Market conditions may stall QR sell-off

Government committed to QR sell-off within three to five years, but market conditions may stall plans

By Brad Gardner and Nicole Holyer | November 30, 2009

The privatisation of Queensland Rail’s coal division may be stalled depending on how the market improves in the wake of the global financial downturn.

Queensland Treasurer Andrew Fraser says the Government is sticking to its plan to divest itself or QR’s above and below rail assets within three to five years, but concedes the market will play a key role in determining the date.

"Depending on market condition, that’s the timeframe that we’ll work to," Fraser says.

"We said we’d have it completed in three to five years, so, it’s basically dependent on an assessment of market conditions.

"The decisions that we have to make around the other assets are all ones that government will make in the nearer term."

The privatisation of QR is part of a mass sell-off of state assets such as the Port of Brisbane, Queensland Motorways, Forestry Plantations Queensland and the Abbot Point coal terminal.

As part of the Government’s timetable, Fraser says the first asset to be auctioned will be Forestry Plantations Queensland.

In announcing the sell-off earlier this year, Premier Anna Bligh said the Government would raise $15 billion through privatisation which would reduce the budget deficit and help Queensland improve its credit rating.

Queensland unions have opposed the plan, with the Queensland Council of Unions rejecting it "as a matter of principle".

"Public services are operated primarily in the interests of the people of Queensland rather than in the interests of shareholders returns," the QCU has previously said.

As well as the sell-off the Government scrapped the 8.3 cent fuel subsidy, leading the Queensland Trucking Association (QTA) to warn of a spike in costs for trucking operators.

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