Tas, $32m to take Tasmanian rail network public
Tas, $32m to take Tasmanian rail network public
Matthew Denholm | July 02, 2009 , Article from:  The Australian
TASMANIAN taxpayers will spend $32 million to bring the state's rail network back into public ownership in a deal aimed at preventing the system's dismemberment by troubled owners Asciano.
Under a heads of agreement, Asciano's Pacific National Tasmania rail business -- locomotives, rolling stock, equipment and buildings -- will be sold to the state government for $32m and handed over by November 30.
The public takeover was the last resort for the Bartlett government; it follows a long stand-off in which Asciano threatened to close lines -- including a vital service to West Coast mines -- and conduct piecemeal asset sales.
"We've got a good price -- it's a good price for Tasmania because it means rail will continue, it means the mining industry will continue, it means we can ensure we don't have excessive numbers of trucks on our highways," said Infrastructure Minister Graeme Sturges.
While the opposition parties did not oppose the move or question the sale price, which was roughly that anticipated, they questioned how the sale would be funded.
"Tasmanians deserve to know," said Liberal deputy leader Jeremy Rockliff.
"Will existing services be cut to pay for it?
"Will maintenance money be diverted, further jeopardising the rail safety and reliability? Will the government borrow the money?"
Mr Sturges ruled out using any of the $250m maintenance and upgrade funding in the state budget forward estimates -- including $210m of federal money -- to fund the sale.
He would not rule out borrowings, but said his department and that of the Premier were working with Treasury on options to find the $32m, which was not allocated in last month's state budget.
Mr Sturges said the federal government had agreed to allow its $210m to be used flexibly in terms of the maintenance and upgrading priorities, but this did not extend to funding the purchase.
The Greens said the government should have made provision for the purchase in the budget, but Mr Sturges said it had initially been led to believe by Asciano that a pullout from Tasmania was a year away.
Under the sale agreement, the vital Melba line assets, taking mineral concentrates from the West Coast mines to the port of Burnie, will be transferred to government ownership four months earlier than other assets, on July 31.
The shiploading facilities at the port will also be transferred at this earlier date.

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