Hon Roger Sowry MP National Party Energy Spokesman

23 June 2004

Coal route review highlights risk in rail

"National Party Energy spokesman Roger Sowry says the KBR review of the South Island Coal Route released today by LTSA is hugely worrying for the taxpayer and should be of great concern to the Government.

The review finds 'the Coal Route is currently fit for the tonnage it is carrying. However, the increase in axle load and overall tonnage over recent years, the present maintenance philosophy, and a lack of technical resources and finance make it unlikely that it can remain fit for purpose beyond the immediate future (say, two years). There is a backlog of maintenance and renewal work and there is a proposal to double the tonnage of coal which is hauled on the route.'

Last year, National released the costings of maintaining the coal route in a fit state for its current tonnage of traffic obtained from Solid Energy under the Official Information Act.

"It put the basic maintenance cost at $183 million, with up to $50 million required in urgent deferred maintenance work.

"When you lay today's review and last year's forecasts side by side they raise real concerns about the claims made by Dr Michael Cullen about how much taxpayers will be expected to contribute to maintaining and upgrading the rail track network," says Mr Sowry.

Dr Cullen has said he will sink $200 million into the entire national network over the next five years.

"Given the estimates, Dr Cullen's figure looks far too light. It would appear to be barely enough to maintain the network in its current state, let alone upgrade it.

"The Finance Minister believes he will be able to convince Toll (the network user) to meet the future costs. These costings, and the issues uncovered by the KBR report may explain why the current negotiations with Toll are not progressing well," says Mr Sowry.

ENDS

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