US group wins CBH tender

CBH Group has awarded a 10-year grain rail contract to US rail transport group Watco Companies and flagged plans to spend up to $175 million on new rolling stock.

Watco will replace QR National subsidiary Australian Railroad Group when its agreement ends in April 2012.

It is the first time CBH has put its rail transport contract out to tender.

The new deal is due to start in May 2012.

Dr Crane said the agreement marked a new era for grain rail freight in WA and promised it would deliver significant benefits for growers.

“Our decision to go to tender for the first time for our rail transport requirement has resulted in the introduction of competition for the first time in the WA grain rail freight market and the first major investment in new rolling stock for decades,” Dr Crane said.

Watco chief commercial officer Ed McKechnie said the grain haulage task in WA was similar to that in the US.

“Our goal out of this is to move those tonnes to port, create more value for the network and more tonnes on rail,” he said.

“Every dollar you can shave off transportation makes Australia wheat more competitive and makes WA stronger.”

Mr McKechnie said he understood the questioning of having an American company in WA but gave assurances that Watco was going to “be an Australian company with a great American heritage”.