DECEMBER’S announcement that TNT and Toll Holdings were forming a consortium to exploit Australia’s nascent open access regime by operating freight trains between major cities means that National Rail Corporation could follow Australian National into what amounts to liquidation (RG 1.97 p8). Conceivably, the joint TNT-Toll operation could become so dominant that it will effectively negate the policy of competition on the rails, as English Welsh & Scottish Railway has done in Britain.TNT, which is controlled by Royal PTT Nederland NV, became the second open access operator on Australia’s interstate trunk routes in July 1996 when it launched a thrice-weekly Melbourne – Adelaide – Perth service. Chief Executive David Mortimer said this service had ’exceeded expectations’ and would be expanded before other routes were opened up. ’If we can get the efficiencies and cost savings I predict, then rail will be in a position to recapture much of the freight that has moved over to road in recent years.’Toll was NRC’s second largest customer after steel producer BHP, and the most important for unitised freight. A contract signed last year looked set to bring NRC up to A$80m in annual revenues, but Toll Managing Director Paul Little was predicting in December that ’a significant percentage of our volume could be on TNT’s trains by March’ – Toll’s Melbourne – Perth rail traffic is worth A$60m a year.This decision virtually eliminates any chance that NRC will meet mandatory profitability criteria when transitional subsidies end a year hence. The federal government, which owns 72·8% of NRC shares, has already decided to sell; as minority shareholders, the NSW and Victorian governments are expected to go along with this. TNT-Toll will want to acquire rolling stock and other assets, but may balk at bidding for NRC as a complete entity. Picking up useful assets at fire-sale prices without the liabilities, as AN purchasers will be able to do this year, may prove more appealing come 1998. o
Articles from October 2020
Russians boost rail spending
PRIVATISATION of the Russian rail network has been ruled out by First Prime Minister B E Nemetsov, despite the drastic cost-saving programme imposed in July (RG 9.97 p575). Emphasising that ’the economy of Russia will fully depend on whether or not the railways function efficiently’, he insisted the railways should continue as a state enterprise. But ancilliary activities such as workshops, design consultancies and medical and social institutions will be hived off.Restructuring of RZD’s regional management is continuing in line with last year’s proposals. All of the East Siberian Railway’s divisions have been abolished, as have three of the six at the Gorki Railway. GR President O Sharadze expects to make another 900 staff redundant before the end of this year. As part of the drive to improve commercial performance, the director of the Railway Development & Economics Department B Lapidus has unveiled a major investment programme. Fixed priority projects totalling US$8·2bn include construction of a new bridge across the Amur river in Khabarovsk, and completion of the 15 km Severomuisky tunnel on the Baikal – Amur Magistral, which is to be resurrected at a cost of US$1bn. The Khabarovsk – Ussurisk and St Petersburg – Murmansk routes are to be electrified, and the Moscow – St Petersburg – Helsinki line upgraded for 200 km/h. The Moscow – Krasnoye – Brest corridor will also be modernised.Vice-Minister of Railways E Podavashkin announced in August that RZD had approved an eight-year programme to modernise its communications network at a cost of US$1·8bn. As well as a 45000 km optic fibre network, satellite links costing US$200m are to be introduced by 1998 to cover the Siberian, Far Eastern and Kaliningrad regions. A subsidiary telecommunications company is to be set up, and Siemens and AT&T have been selected for work in the southwest and east of the country respectively. Spanish consultancy Ineco has been chosen to assist with construction of the first 140 km section of the planned RAO VSM high speed line between St Petersburg and Moscow. The contract includes stations at Obukhovo, Zharvoskaya and Melnikovo, together with connections to the October Railway, maintenance depots, and installation of 25 kV AC electrification, communications and safety systems. o