The $9 billion takeover and carve-up of Asciano has raised fears that competition could be restricted for container logistics providers at ports.
Submissions to the competition watchdog, the ACCC (Australian Competition and Consumer Commission), centre around concerns about container terminals and train services running into ports.
The deal by a super-sized consortium of companies from Australia, Canada, Qatar and China to acquire the ports and rail freight group means a break up of the assets of Asciano.
ACCC chairman Rod Sims says there are concerns about the vertical integration of Patrick container terminals with the two largest import-export container logistics providers in Australia, Qube and ACFS.
“The ACCC considers this to be a significantly greater degree of vertical integration than the current situation where Patrick is vertically integrated with only ACFS,” Sims says.
“The ACCC is concerned that Patrick container terminals may provide preferential access to Qube and ACFS vehicles, and Qube regional export trains running into Port Botany, and raise rivals’ costs.”
Chris Corrigan’s Qube and Canadian group Brookfield Infrastructure will each own 50% of Patrick container terminals.
There are also concerns that Qube and ACFS (Australian Container Freight Services) may provide a superior service to importers and exporters on condition they use shipping lines calling at Patrick container terminals.
“This may lessen competition in stevedoring,” says Sims.
The ACCC is now seeking additional feedback on the likelihood of competition being lessened in container logistics at each port, the provision of regional rail container export services into Port Botany and stevedoring.
The ACCC expects to announce its final decision in July.
The Foreign Investment Review Board is also expected to make a decision on the takeover in July.
The super consortium seeking regulatory approvals is made up of the members of two previously competing groups bidding for Asciano.
They are: Qube Holdings Limited, Global Infrastructure Management, Canada Pension Plan Investment Board, CIC Capital Corporation, Brookfield Infrastructure Partners Limited, GIC Private Limited, British Columbia Investment Management Corporation, and Qatar Investment Authority.
Corrigan, chairman of Qube, was the managing director of the Patrick Corporation, which essentially owned Qube’s containers terminals, until it was taken over in 2006.
With the backing of the John Howard federal government, Corrigan transformed Australia’s waterfront in the late 1990s using lockouts and strike breakers to smash a union hold on the supply of labour.