Port and rail assets firm Asciano Group (ASX: AIO) is competing for all three parcels of the the mineral resources co-operative CBH Resources Limited (ASX: CBH).

Managing director Mark Rowsthorn of Asciano said the company wants the contracts because of the “iron ore and other minerals in West Australia... It's all of QR's existing bulk markets that we've never really participated in and (that's) where you'll see us put in a lot more energy into chasing those markets.”

The Queensland Rail (QR) National, through subsidiary Australian Railroad Group, currently operates the rail services for grain in West Australia. The privatization of Westrail in 2000 brought ARG to provide the transport services for grains.

An estimate of $100 million worth of grains a year would need to be transported from Australia's second largest state. A ten-year contract would be worth around $700 million.

CBH will be awarding the contracts by the end of 2010. Heavily investment spending are expected from the winner of the bidding because CBH wants to increase the total freight delivery capacity on rail from the current 50 percent to 70 percent.

Asciano or ARG could be fortunate to have any of the five to 10 year contracts. Asciano aims to get at least 20 percent of the rail market share in Queensland within the 2010-2011 financial year.

Article Correction: An earlier version of this report incorrectly stated that Argo Investments Limited (ASX: ARG), instead of Australian Railroad Group, is a subsidiary of Queensland Rail (QR) National. Argo Investments Limited is an investment company listed on the Australian Securities Exchange and is not and never has been a subsidiary of Queensland Rail (QR).