Toll could hold up Alstom asset sale

By PAM GRAHAM

New Zealand asset sales by troubled French engineer Alstom could be blocked by rail operator Toll.

Alstom, which is selling the New Zealand operations as part of a rescue plan devised by European governments and bankers, maintains Toll locomotives and wagons as well as Auckland's passenger trains.

But Toll NZ effectively has sign-off rights to the sale and can revoke its contract if it does not like the new owner.

"Toll has the ability to say, 'Sorry, we don't like who is buying you'," said Alstom's New Zealand chief, Mike Yeoman.

Alstom's local transport arm will be sold with its Australian transport operations. Together they have about A$1.5 billion ($1.64 billion) of work on their order books.

The New Zealand contracts are worth several hundreds of millions as the biggest locomotive contract still has five years of a seven-year term to run.

Prospective buyers include General Electric, Downer EDI and Australian engineering firm Goninans.

All were bidders when Toll's predecessor, Tranz Rail, awarded the contracts to maintain most of its locomotives and wagons to Alstom two years ago.

But Toll may also be interested in bidding as the company does not have a history of bringing in outside contractors. It has pledged to invest $100 million in rolling stock in New Zealand.

Expressions of interest in the operations will be sought about October.

Toll NZ declined to comment on whether it would be interested.

The Rail and Maritime Transport Union is taking a wait-and-see view and expects the biggest impact on workers to be a new name on their overalls.

Secretary Wayne Butson said the union had helped to choose Alstom when the work was first outsourced and, as part of that process, it had met many of the other potential owners.

Alstom NZ

* Alstom has two business units in New Zealand - Transport and Power.

* Alstom Transport Group maintains, services and overhauls diesel-electric, electric and shunt locomotives and diesel multiple units for Toll NZ. It also provides maintenance services for Toll's freight wagons.

* Alstom Power Group is the largest provider of maintenance and refurbishment services to energy generating companies in New Zealand.

* The combined units employ 450 people and forecast revenue of $70 million this year.

* Alstom sold its transmission and distribution unit in January to French company Areva. The New Zealand unit's business includes maintenance contracts for Telecom's networks.