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Government Paid $70m Too Much for Rail Lines

The Labour Government paid $70 million too much for the Auckland suburban rail lines, ACT’s Transport Spokesman Deborah Coddington revealed today.

“ACT has obtained documents that show the Government received a valuation of the Auckland suburban rail lines from Grant Samuel of between $10 million and $20 million,” Miss Coddington said.

“Despite this Labour paid Tranz Rail $81 million plus GST.

“This is an outrageous abuse of taxpayers’ money and one of the reasons why governments should have absolutely nothing to do with buying or running a commercial enterprise.

“I doubt Dr Michael Cullen would buy a toy train set for $80 when it’s only worth $10 or $20.

“But when it comes to Other People’s Money, he’s quite happy to spend up large.

“And if that wasn’t bad enough, Dr Cullen knew he was paying too much. His letter to Tranz Rail says it ‘will be hard to justify publicly’.

“Now neither the Auckland Regional Council nor the Government know what to do with the lines. So Tranz Rail continues – at a profit – to run the trains. It has taken the $81 million of taxpayers’ money and, I would think, is laughing all the way to the bank.

“This is a prime example of what happens when governments pick winners and bestow favours on selected industries. Corporate welfare is what this is called,” Miss Coddington said.

“I shudder to think how much Labour is willing to pay to buy back the whole network. Dr Cullen should announce immediately what this Government’s plans are for Tranz Rail.”


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