WHEELS IN MO­TION

Re­cent worker strikes over em­ploy­ment con­di­tions have not ham­pered Pa­cific Na­tional’s next round of de­vel­op­ments under the fresh lead­er­ship of for­mer BHP chief op­er­at­ing of­fi­cer Dean Dalla Valle.

The Australian Mining Review - - PACIFIC NATIONAL - ELIZ­A­BETH FABRI

IT’S been an event­ful six months for in­ter­con­nected rail freight oper­a­tor Pa­cific Na­tional.

In July, vet­eran min­ing executive Dean Dalla Valle was ap­pointed chief executive of the com­pany to re­place David Ir­win; a defin­ing mo­ment as Pa­cific Na­tional lays the ground­work for its next wave of growth op­tions.

Mr Dalla Valle was best known for his four decade run at BHP, in­clud­ing re­cent work managing the global miner’s re­sponse to the tragic Sa­marco dam dis­as­ter in Brazil.

His move to the freight in­dus­try mir­rored for­mer Rio Tinto Iron Ore chief executive An­drew Hard­ing’s de­ci­sion to join Aur­i­zon as its new chief executive in De­cem­ber 2016.

In Au­gust, less than a month into the new role, Mr Dalla Valle had inked a deal with ma­jor com­peti­tor Aur­i­zon to pur­chase its Aca­cia Ridge Ter­mi­nal south of Bris­bane in a bid to sup­ple­ment Pa­cific Na­tional’s na­tional ter­mi­nal net­work.

Sep­a­rately, Pa­cific Na­tional also signed a bind­ing agree­ment to take over the Aur­i­zon Queens­land In­ter­modal business as part of a con­sor­tium with Lin­fox.

The in­ter­modal business had been op­er­at­ing at a fi­nan­cial loss for some time, which Aur­i­zon at­trib­uted to issues around es­tab­lish­ing sig­nif­i­cant scale and a cus­tomer base to sup­port the business in such a highly com­pet­i­tive mar­ket.

“Queens­land In­ter­modal sup­ports Pa­cific Na­tional’s strate­gic ob­jec­tive to grow in im­por­tant mar­kets and al­lows for Pa­cific Na­tional to of­fer new north­bound ser­vices and south­bound ser­vices within Queens­land on day one,” Mr Dalla Valle said.

As part of the deal, Aur­i­zon will sell two com­po­nents of the In­ter­modal business and close the third.

Aur­i­zon would also trans­fer about 350 em­ployee po­si­tions as well as as­sets, com­mer­cial and op­er­a­tional ar­range­ments to the Lin­fox and Pa­cific Na­tional con­sor­tium, on top of the 30 Aur­i­zon em­ploy­ees it would trans­fer under the Aca­cia Ridge deal.

To­tal con­sid­er­a­tion for the two trans­ac­tions was $220 mil­lion, and if the Aca­cia Ridge trans­ac­tion was not com­plete within six months, Pa­cific Na­tional would have to fork out an ad­di­tional $5 mil­lion.

Both agree­ments were now await­ing ap­proval by the Australian Com­pe­ti­tion & Con­sumer Com­mis­sion (ACCC) and the For­eign In­vest­ment & Re­view Board. But Pa­cific Na­tional didn’t stop there. On 24 Oc­to­ber, the com­pany an­nounced it would com­mit $35 mil­lion to kick start the de­vel­op­ment of its Parkes Lo­gis­tics Ter­mi­nal pro­ject; a ma­jor in­land freight port on the junc­tion of two of Aus­tralia’s na­tional rail lines.

“Parkes sits at the epi­cen­tre of Aus­tralia’s rail freight net­work,” Mr Dalla Valle said.

“Lo­cated at the in­ter­sec­tion of the main west­ern rail­way line run­ning from Syd­ney to Perth, the fu­ture In­land Rail cor­ri­dor from Mel­bourne to Bris­bane, and the Newell High­way, Parkes is the per­fect place to es­tab­lish a ma­jor in­ter­modal freight ter­mi­nal.”

The $35 mil­lion spend in­cluded $18 mil­lion to be­gin de­vel­op­ment of the ter­mi­nal site and $17 mil­lion to ac­quire ‘rolling stock’ like freight wag­ons.

Pend­ing fi­nal Gov­ern­ment ap­provals, once de­vel­oped the ter­mi­nal would have ca­pac­ity to process about 450,000 cargo con­tain­ers each year, and the abil­ity to haul dou­ble-stacked con­tain­ers from Parkes to Perth.

Con­struc­tion was ex­pected to be­gin by mid-2018 with first trains haul­ing freight at the ter­mi­nal in early 2019.

Pay Dis­putes

Pa­cific Na­tional has also been con­cur­rently em­broiled in in­dus­trial ac­tion over issues with new em­ployee en­ter­prise agree­ments.

The com­pany has been in ne­go­ti­a­tions with the Rail, Tram and Bus Union (RTBU) since May con­cern­ing worker con­di­tions, such as pay, breaks, RDOs, and bet­ter qual­ity ac­com­mo­da­tion.

At the be­gin­ning of ne­go­ti­a­tions the RTBU sub­mit­ted an ap­pli­ca­tion to the Fair Work Com­mis­sion to have one en­ter­prise agree­ment for all Pa­cific Na­tional em­ploy­ees at the re­quest of mem­bers.

In Oc­to­ber, Pa­cific Na­tional in­formed RTBU it would pro­ceed with two sep­a­rate agree­ments for its bulk freight and coal haulage busi­nesses.

In re­sponse, in the last two week­ends of Oc­to­ber, the union or­gan­ised two 48-hour strikes in­volv­ing hun­dreds of Pa­cific Na­tional’s train work­ers.

Ac­cord­ing to Platts, the strikes re­sulted in the can­cel­la­tion of 90 trains in the first week­end, caus­ing de­lays to New­cas­tle coal ship­ments.

The com­pany usu­ally runs 500 freight train ser­vices each week in NSW cov­er­ing the trans­port of coal, ce­ment, ag­gre­gates, and other bulk prod­ucts such as grain, and live­stock.

Pa­cific Na­tional said it had the “high­est re­gard” for its train crews and said it had con­tin­ued to ne­go­ti­ate in good faith with the RTBU for a new en­ter­prise agree­ment for its NSW bulk freight business unit.

“Pa­cific Na­tional is con­tin­u­ing to work to­wards a timely res­o­lu­tion in the best in­ter­ests of our em­ploy­ees, cus­tomers and the business, and we are work­ing around this in­dus­trial ac­tion to meet our cus­tomers’ needs,” the com­pany said.

“We are not look­ing to re­duce the terms of em­ploy­ment of our train crews, but sim­ply want to bet­ter utilise the hours they are be­ing paid, to help the com­pany re­main ef­fi­cient in a com­pet­i­tive sec­tor.”

Pa­cific Na­tional and RTBU are con­tin­u­ing ne­go­ti­a­tions to dis­cuss a way for­ward.

All im­ages: Pa­cific Na­tional.

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