Delight as Government picks up rail deal

The Government is to buy the lease for the Auckland rail network - to the delight of local mayors.

Finance Minister Michael Cullen and Transport Minister Mark Gosche announced in Auckland yesterday that the Government was taking over negotiations with Tranz Rail for access to Auckland's rail network for public transport.

The decision has thrilled local mayors because it means they no longer have to find the $112 million they agreed to pay Tranz Rail for access to the western rail lines and the local leg of the main trunk line.

It also means that $30 million committed to the Tranz Rail deal by Infrastructure Auckland can be spent on tangible assets like new trains or better bus services.

Dr Cullen said $112 million was too high. The Government would negotiate a price "substantially less."

He said the Government wanted to ensure the strategic integrity of the Auckland rail network, but that did not indicate an intention to take over the lease of the entire national rail network. "And there is no way the Government plans to get back into the rail business."

Once a deal is struck with Tranz Rail, the Government will sublet the lease to Auckland through a local authority trading enterprise the councils are setting up to own and run rail services.

After being briefed on the proposal in Auckland by Dr Cullen and Mr Gosche, Tranz Rail spokeswoman Sue Foley said the company was comfortable with the new position.

The chairwoman of the Auckland mayoral forum, Auckland Mayor Christine Fletcher, and the Auckland Regional Council chairman, Phil Warren, were grinning from ear to ear at an informal press conference, with Dr Cullen and Mr Gosche, to announce the proposal.

Mrs Fletcher said.

nteThe councils have until April 10 to approve the proposal and have assurances from the Government to stick to existing time-frames so it can wrap up a deal by June. The Tranz Rail contract to run Auckland rail services expires in June 2003.

Auckland councils have been negotiating with Tranz Rail since last June. They initially agreed to pay $65 million upfront, plus $2.25 million to $4.25 million a year to Tranz Rail for 70 years for access to the main trunk.

The councils agreed before Christmas to pay Tranz Rail $112 million for control of all the Auckland lines.

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