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Asset sales could be winner for QLD taxpayers

18 December, 2009

"The Queensland Government's approach to the sale of Queensland Rail, the Port of Brisbane, Queensland Motorways and Abbott Point Coal Terminal achieves the appropriate balance between boosting the State's economic prosperity, achieving the best return for the Queensland taxpayer and allowing the Government to focus on its core tasks," AI Group Queensland Director Chris Rodwell has said.

"Our support for bringing the private sector into the operation of these critical assets has always been conditional on the fine print. At all times we have sought an approach that will deliver increased competitiveness and appropriately recognise the value of the assets to Queensland taxpayers. While we will further scrutinise the approach announced today, our view is that it delivers on these critical prerequisites.

"In respect of Queensland Rail, the decision to package the coal and freight businesses as an integrated entity, with the appropriate regulatory conditions, is one that will deliver for industry. It has proven to be a winning formula elsewhere in the world, most particularly in Canada.

"The incentives for existing workers to transition to the publicly listed entity through share entitlements are appropriate without undermining value for the Queensland taxpayer. It recognises the importance of the existing and future contribution of the workforce to QR's performance.

"Similarly, the timing of the sale is also appropriate. Best predictions support an argument that the taxpayer should realise the appropriate value for the asset by the end of 2010. In no circumstances can the disposal of these assets be viewed as a fire sale.

"Decisions on the other asset sales are also entirely sensible both in approach and timeframe. The decision to inject private sector expertise into both the Port of Brisbane and the Abbott Point Coal Terminal through 99 year leases should add to their commercial value. In respect of Abbott Point it is also important that the Government complete the current expansion activity leaving further upgrades to the new owner.

"The decision to hold the disposal of QML till 2011 will assist in meeting the Government's commitment to achieving the best possible value for the taxpayer for the assets. The duplication project should be completed before an appropriate value can be determined for the business.

"It is important to reiterate that these arrangements are critical to the future operation of Government in Queensland. They will realise the value invested in these assets by Queensland taxpayers, contribute to increased economic prosperity whilst also allowing the Queensland Government to focus on the big ticket essentials such as health, education and training."
Source: AI Group

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