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Tranz Rail Keen To Progress Negotiations

24 May, 2002

Tranz Rail says it will enter negotiations with the Wellington Regional Council on the possible sale of the Tranz Metro network as soon as possible.

Following today's Council decision to go ahead with a proposed Joint Venture to purchase the Tranz Metro network, Tranz Rail says it is keen to engage in negotiations to avoid the risks associated with such a venture.

"Those risks have already been identified by the local Councils and others and we are keen to progress negotiations quickly for the sake of Wellington commuters," says Tranz Rail's Managing Director Michael Beard.

"It's taken a year to get to this point and now that the Council has finally made its decision we can begin the negotiation process. We have not sought discussions with any other buyers during this time, leaving the way clear for the Council to engage with us, and we look forward to them coming to us and telling us what it is they want to purchase.

"The best outcome for the Regional Council and commuters is a long-term contract that provides the level of transparency the Council wants, and the level of service commuters require," said Mr Beard.

Mr Beard said he was a little surprised the Council had decided to pursue the Joint Venture option given the known risks of such a venture and the apparent opposition of the local Wellington Councils.

"The levels of transparency and improvements to service desired by Council - including upgrading and refurbishing passenger units - could be accommodated in a new, long-term contract. The assets involved would be placed in an entirely separate entity to accommodate any future change in ownership.

"We are entirely comfortable with providing that arrangement and the transparency desired, provided there is a Council understanding that there needs to be a firm commercial basis on which we can enter this kind of agreement."

Mr Beard said Tranz Rail would enter negotiations on the proposed Joint Venture with an open mind.

"Tranz Metro Wellington is a successful business that will carry more than 10 million passengers this year and we expect a good commercial return for our shareholders from any transaction involving this business."

Ends


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