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The competition watchdog has appealed against the Federal Court’s decision to allow rail operator Pacific National’s acquisition of Aurizon’s Acacia Ridge Terminal.

The Australian Competition and Consumer Commission is appealing against last month’s dismissal of its attempt to block the deal on the grounds it would substantially lessen competition in regional rail haulage.

“The ACCC alleges that in July 2017 Pacific National and Aurizon reached an understanding that would lead to Aurizon exiting its intermodal business through a combination of closure and transactions with Pacific National,” said ACCC chairman Rod Sims.

“The effect of the understanding was that Aurizon would stop competing with Pacific National to supply intermodal and steel rail linehaul services throughout Australia.”

Mr Sims said an alternative purchaser was willing and able to acquire Aurizon’s entire remaining intermodal business, but it was more lucrative for the company to sell parts of it to its nearest competitor and close the rest.

Pacific National offered a last-minute court-enforceable undertaking that would prevent it from discriminating in providing access to other rail operators, but the ACCC believes that is not enough to protect potential entrants from unfavourable treatment once they have access.

The ACCC on Thursday said it is also seeking an injunction preventing Aurizon from closing its Queensland intermodal business, as the company has threatened to do if the sale was opposed by the ACCC.

Aurizon said in a statement it would continue operating the Acacia Ridge Terminal, which it is making a small profit on, as per current arrangements until the matter can be heard.

Aurizon said the ACCC was asserting the court made an error by accepting the access undertaking in relation to use of the terminal.

“Aurizon does not accept this assertion and is of the view this matter was fully considered by the Federal Court and the decision handed down in May 2019 was clear and comprehensive,” the company said.