The government announced plans to publicly float its coal chain assets last year, as part of a series of public asset sales to reduce debt by up to $15 billion and win back a AAA credit rating.

QCIRG chairman Nick Greiner said today’s fully funded offer represented a substantial premium to what was likely to be achieved under the Queensland government’s proposed initial public offering.

“Importantly, our offer is able to be settled with the government prior to the IPO and will not be dependent on volatile equity markets, removing major risk for the state while also providing early settlement,” the former New South Wales premier said.

“We have considered the alternative model under the IPO and associated regulation and legislation and strongly believe it does not represent an optimal or even reasonable basis for assuring the future of the state’s major export industry.”

QCIRG member companies represent about 98% of the state’s coal industry.

The offer is for the central Queensland track network, covering four rail systems and the Goonyella to Abbot Point expansion.

The industry consortium secured a $1.35 billion acquisition facility underwritten by ANZ, BNP Paribas and Citibank, and also has a committed capital expenditure facility of $2.05 billion.

QCIRG said the Australian Rail Track Corporation intended to participate as an equity owner and provider of long-term management of the track assets.

Greiner said the offer was being made during a time of great uncertainty over future taxation arrangements because of the federal government’s proposed resource super-profits tax.

“QCIRG assumes that the proposed tax, if implemented, would not apply to infrastructure or the operations of QCIRG and that a sensible outcome can be achieved with the Commonwealth government on any tax on resources such that the industry’s growth ambitions can still be realised,” he said.

“However, in any event, the industry is compelled to protect its existing coal businesses through direct ownership of the coal rail network infrastructure. The industry cannot be exposed to operational and financial risk from network ownership and operation not aligned with industry objectives.”

The industry consortium is confident of completing the transaction with the state government.

QCIRG consists of Anglo American Metallurgical Coal, BHP Billiton, BHP Billiton Mitsubishi Alliance, Ensham Resources, Yancoal Australia, Jellinbah Resources, Macarthur Coal, Peabody Energy, QCoal, Rio Tinto Coal Australia, Vale, Wesfarmers Resources and Xstrata Coal.

Aquila Resources and New Hope are expected to hop onboard at a later stage.