Govt's Difficulty Over Rail Deal No Surprise

Govt's Difficulty Over Rail Deal No Surprise

Deborah Coddington
Thursday, 5 May 2005
Press Releases - Transport

It's no surprise the Government is in difficulty with Toll NZ over the deal done on rail, ACT Transport Spokesman Deborah Coddington said today.

"Less than 12 months after the Government bought back the rail track for one dollar then gave Toll NZ exclusive access - the chief executive of Toll NZ, Paul Little, has admitted he's "unhappy with progress", Ms Coddington said.

"The deal signed last June in the dead of night barred other users from the rail track. The Government agreed to spend $200 million on improving the track - taxpayer money that would not be recoverable from Toll by way of access fees. In return Toll NZ agreed to spend $100 million on rolling stock.

"Today we find out that Toll NZ still hasn't bought any locomotives or rolling stock and the Government and Toll NZ are bickering over line maintenance spending. The Government should have sorted out these issues before it committed future taxpayer funds to what is essentially a bottomless pit.

"If Toll NZ is not prepared to put money into what they said they would, then why should they have exclusive access?

"There are other New Zealand companies prepared to buy locomotives and get access to the rail track. If the Government is going to treat the rail track like a road, then anyone who's prepared to pay the fees or spend the money should be able to drive on it.

At present the Government is hugely subsidising rail. The only beneficiaries have been the shareholders of Toll Holdings and Tranz Rail. The only way the Government can justify subsidising rail is if it is prepared to grant open access, so any operator can run trains," Ms Coddington said.

ENDS