KEY POINTS:
A $175 million windfall in power company profits could help the Government buy back the national rail service.
Finance Minister Michael Cullen said yesterday the special dividend from Meridian Energy would be used for capital purposes - potentially the purchase of the rail and Cook Strait ferry operations of Toll New Zealand.
The state-owned company announced the dividend on top of a $60.9 million interim dividend.
The extra money comes at a good time for the Government, which is in negotiations buy back Toll's rail and ferry assets.
Dr Cullen said the Meridian money would be used for capital expenditure of some kind - such as "trains and boats and planes".
It is not the first time Meridian Energy has come forward with a big sum of money for the Government at an opportune time.
In 2006, the Government used the proceeds of an $800 million special dividend from the power generator to help pay for a big transport package in that year's Budget.
Dr Cullen said the Government and Toll were closer to agreeing a price for the rail and ferry business.
He confirmed a fortnight ago the Government had made an offer for Toll's rail and ferry business, but the Crown and company remained more than $200 million apart on agreeing a fair price.
Dr Cullen said negotiations at the weekend had seen the two parties move closer together.
"We're not as far apart as we were a week or so ago, by quite some margin," he said.
"I wouldn't want to say it's imminent, but as I say I think we're a lot closer than we were a week or so ago."
Dr Cullen said he expected to discuss the issue on the sidelines of a function he and Toll's chief executive would attend on Thursday evening.
The Government is expected to make Toll start paying the full price of access to the rail track network, which the Government owns.
Toll has been paying about $48 million a year since an access deal was struck in 2004.
The Government has been picking up the shortfall of about $10 million needed to maintain and improve the tracks.
Improving the rail system is central to the Government's plans to curb greenhouse gas emissions.
- NZPA
