Eco Investor February 2015

Core Securities

Qube to Develop Rail Freight Precinct

A rare environmental winner from the rise of the Abbott Government is Qube Holdings, which has reached an agreement with the Federal Government to combine their land holdings and develop the Moorebank intermodal rail project in south west Sydney.

The agreement, through Qube's SIMTA consortium, is with the Moorebank Intermodal Company, and is subject to Federal Government approval. The previous Labor Government did not support combining and developing the SIMTA site and the adjacent Commonwealth site as a single integrated precinct.

Qube managing director Maurice James said the development will commence this year subject to planning approvals and should significantly increase competition in the Sydney intermodal freight market.

Under the deal, SIMTA would develop the Moorebank freight precinct and be the operator. The precinct will include an open access import-export (IMEX) freight terminal with a final capacity of 1.05 million containers a year, and an open access interstate freight terminal with an ultimate capacity of 500,000 containers a year.

A rail link will connect the site to the Southern Sydney Freight Line; there will be 300,000 square metres of warehouses and distribution facilities; and the freight village will include support services such as site management, security offices, driver facilities, and convenience, retail and business services.

The agreement with the government is a major logistics development that will add to Qube's environmentally positive credentials by increasing rail freight and reducing truck movements on Sydney's roads.

In other news, Qube has acquired NZ stevedoring and marshalling company, ISO Limited. ISO operates in seven NZ ports and at Portland and other ports in Australia. Its stevedoring, marshalling and transport operations are focused on the forest products industry.

The initial purchase price is NZ$80 million with further consideration in June 2018 if earnings targets for the financial years June 2016 to June 2018 are achieved. The acquisition will be funded from cash and undrawn debt facilities and is expected to be earnings per share accretive in 2014-15.

Mr James said "ISO is a high quality business with a long term customer base, and an experienced and highly regarded management team who will remain with the business." It will provide Qube with diversification through a new geographical market and product sector. (ASX: QUB)

 

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