The Guardian February 27, 2002


Notorious union-basher buys rail network:
Rail workers beware!

With the acquisition of FreightCorp and National Rail by Toll and Lang 
Corp, Chris Corrigan, one of Australia's best known anti-worker, anti-union 
zealots, will be set to wreak his brand of terror over rail workers. The 
man responsible for the unleashing of savage dogs and balaclava-clad goons 
onto them in 1998 is set to "reform" these rail operations.

The Federal, NSW and Victorian Governments announced on August 24, 2001, 
that the "best outcome for profitable freight carriage" was a sale of their 
assets to one private owner. The three governments are stakeholders of the 
main interstate freight rail carrier National Rail Corporation (NRC) and 
the NSW freight rail carrier FreightCorp.

FreightCorp and National Rail hold up to 70 percent of the standard/broad 
gauge rail freight rolling stock in Australia. In Sydney they hold the 
monopoly at Port Botany terminal, where FreightCorp runs the PortLink 
service and is the major container operator into Port Botany.

Lang Corp and Toll will pay $1.17 billion for the assets, except the tracks 
that are owned by the state governments.

Other bidders for the public assets included Rail America and the 
consortium of Wesfarmers/Genesee and Wyoming (US) joint owners of the 
Australian Railroad Group.

On September 5 last year Toll and Lang announced they would form a 
consortium for the combined rail freight sale.

Toll, a major Australian transport and logistics company, is the main 
customer for National Rail. Toll has a substantial trucking fleet in which 
the majority has been contracted out to small operators. It would be no 
trouble to alter these contracts so as to cater for an increase in rail 
freight.

Lang Corporation is the parent company to major stevedoring company Patrick 
Stevedores. Chris Corrigan is the managing director in Australia. Lang Corp 
can now improve rail links to the ports for a continuous service in import 
and export. Control of the terminals will increase their profits and could 
be used to Lang's advantage against competitors using rail services.

National Rail profits

The Commonwealth injected $680 million into NRC over the last eight years 
to upgrade terminals, replace the locomotive fleet, introduce information 
technology, which saw it increase its rail freight (predominantly from road 
to rail) at 16 billion net tonne/kilometre in 1996/97 to 17.1 billion net 
tonne/kilometre in 2000/01.

National Rail Corporation began operations in 1991 when freight was running 
at a loss of $321 million annually. The announced sale of National Rail 
came at a time when it was headed toward its first profit, $2.3 million 
before tax. Federal Minister for Finance Nick Minchin gave his support for 
the sale by saying NRC never made a profit.

The ALP and Liberals are up to the same old tricks. Use public ownership to 
make an efficient operation then sell it to their mates. Events like the 
takeover of these two rail bodies highlight the utter corruption, greed and 
allegiance of these political parties to the bosses.

Making a profit for your mates comes before the possible expenditure of 
revenue on services so badly needed by the people, including health and 
education. The sale of FreightCorp and National Rail is nothing but theft 
from the people as is the case with all privatisation.

The NSW Government sold both its FreightCorp and the NRC shares for $809 
million, of which $439 million went to pay off debts. The Commonwealth made 
$220 million on the NRC sale, which will be used to maintain the tracks 
used by Corrigan and Toll and to pay off outstanding debt.

The prized rail assets are now controlled by the anti-worker union basher 
Chris Corrigan and Toll's Paul Little. Since Corrigan's infamous attack on 
the MUA four years ago, Lang's shares rose from $1.43 each to $13.50, with 
expectations that they will reach $15 within the year.

Toll shares have also experienced a similar rise from $3.50 three years ago 
to $30, with expectations of hitting $40 within the year.

Union bashing, cuts to workers' wages and conditions and good deals from 
governments certainly swelled profits.

RailCorp and NRC were recorded jointly as earning $25 million last 
financial year, after tax and depreciation.

Within a few years Paul Little reckons he wants this new business to be 
making $250 million in earnings.

Other big earners from this sale were the consultants who will get a 
substantial cut of public assets. The NSW Government is being advised by 
Credit Suisse First Boston and the Federal Government has retained 
Macquarie Bank.

Public is best

Australia needs a publicly owned, integrated transport system. Rail, sea, 
road and air transport are all suffering because they are in the process of 
being broken up and sold off, being underfunded by government or have 
already been privatised in part or whole.

Instead of a system of moving goods and people across the continent, with 
each mode of transport complimenting and supporting the other, we have a 
mish-mash of competing interests.

Governments, both state and federal, sell off transport systems (and at 
bargain basement prices) and subsidise the non-profit parts, such as track 
maintenance and non-profit airports. Services to the public are cut while 
taxpayers bail out bankruptcies caused by the incompetent and short-sighted 
private owners.

At the same time the rate of exploitation of workers in the various 
branches of the transport industry has been increased. Victoria's 
privatised rail and bus systems are an example of a government-subsidised, 
for-profit failure, with the conditions and wages of its workers being 
eroded, services taken away and fares increased, all to maintain profit 
levels.

The Howard Government's massive reduction in funding is killing Australian 
shipping. The use of foreign ships in Australia has grown by 293 percent 
since 1994, with only around 45 major Australian flagged and crewed vessels 
still operating in Australian waters.

In aviation, Australia's national airline Qantas is in private hands. The 
Ansett debacle continues and the sell-off of Sydney Airport is near the top 
of the Howard Government's priorities.

All this is the planlessness and chaos of the private sector in action. 
Privatisation of Australia's transport system is against the public good 
and a burden on the economy, and the Toll and Lang Corp takeover confirms 
its anti-worker nature.

* * *
Acknowledgements: Railway Bulletin, produced by the Maritime and Transport Branch, CPA: http://www.geocities.com/cpamaritime

Back to index page