Sinclair Knight Merz carried out both engineering and market due diligence related to the client's bid for Westrail Freight. The Western Australian Government had announced its intention to sell Westrail Freight (a vertically integrated rail freight business), which operated approximately 5000 route km of track in the south west of Western Australia and hauled approximately 29 300 000 net tonnes per annum.
The main objectives of the sale were to:
- secure a purchaser that would introduce innovation and operating efficiencies, grow the business of Westrail Freight as well as invest in the business
- ensure existing Westrail Freight staff were treated fairly in the sale process
- ensure only legitimate risks and liabilities were retained by the State
- maximise sale and lease proceeds to the State.
The services provided by Sinclair Knight Merz included:
- a review of existing track infrastructure and an assessment of both capital works and maintenance budgets
- a review of existing rolling stock and an assessment of both capital works and maintenance budgets and operating costs
- an independent audit of the client's business forecasts and a market analysis of the Westrail Freight business
- an independent environmental audit
- a review of the financial model and sensitivity analysis.
The client was successful in acquiring Westrail Freight.