A KEY farm lobby group will urge the Australian Competition and Consumer Commission to block Brookfield Infrastructure's $8.9 billion takeover of rail and ports group Asciano unless the regulator controls oversight of the nation's rail freight network.
Grain Producers Australia, which is backed by the influential NSW Farmers Association grains division, is expected to send a letter on Monday to the ACCC and federal Agriculture Minister Barnaby Joyce seeking a better regulatory rail regime as a precursor to Brookfield's takeover of Asciano.
The ACCC is expected to make a decision on the takeover on Thursday (today).
The GPA will argue a protracted dispute in Western Australia between Brookfield and CBH Group is a perfect example of regulatory failure and demonstrated a critical need for the government to put in place a better regime before agreeing to the transaction.
"The regulatory environment is clearly inadequate, the grain industry is losing value and this appalling situation can only reduce public support for foreign investment, at a time when Australia needs to encourage investment and grow economic activity," GPA chairman Andrew Weidemann said.
"Without appropriate regulation and a national structure for management of access to key infrastructure like rail, we are forced into being a price taker with little negotiating power, so the Brookfield proposal for Asciano should be accompanied by the Australian government defining a far better regulatory regime."
The sentiment was echoed by the Rail, Tram and Bus Union, which has argued to the ACCC that the system of allowing states to oversee rail freight networks has created a "regulatory dog's breakfast".
Asciano has even complained about Western Australia's rail access regime as part of a review of the state's rail code, arguing the negotiate-arbitrate model governing access to the tracks is flawed because it gives operator, Brookfield, too much power.
Brookfield Rail, a subsidiary of Brookfield Infrastructure, operates WA’s 5500-kilometre freight rail network.
CBH, the nation's biggest grain exporter, is furious about rising fees to access rail amid closures of parts of the network and falling maintenance.
The tensions between CBH and Brookfield are being eyed more closely by east coast players because of expectations that Brookfield would likely bid for the Australian Rail Track Corporation, if it were sold. The GPA is backed by the grains divisions of state farm lobby groups across the country.