Queensland Rail has set out to challenge Pacific National’s
dominance of cross-continent rail freight after joining forces with Babcock
& Brown to buy the West Australian rail system for $1.3 billion, reportsThe Age.

It’s hard not to view the long-awaited consummation of
Queensland Rail’s plan to buy the best bits of Australian Rail Group through
anything but the prism of the bristling feud between Toll Holdings and Patrick
Corporation, says Matthew Stevens in The
Australian. QR boss Bob Scheuber’s pretty expensive coup seems to have left Toll Holdings not knowing
whether to laugh or cry.

A sector once stable is now in ferment, says Stephen
Bartholomeusz in The Smage. Toll and Patrick are at
war, with Patrick seeking to break up their Pacific National rail freight joint
venture. Patrick has one foot in freight forwarder, FCL, and another in Linfox.

Meanwhile, QR will acquire ARG’s
rail haulage in WA, its carriage of P&O containers between Adelaide and
Melbourne, the haulage of Manildra flour in NSW and access to certain depots
and facilities in South Australia, says Bryan Frith in The Australian.

This latest development has underlined the “sheer lunacy” of
Chris Corrigan’s push to destroy shareholder value by converting a monopoly
asset into a competitor coming from behind, says John Durie in the Financial Review (not online).

Foster’s Group has predicted another wave of rationalization
in the wine sector and a deepening of the price war at liquor retailing
outlets, reports the Fin. Fosters is
“a great company in a lousy industry,” says Durie. But O’Hoy has the chance to
produce good returns through supply chain improvements. And while he’s not
there yet, he’s heading in the right direction.

With a keen eye on the Asian market, Qantas is exploring a
potential partnership with Indonesia’s
cash-strapped national carrier, Garuda, reportsThe Sydney Morning Herald.

In other news, EU and US
anti-trust officials have raided the offices of British Airways, Lufthansa, Air
France-KLM, Cargolux and other air
cargo companies as part of a worldwide cartel probe… The Enron trial continues,
with former broadband division CEO Ken Rice takes the stand to talk about how
his highly touted operation had no profits and few real customers… Why Iraq’s
plentiful oil supplies are being wide-berthed by the oil majors… Bidding for the memoirs of former US Fed chairman Alan
Greenspan reaches a cool $5m… And that Barron’s
cover story that sent Google into a spin.

On Wall Street, US stocks rallied to a sharply higher close
Tuesday, after a surge in January retail sales and a drop in crude-oil prices
to a six-week low. The Dow Jones rose 136.07 points to 11,028.39, marking the
average’s largest one-day point gain since 3 January.