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“Rail Return To Foreign Ownership?”

“Rail Return To Foreign Ownership?”

“RailAmerica’s announcement of a takeover bid for Tranz Rail signals the potential return of the NZ Rail industry and its valuable infrastructure to foreign ownership and control once again, says Rail & Maritime Transport Union General Secretary Wayne Butson.

Wayne Butson was commenting on the announcement by RailAmerica of its intention to seek 100% of the equity securities of Tranz Rail Holdings the owner of NZ’s rail industry. The Union, in conjunction with the Greens Party and community groups, has been campaigning for Government to Take Back The Track to ensure the retention of the rail infrastructure asset in its current form and to prevent further decay in its standard following years of capital extraction by foreign owners. More than 46000 NZ citizens signed a petition calling on Parliament to Take Back The Track. The recent low share price and financial woes of Tranz Rail caused the Union to believe that there would be no better time for Government to act than now. It also gave us comfort that the price would be reasonable.

“In our opinion it is unlikely that any new owner will be anymore able to operate a profitable rail industry in direct competition with a subsidised road trucking industry especially now that Tranz Rail has significantly more debt than it had when first privatized in 1993 coupled with an asset which has declined in standard.”

“In order to have a sustainable rail industry into the future we must level the playing field with the rail infrastructure being placed into public ownership and control the same as the roading network. A new owner with a bigger bank balance and higher credit rating will only see the cost of doing this increase for the taxpayers of NZ.”

Mr Butson said the Union had warned Government that procrastination in Taking Back The Track would only provide an opportunity for asset strippers and opportunists to move in. “We urge Government to move now before it is too late.”

“RailAmerica’s bid may however offer a respite for our members from the uncertainty of the current financial situation with Tranz Rail and provides a measure of much needed morale boost. We have received a letter from RailAmerica which states their willingness to meet and work with us to ensure an orderly transition if the takeover succeeds”.

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