RAIL DUOPOLY NEEDED IN AUSTRALIA IF FUNDS ARE TO FLOW: TOLL MD.

MELBOURNE, Sept 1 Asia Pulse - Funding needed to upgrade Australia's railways may not be available unless a rail duopoly is permitted similar to that in the airline industry, Toll Holdings Ltd (ASX:TOL) managing director Paul Little said.

Logistics operator Toll Holdings and stevedore Patrick Corp Ltd (ASX:PRK) jointly own the Pacific National rail freight network.

Mr Little told a Securities Institute luncheon Tuesday that he expected further rationalisation in the rail sector to occur and governments in future would struggle to pay for upgrades to transport infrastructure.

"I think governments will struggle to fund these infrastructure projects going forward," Mr Little said.

"Governments in recognition of private enterprise's involvement need to allow - and regulators need to allow - a certain level of aggregation of service providers here to justify the very high costs and long-term returns associated with private enterprise funding of these projects.

"Unless we want to make the decision not to become globally competitive, then we have to spend that money on our infrastructure."