Time to talk turkey, not tracks

By KEVIN TAYLOR political reporter

The Government's transport strategy - but not a buy-back of the rail tracks - was the subject of talks between Tranz Rail bidder RailAmerica and Transport Minister Paul Swain in the Beehive yesterday.

RailAmerica has announced a $158 million takeover bid for the country's cash-troubled rail operator. The offer is due to start on May 30, at 75c a share.

Swain confirmed after yesterday's meeting with Marinus van Onselen, the managing director of RailAmerica's Australian business Freight Australia, that options were still on the table for Government intervention in Tranz Rail.

Options range from doing nothing, to buying the track back, to giving Tranz Rail subsidies for uneconomic lines.

But Swain would not answer a question on whether the RailAmerica bid lessens the chance of the Government stepping in.

He said the important thing was to explain New Zealand's transport strategy. It took a multi-mode approach that included rail, which was considered to be a critical part of economic development.

Asked if the issue of track ownership was discussed, he said: "It wasn't ... except that they said that they had a broad view on ownership; they were relaxed about ownership."

Swain said it had to be remembered that RailAmerica was a bidder, not the owner, of Tranz Rail. "What happens now is open to the market. These are two private companies, one making an offer for another."

Van Onselen said after the meeting that he was delighted New Zealand "has such a pro-rail stance".

"In Australia, where I come from, there is not a state or a federal government that has a defined policy that is about moving freight off the road on to the railway lines.

"The primary purpose of my visit is to establish our bona fides and that our interest is as rail operators, rather than financial engineers."

Van Onselen said the issue of ownership of the tracks was touched on only in very broad terms.

"I simply wanted to impress on the minister that we have no pre-conceived ideas and that, should we be successful, we'll be happy to have a discussion with the Government with regard to that issue."

He said he wanted to impress on everyone that RailAmerica was here as rail operator, not financial speculator.

Van Onselen confirmed that RailAmerica has not bought any Tranz Rail shares.