Government Must Not Bail Out Tranz Rail

Thursday 5 Sep 2002

The Government should stay away from Tranz Rail, ACT Transport spokesman Deborah Coddington said today.

"Tranz Rail is going through some difficulties, as most businesses do from time to time. That doesn't mean governments should use taxpayers' money to bail them out.

""The Big Four - Solid Energy, Carter Hold Harvey, Fletcher Forests and Fonterra - lobbying the Government to buy back the rail track and open it up to competitors, are taking advantage of the current climate of a more interventionist government. If they think they can talk the government into interfering - as Fonterra did when it was exempt from Commerce Commission merger regulations - they'll do their utmost to get state protection.

"Truth is there's nothing uncompetitive about the freight market in New Zealand. Deregulation opened up stiff competition from road transport and, to a lesser extent, from shipping.

"Tranz Rail is operating in a very tough market. It's also handicapped by a more protected labour market, brought about by the government's Employment Relations Act, which has fostered the attitude that running red lights doesn't merit disciplinary action.

"The best thing the Government can do is keep out of Tranz Rail's way," Miss Coddington said.

Ends

© Scoop Media