Tranz Scenic buyer still confident despite shortage of funds

By DANIEL RIORDAN transport writer

Tranz Scenic's owner-to-be, Australia's West Coast Railway, is confident it can close the deal, even if funds it is seeking do not eventuate.

West Coast chief executive Don Gibson said on Thursday that his company was still seeking extra funds, but if they did not come through it "would probably" still be able to make the purchase.

West Coast is a privately owned company. Tranz Rail is taking an equity position with West Coast in the holding company that will run the passenger services, but that stake has yet to be settled.

France's Connex, which operates trains in Sydney, Melbourne and Perth, has been reported to be backing West Coast. Mr Gibson had no comment on Thursday and calls to Connex's Australian head office in Melbourne were not returned.

"I don't know where these stories come from, because we have said nothing and Connex has said nothing," said Mr Gibson. "There is further investment being sought and that's as much as we're saying."

However, when the Tranz Scenic sale was announced last week, Mr Gibson said suggestions that Connex was bank-rolling the deal "were not correct yet."

Yesterday he met Rotorua Mayor Grahame Hall and local government officials to discuss the future of the Geyserland Express, which runs between Auckland and Rotorua.

It is one of several unprofitable services not included in the sale agreement and is likely to close when the deal is settled.

Since the sale was announced on Tuesday last week, he has met Transport Minister Mark Gosche and local government representatives in Christchurch and Dunedin over the future of the Southerner (between Christchurch and Invercargill). He has also met local government representatives in Wellington and Palmerston North about the Bay Express, which runs between Wellington and Napier.

On Monday he meets Napier Mayor Alan Dick and representatives of stakeholders in the Bay Express.

Mr Gibson has indicated that to keep the Southerner going would require a subsidy of $500,000 to $600,000 for three years, and to keep the Bay Express going would take $200,000 to $300,000.

He said the subsidies would be needed until the services could be rebuilt to standards needed to make them profitable.