Asciano finalises Pacific National deal with GrainCorp

By: Jason Whittaker


Transport infrastructure company Asciano has reached a deal with GrainCorp to export rail haulage services over the next five years. Under

Transport infrastructure company Asciano has reached a deal with GrainCorp to export rail haulage services over the next five years.

Under the agreement, the company’s rail arm, Pacific National, will contract eight trains out to GrainCorp that will service haulage requirements in New South Wales and Victoria.

The deal is based on a take or pay basis, which Asciano Managing Director Mark Rowsthorn says will reduce risk by ensuring a rate of return on the company’s grain assets.

The deal also stipulates Pacific National will receive additional variable payments for export grain volumes moved.
"Asciano is well placed to benefit from any upside while ensuring the grain business remains viable in the event that drought conditions persist," Rowsthorn says.

"We are very pleased to have reached a conclusion that drives supply chain efficiency and satisfies the needs of the grain industry and of Asciano security holders."

In another positive for the company, Rowsthorn expects Asciano’s Broadacre obligations with the NSW Government be met within five years.

Asciano’s $70 million obligation to invest in the future of the export grain rail haulage market in the State is forecast to reduce by $30 million upon transfer of a number of branch line rail assets Asciano no longer intends to operate beyond the date of transfer.

The assets are to be transferred to an entity nominated by the NSW Government, with maintenance capital expenditure on main line locomotives used in the State to export grain to be credited against remaining obligations.

"The NSW Government is to be commended on its leadership in ensuring that Asciano continues to invest in the NSW grain network, whilst also assisting in ensuring a commercially viable outcome for both Asciano and GrainCorp," Rowsthorn says.

You can also follow our updates by joining our LinkedIn group or liking us on Facebook