ACCC rejects POTA bid for MCS in Sydney

The shock move follows industry consultation that ACCC chairman Graeme Samuel said uncovered "significant competition concerns" related to the deal.

Mr Samuel said the combined entity was likely to "substantially lessen competition" in the market for empty container storage near rail facilities, in contravention of the Trade Practices Act.

"The storage of empty containers at or close to rail facilities is particularly important to exporters of bulk containerised commodities such as grain, cotton and aluminium in NSW," Mr Samuel said.

"MCS and POTA NSW both operate parks that provide storage and other services for empty containers in the Port Botany precinct with rail access.

"The only other provider of storage services of this type in the area is Patricks' facility in Camellia.

"The proposed acquisition would therefore result in a reduction in the number of operators offering storage for empty containers moved by rail from three to two."

POTA announced a binding agreement on July 30 that would see it acquire all of the shares in MCS, its Sydney container park and transport rival (see July 30 report).

The parties had been expected to finalise the transaction this month.

But by August 10, the ACCC had flagged its intention to review the deal in light of competition concerns.

The ACCC discussed the potential implications of the deal with the competitors, customers and other stakeholders.

"Concerns were also expressed at the recent introduction of fees imposed on trains entering the POTA facility at Port Botany to collect empty containers," the ACCC said.

"The MCS site at Cooks River currently provides an alternative location for rail operators to access its container facility without having to pay an access fee."

The ACCC said a Public Competition Assessment would soon be available at its website, www.accc.gov.au.

Industry reaction at www.lloydslistdcn.com.au tomorrow.