Track deal due next month

By PAM GRAHAM

The track deal that sets the rules of engagement between the Government and Toll Holdings-controlled Tranz Rail is now due next month.

"It's a huge task putting in place the framework for the conduct of the parties going forward," said Toll managing director Paul Little.

"It is progressing satisfactorily and I would think it would be concluded some time in May."

Chris Mackenzie, the Treasury official in Finance Minister Michael Cullen's office dealing with negotiations, said they were continuing but would not go beyond June 30.

A new track owning company is due to take over on July 1 and the board and chief executive have not been named.

"As long as that timetable is kept I don't think anyone has got anything to be concerned about," said Little.

Land near the track was a complex issue being worked through, he said, but "for us, it's more about making sure that the access regimes are adequate for the Government and for us.

"That is where there is a lot of time and effort at the moment," he said.

Under the initial deal with Toll announced last year, the Government is to buy back the track for $1 and also buy assets associated with it.

It will invest $200 million on the track over five years and Toll will invest $100 million in rolling stock.

An access fee recovers infrastructure costs and can be reduced if traffic increases.

Tranz Rail can lose exclusive access if traffic falls below 70 per cent of current levels and will have a director on Track Co.

Major customers are watching to see where the money goes.

Solid Energy wants it spent on the coal route from the West Coast to Lyttelton, which is also being scrutinised by the Land Transport Safety Authority.

Little said freight would not switch to rail unless the infrastructure was adequate.

"Someone has got to stand up. Someone has to be prepared to spend the money."