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Tuesday, November 29, 2005

Govts weigh future of Tas rail freight -

Govts weigh future of Tas rail freight - Breaking News - Business - Breaking News

Tasmania's freight rail service hangs in the balance as the federal government considers two reports about its viability.

The independent reports were instigated by the Tasmanian and federal governments after calls from Toll Holdings-Patricks' Tasmanian joint venture Pacific National, demanding the federal government foot a multi-million dollar bill to fix the ailing network.

Furious at Pacific National threats to withdraw its container service unless the government backed the rescue plan, Transport Minister Warren Truss and his Tasmanian counterpart Bryan Green ordered the two independent assessments.

The governments will sift through the reports, which take into account the requirements needed to keep the Tasmanian rail service operating.

"I will be working closely with my Tasmanian counterpart and Pacific National towards an acceptable outcome," Mr Truss said.

"We are aware of the urgency of the issue and hope for a resolution in the near future."

Mr Truss said he would take into the importance of freight rail to Tasmanian industry as part of a response to the issue.

The federal government discovered Pacific National's demands for $78 million in capital investment and $4 million a year for maintenance through media reports.

There was no mention of concerns over the viability of the Tasmanian rail network in meetings that Mr Truss held with Toll Holdings and Patrick Corporation earlier this year.

Mr Truss has already said Pacific National should not expect taxpayers to subsidise profitable companies.

The company bought the lease for the Tasmanian rail network two years ago.

In a statement last month, Mr Green said his government had received advice from Pacific National in February that government investment may be needed in five to seven years, and the amount was "tens of millions" less that their later request.

Federal opposition transport spokesman Kerry O'Brien said the federal government needed to accept responsibility for the mess that was created when it sold the Tasmanian rail system.

"It sold the rail system off lock, stock and barrel, and reaped some $20 million into government coffers in the process," Senator O'Brien said in a speech to the Transport Victoria Conference in Melbourne on Tuesday.

"But it forgot to put measures in place to ensure that the infrastructure would be maintained, without compromising the viability of the service," he said.

� 2005 AAP
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