - LC of Yorke Peninusula Rail
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arctic
Junior Train Controller
Joined: Apr 26, 2006
Last Visited: Dec 2, 2008
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Posted: Tue Jun 03, 2008 8:18 pm
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Found this on the ABC news site
| Quote: | Freightlink denies Adel-Darwin line needs govt money
The operator of the Adelaide-Darwin rail line, Freightlink, says government will not be called on to financially support the link after a sale.
The company has put the line up for sale, amid concern about the profitability of the rail service.
Freightlink chief executive John Fullerton says Federal, state and Territory governments contributed to the set up of the freight line but have not paid running costs since.
He says the company has not had talks with government about subsidising the rail line and there will not be any need for ongoing government support.
"The government has not provided any subsidies since the line commenced operations in 2004," he said.
"The business makes operating profits, the revenue covers all our costs and there's not need for further subsidies." |
http://www.abc.net.au/news/stories/2008/06/03/2263543.htm?site=idx-nt
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bingley hall
Chief Commissioner
Joined: Nov 09, 2005
Last Visited: Nov 29, 2008
Location: gone fishin
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Posted: Wed Jun 04, 2008 3:25 pm
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| Quote: | | PN has operating rights under the open access regime on the line in order to operate the Hook & Pull service of GSR's Ghan. They pay track access fees in order to Freightlink to operate the service. |
Do they? I would have thought, but I am happy to be corrected, that the access agreements and fees are all handled through GSR and the fact that PN hauls these services is irrelevant.
Bing
Life is just a bowl of All Bran...you wake up every morning and it's there
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witsend
Chief Commissioner
Joined: Jan 01, 2004
Last Visited: Nov 29, 2008
Location: The Beautiful Copper Coast, and sometimes, just north of Pt. Pirie
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Posted: Wed Jun 04, 2008 9:54 pm
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As I am led/misled to believe, ARTC bills GWA for SCTs train, PN for GSR's. So logic would dictate that PN would be billed when they operate on Freightlink's line hauling the Ghan. PN in turn bills GSR under the terms of their hook and pull contract.
If I am wrong, I'm also very happy to be corrected.
Regards,
Samuel Wittwer
Member - LC of Yorke Peninusula Rail
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kipioneer
Chief Commissioner
Joined: Oct 18, 2004
Last Visited: Dec 1, 2008
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Posted: Wed Jun 04, 2008 11:05 pm
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| bingley hall wrote: | | Quote: | | PN has operating rights under the open access regime on the line in order to operate the Hook & Pull service of GSR's Ghan. They pay track access fees in order to Freightlink to operate the service. |
Do they? I would have thought, but I am happy to be corrected, that the access agreements and fees are all handled through GSR and the fact that PN hauls these services is irrelevant.
Bing |
| Witsend wrote: | As I am led/misled to believe, ARTC bills GWA for SCTs train, PN for GSR's. So logic would dictate that PN would be billed when they operate on Freightlink's line hauling the Ghan. PN in turn bills GSR under the terms of their hook and pull contract.
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This may depend on just how GSR regards itself - as a railway company or as a hotel operator.
If it is the former, then it will handle all its running arrangements; if it is the latter then it will happily hand the day to day business of train running to PN - otherwise it will be somewhere in the middle. I can't see it not negotiating paths, well at least the general requirements if not the specifics.
Perhaps that is why the matter of access fees is such a sore point with GSR; they are not close enough to the train running.
But then this is just speculating  (and its got nothing to do with Freightlink being sold).
Neil - the KIPioneer
Hawthorn SA
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bingley hall
Chief Commissioner
Joined: Nov 09, 2005
Last Visited: Nov 29, 2008
Location: gone fishin
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Posted: Thu Jun 05, 2008 12:26 am
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OK just to clarify and hopefully not stray too far from the subject. As with anything relating to the rail industry these days, it is so complex that there will always be exceptions to the general status quo.
On the ARTC network SCT negotiate their own access agreements and pay their own bills and always have done since 1998. Similarly Freightlink operate over the ARTC under their own accrediation and access agreements and pay their own bills.
Both may hire crews and locos from GWA and others, but that has no bearing on the access arrangements.
GSR is definitely an accredited operator and responsible for neogotiating and paying for its own paths on the ARTC network so I am assuming its the same north of Tarcoola.
Going back to the original question, there is nothing to stop PN applying to FreightLink to operate freight trains to Darwin. However the access charges would be astronomic and render any such service uneconomic.
Some may whinge about this and have their own economic theories as to how this would be deeemed anti-competitive by the ACCC and others, but it was well sewn up in legislation by the various governments involved long before the first train ran into Darwin.
Bing
Life is just a bowl of All Bran...you wake up every morning and it's there
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RTT_Rules
Chief Commissioner
Joined: Jun 23, 2004
Last Visited: Nov 30, 2008
Location: Gladstone Qld
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Posted: Sun Jun 08, 2008 3:29 pm
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If FL was paying its debt off and apeared that it would have no issue for the forseaable future, the banks would not be making a move as the interest payments over 30 years are far more enticing than someone paying off their loan in a few years. Therefore one could assume the banks are concerned about a risk of sorts.
Open to correction, but I think this could be due to container traffic not been as sucessful as hoped as what traffic is going through Darwin port as the orginal project was the sold on and even though it has mineral contracts, would there mines survive a mineral price slump?
If boxes are moving back to road, as per a post from a few weeks back stating their rates are too high, then rising diesel full prices for traffic to be road freighted over 3000km would surely slow if not stop this flow. F/L may also find it self in a situation that small increases in traffic are not viable to chase due to the need for more drivers, wagons, locos etc, so increasing charges is more viable for the buisness.
I'm with most, ARTC for track with full open access and above rail to who ever wants to pay the most.
Regards
Shane
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E1109
Minister for Railways
Joined: Jun 28, 2004
Last Visited: Dec 2, 2008
Location: Still in Alice Springs.
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Posted: Sun Jun 08, 2008 4:27 pm
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| RTT_Rules wrote: |
If boxes are moving back to road, as per a post from a few weeks back stating their rates are too high, then rising diesel full prices for traffic to be road freighted over 3000km would surely slow if not stop this flow. |
Northline went from road to rail back to road in less than 12 months as it was found to be quicker to run from Adelaide to Darwin by road when transhipment was taken into account.
Just after the line opened, the rates for cartage increased by up to 70% which scared some people off.
Todays 7AD1 is usually headed north from Alice to Darwin by now (departs 1500) but today it arrived from Adelaide at around 1530. Not sure of the reason but when people see delays on the line, it lessens their confidence in an "on-time" delivery when using rail. Even if it gets away at 1630, it may be able to get into Darwin on-time but not too sure what else is north of here at this time.
As long as fuel doesn't get too much dearer (currently 191-197 c/l for diesel here) the road will still continue to cart a fair amount of freight.
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Shacks
Ghanzel
Joined: Mar 03, 2003
Last Visited: Nov 28, 2008
Location: Sir Big Lens of the Distant (Signal) North.
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Posted: Sun Jun 08, 2008 5:36 pm
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E1109, Northline went with rail originally then after 6 months went back to road and are still with road. They only send their surplus loading via rail.
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RTT_Rules
Chief Commissioner
Joined: Jun 23, 2004
Last Visited: Nov 30, 2008
Location: Gladstone Qld
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Posted: Sun Jun 08, 2008 10:57 pm
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| E1109 wrote: | | RTT_Rules wrote: |
If boxes are moving back to road, as per a post from a few weeks back stating their rates are too high, then rising diesel full prices for traffic to be road freighted over 3000km would surely slow if not stop this flow. |
Northline went from road to rail back to road in less than 12 months as it was found to be quicker to run from Adelaide to Darwin by road when transhipment was taken into account.
Just after the line opened, the rates for cartage increased by up to 70% which scared some people off.
Todays 7AD1 is usually headed north from Alice to Darwin by now (departs 1500) but today it arrived from Adelaide at around 1530. Not sure of the reason but when people see delays on the line, it lessens their confidence in an "on-time" delivery when using rail. Even if it gets away at 1630, it may be able to get into Darwin on-time but not too sure what else is north of here at this time.
As long as fuel doesn't get too much dearer (currently 191-197 c/l for diesel here) the road will still continue to cart a fair amount of freight. |
If the freight is time sensitive then not surprised truck is favourable for some loads, especially if the rates are comparable.
Only way for fuel to remain constant if supply is increased globally or demand globally is reduced. I cannot see China or India complying for a while yet. I once read a piece that said this rail line would reduce diesel imports by about $50mpa, I'm sure its more than double that now.
Regards
Shane
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bingley hall
Chief Commissioner
Joined: Nov 09, 2005
Last Visited: Nov 29, 2008
Location: gone fishin
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Posted: Tue Jun 10, 2008 4:23 pm
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| Shacks wrote: | | E1109, Northline went with rail originally then after 6 months went back to road and are still with road. They only send their surplus loading via rail. |
| Quote: | | . . general freight rose by 24% (142,900–177,400 tonnes), bolstered by major customer Northline putting the majority of its freight back onto rail. Given that this roughly equates to 10 road trains, the move is good news for congested roads and the environment. . . |
http://www.freightlink.com.au/aspx/latest_newsletter.aspx
FreightLink are selling a different story?
Bing
Life is just a bowl of All Bran...you wake up every morning and it's there
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Shacks
Ghanzel
Joined: Mar 03, 2003
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Location: Sir Big Lens of the Distant (Signal) North.
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Posted: Tue Jun 10, 2008 5:50 pm
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About 10 roadtrains ?
Northline turnaround 35 to 40 roadtrains a week here in Darwin, so 10 would equate to only 1/4.
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Shacks
Ghanzel
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Posted: Mon Jun 30, 2008 10:15 am
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Found today on ABC web site.
http://www.abc.net.au/news/stories/2008/06/30/2289382.htm
SA businessman eyes Adel-Darwin rail link
Posted 37 minutes ago
Allan Scott is interested in the Adelaide-Darwin rail line (FreightLink)
South Australian transport magnate Allan Scott says he is interested in operating the Adelaide-Darwin rail freight service.
He says a number of industries depend on the rail link and it is vital that it continue to operate successfully.
FreightLink has been making losses and has put the service up for sale, although just last week it boosted the number of weekly freight services.
Mr Scott says he believes the rail corridor is viable but it needs improvements in infrastructure to cope with heavy freight.
"I think it's an investment - we're the biggest users of it and Toll [Holdings] are next, so what do we do?" he said.
"You know we can't afford to lose it, we can't afford to have it closed down and the banks are starting to call up the money, so something has to be done."
This is not the name that was mentioned to me.
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nutbagg
Assistant Commissioner
Joined: Feb 11, 2007
Last Visited: Nov 18, 2008
Location: In Willy Wonka's Chocolate Lake
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Posted: Mon Jun 30, 2008 1:15 pm
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| Shacks wrote: | Found today on ABC web site.
http://www.abc.net.au/news/stories/2008/06/30/2289382.htm
SA businessman eyes Adel-Darwin rail link
Posted 37 minutes ago
Allan Scott is interested in the Adelaide-Darwin rail line (FreightLink)
South Australian transport magnate Allan Scott says he is interested in operating the Adelaide-Darwin rail freight service.
He says a number of industries depend on the rail link and it is vital that it continue to operate successfully.
FreightLink has been making losses and has put the service up for sale, although just last week it boosted the number of weekly freight services.
Mr Scott says he believes the rail corridor is viable but it needs improvements in infrastructure to cope with heavy freight.
"I think it's an investment - we're the biggest users of it and Toll [Holdings] are next, so what do we do?" he said.
"You know we can't afford to lose it, we can't afford to have it closed down and the banks are starting to call up the money, so something has to be done."
This is not the name that was mentioned to me. |
I'm surprised you take this seriously. Pity Alan wasn't as passionate about keeping his line open to Mt Gambier; then when they announced the possible reopening Alan jumped up and said "we'll operate the line". If its one thing we have gained out of the privatisation of Australia and NZ's railways its that -"trucking companies cannot run railways and should stick to what they know best".
Mate, if that loco pulls as hard as you do, it'd move anything.
I'd still rather have an ALCo.
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