QR sale could be good for Rocky
THE privatisation of Queensland Rail’s coal and freight services presents a golden opportunity for the Rockhampton region, an economics professor said yesterday.
CQUniversity professor of regional development economics John Rolfe said privatisation opened up a range of possibilities for growth, but there was no guarantee where these would be located.
The government on Tuesday announced QR would be split into two entities, with the coal and freight business and its above-rail infrastructure to be floated under the name QR National.
Passenger rail services would remain part of the government-owned corporation called QR.
A 99-year lease over the coal rail network would be included in the QR National deal.
“Rockhampton clearly has some logistical advantages over other areas which give it a head start,” Professor Rolfe said yesterday.
“There are opportunities for the region to capitalise on this and become a major transport hub, but we will need to compete against other centres for it.”
He said the government was doing the right thing by selling assets that could be more efficiently run by the private sector.
“The coal and freight sections are highly commercial businesses that will be attractive to the private sector to operate,” Professor Rolfe said.
He said the economic case the government had advanced to date was weak, but could be much stronger and transparent.
“The government’s case will be much stronger and more transparent if they set out the business case for divesting these assets now,” Professor Rolfe said.
“I think the recovery in the mining sector is coming at a good time for the government, because it will be making these assets much more attractive to the private sector.”
He said the union’s response demonstrated how hard it was for governments to manage these types of enterprise and reinforced the case for privatisation.
“The growth in the minerals sector and the associated economy is only going to increase needs for transport, and ultimately jobs in the sector,” Professor Rolfe said.
“In the longer term, the rail sector will probably operate in different ways, but privatisation will ultimately improve growth prospects, as well as employment and wage levels.
“One of the biggest challenges for the government will be to privatise the railways without transferring monopoly power to future private operators.
“Floating the assets on the stock exchange and in two separate groups are both good steps in this process.
“However, more detail is needed to show what regulations and safeguards the government has in place to ensure that this set of infrastructure and services will not transfer too much control to private operators.”
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