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'The workers are devastated ... There is a feeling that they have been cheated': Tony Sheldon, TWU. Photo: Rob Homer

The Victorian trucking company involved in a fatal tanker crash in northern Sydney late last year has lost big contracts with Shell and BP, putting at risk up to 150 jobs and wiping $131 million from its market value.

The loss has forced the Mark Rowsthorn-chaired McAleese to reduce its fuel-hauling division, Cootes Transport, which will result in it axing jobs or transferring staff to other parts of the company.

Cootes' contract to supply fuel to Shell petrol stations around the country will finish in June, ending its reign as the country's largest fuel-trucking company. Toll Holdings is set to assume that mantle after picking up the $250 million, five-year Shell contract.

Cootes has also failed to make the shortlist for BP's contract in NSW, which involves carting more than half BP's fuel to service stations in the state. The company also faces the loss of contracts with BP in Victoria and South Australia, which are up for renegotiation.

Shares in McAleese slumped 29 per cent to $1.09 on Thursday in the wake of the contract losses, wiping more than $38 million from the paper value of Mr Rowsthorn's 30 per cent stake in McAleese.

The company said it was too early to put a figure on the number of job cuts from Cootes' 1000-strong workforce, but union officials said up to 150 workers were set to go.

Two people were killed and five injured when a Cootes fuel tanker lost control on a bend in the northern Sydney suburb of Mona Vale and burst into flames on October 1. Since then, authorities in Victoria and NSW have issued Cootes with hundreds of defect notices.

The defects have included ineffective brakes, oil and fuel leaks, steering, axle, suspension and exhaust failures, broken engine mounts and tread peeling from tyres.

Transport Workers Union national secretary Tony Sheldon blamed Cootes' previous owners for not investing enough in its truck fleet, as well as the large oil companies and retailers for forcing down contract prices.

''The workers are devastated with this announcement. There is a feeling that they have been cheated,'' he said.

McAleese chief executive Paul Garaty conceded the fallout from the accident in Sydney played a role in the contracts ending but he said one of the main reasons was price.

''We are not making adequate returns on these Shell and BP contracts,'' he said.

''This gives us an opportunity to rationalise the business.''

The transport company derives about $93 million a year from the three contracts, which represent about 60 per cent of its fuel transportation revenues. Cootes comprises about 30 per cent of McAleese's total revenue.

Source: The Sydney Morning Herald