Buyers line up for passenger rail

Tranz Rail's move to rid itself of passengers is about to get its first big shunt, with tenders closing today for its long-distance train services.

As many as 10 overseas and domestic companies are understood to be interested in buying the eight Tranz Scenic services, which are being offered in one package by Tranz Rail. It called for expressions of interest last October.

About 10 parties are believed to have been through the due diligence process which entitled them to look closely at Tranz Rail's books.

A sale announcement could be made within three weeks.

Companies touted in the media as interested include: Transdev, a unit of state-owned French finance house Caisse des Depots et Consignations; local bus operator Guthreys Coachlines; Australian rural rail operator West Coast Railways; and unnamed parties from the US, UK and Europe.

The Tranz Scenic package includes the daily Northerner and Overlander services between Wellington and Auckland, the Wellington-Napier Bay Express, the Auckland-Tauranga Kaimai Express, the Geyserland to Rotorua, the Southerner main trunk service between Christchurch and Invercargill, the Tranz Coastal between Picton and Christchurch, and the Tranz Alpine from Christchurch to the West Coast.

These last two scenic services are seen as the stars, as Tranz Rail regards them as premium rides offering high-class trips for tourists.

They are in a high-value market compared with the other long-distance services, which compete head on with air and road transport, a battle which rail has been losing for decades.

Tranz Rail claims its Tranz Scenic services carry 465,000 passengers a year, providing revenue of $20 million to $30 million. Profitability figures are not available.

The package on offer includes between 10 and 15 DC class locomotives, 57 carriages and 50 second-hand former British Rail Intercity carriages, which are awaiting refurbishment at Woburn railway workshops in Lower Hutt.

Also on offer, if wanted, are the Christchurch, Palmerston North and Hamilton railway stations.

About 100 Tranz Rail staff employed specifically on Tranz Scenic services are expected to be taken on by the new owner.

In its bid to concentrate solely on its more lucrative freight business, Tranz Rail also wants to dispose of its Wellington and Auckland commuter rail services.

These include the units on the Hutt, Kapiti and Johnsonville lines.

- NZPA