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Tranz Rail Statement - Michael Cullen


“The exchange of letters concluded between the Crown and Tranz Rail is a sign of the good progress being made in negotiations over the Auckland rail corridor,” Finance Minister Michael Cullen, Transport Minister Mark Gosche and Tranz Rail Managing Director Michael Beard announced today.

The letters cover the principal terms agreed between Tranz Rail and the Crown achieved in the negotiations so far. A number of aspects of the transaction have changed from those previously discussed with the Auckland Region. The parties have also agreed to consider changes to Tranz Rail's master lease.

“The Government stepping in to help the Auckland Regional Council complete the transaction has enabled the scope of the discussions to broaden beyond the Auckland metro corridor. For example, we have agreed to consider changes to Tranz Rail’s master lease. This will assist Tranz Rail with other strategic initiatives,” Mr Beard said.

Progress to date includes:

- The lease and infrastructure assets would be sold for a price of $81 million.
- Tranz Rail would retain responsibility for train control and maintenance for at least five years, in return for an annual contribution to Tranz Rail of $2.85 million.
- Auckland region councils would be able to purchase Tranz Rail’s existing Auckland commuter trains for $3 million.
- Tranz Rail will retain certain rights, including from advertising revenue.

“A deal on these terms will achieve the Government’s objectives. It provides Auckland with the rail corridors required for a rapid passenger transit system, and preserves the integrity of the rail network and the freight link to Northland,” Ministers said.

“We expect to conclude an agreement by early December with settlement including payment to occur as soon as practicable after” they said.


ENDS



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