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Lot at stake for taxpayers and road users in rail

Media statement Thursday, October 5th, 2006

Lot at stake for taxpayers and road users over road/rail freight options

Business and taxpayers will be concerned about the impact of Toll switching freight from rail to road in the event Ontrack and Toll don't reach agreement over the proposed $60m rail access fee, the Employers and Manufacturers Association (Northern) says.

"Any agreement over the cost of rail access has to be commercially sound," said Alasdair Thompson, EMA's chief executive.

"However there are broader considerations since a switch from rail to road would shift both income and costs to the road owner, Transit New Zealand with a big impact on road users.

"Ontrack would lose a big chunk of revenue, and with more trucks on the roads, revenues from road users would increase but so too will the costs of road maintenance and capital to increase their capacity.

"The government on behalf of taxpayers owns both state highways and the rail network managed by Ontrack; it would be financially affected by the revenue loss to Ontrack with an increase of both revenue and costs to Transit.

"Clearly Toll would not have made its views public were it not seriously looking at switching freight from rail to road on the basis that for them and their customers it would be cheaper to do that than pay the level of access fees proposed.

"Putting rail freight onto roads could be costly for business and consumers if it led to higher freight costs; the ministers of transport and finance on behalf of taxpayers have a lot at stake."

ENDS

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