Australia’s national rail network will reportedly be privatised, possibly through a share market listing, under plans to be announced in the federal budget tomorrow night.
Treasurer Joe Hockey will outline a plan to sell the Australian Rail Track Corporation as part of a suite of measures to shrink bureaucracy and provide an exit for government from some areas of operations where the private sector can step in.
The ARTC manages over 8,500kms of interstate track across South Australia, Victoria, WA, Queensland and NSW. It maintains the national rail network, runs its capital investment, and sells access to rail operators. The sale has been discussed as an option for years and was contemplated by the Commission of Audit in its report to the government last year.
The audit commission noted:
In 2012-13, the Corporation reported annual infrastructure maintenance expenses of $174.6 million. Also, in recent years there has been a significant level of investment as part of past stimulus packages, resulting in improved track reliability and transit times on some sections of track. A major capital investment programme in excess of $3 billion is committed to 2017-18.
However, the audit commission also said “in recent years some of the capital projects undertaken by the Australian Rail Track Corporation have had marginal benefit-cost ratios, were not needed to meet future demand projections or did not effectively address expected capacity constraints”.
The commission valued the fixed assets of the ARTC at $4.4 billion. (For comparison, the Medibank Private float last year raised almost $5.7 billion.) With the government facing a deficit of some $45 billion, a valuation in that region won’t put a huge dent in the red column, but it all helps.
There’s more at The Australian.
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