John Key MP National Party Deputy Finance Spokesman

1 July 2004

Time for Labour to reveal true costs of rail deal

National Party Deputy Finance spokesman John Key is challenging the Government to come clean about the real size of the taxpayer risk connected to the purchase of New Zealand's rail network.

"Michael Cullen has been cagey about the total cost to the taxpayer since this deal was first floated," says Mr Key.

On November 19 in Parliament Dr Cullen told taxpayers 'if there is expenditure above the $200 million required for commercial reasons, then that is recouped'.

"Yet today, before the ink is barely dry on the deal, Dr Cullen says 'it is also likely that $200 million will not be enough to cover all that needs doing and that we might have to put up some more money in the future'.

"It is time for Dr Cullen to reveal the total projected taxpayer investment in the rail tracks. After working for so long on the deal he will certainly have advice from Treasury," says Mr Key.

"It's important for us to know why, having told us that anything more than the $200 million will be recouped, Dr Cullen now suggests that it won't.

"I'm particularly worried that Track Co will turn into a Trojan horse for vote buying," says Mr Key.

"Dr Cullen should tell us how big a part politics will play in the prioritisation of maintenance work on the uneconomic parts of the rail network."

Papers released by the National Party from Solid Energy said that the work needed on a small section of the South Island rail network was expected to cost $183 million alone.

"It's been pretty obvious all the way through that this deal was going to cost a lot more than the $200 million that Dr Cullen was admitting to - it's time for him to tell us precisely how much," says Mr Key.

ENDS

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