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Truss offers $78M rescue package for Tassie rail.

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Warren Truss Minister for Transport and Regional Services Deputy Leader of The Nationals


DOTARS05/71WT 12 December 2005

Truss offers $78M rescue package for Tassie rail

The Australian Government has announced that it is willing to inject $78 million in capital funding to help save Tasmania’s beleaguered rail operations, Transport and Regional Services Minister, Warren Truss announced today.

Mr Truss said the offer is part of a proposed three-way rescue package with the Tasmanian Government and Pacific National.

“The package has been designed to keep freight trains running on the Hobart-Launceston-Burnie line for at least the next 10 years.

“This is a win-win package structured to protect Tasmanian rail services from future financial strife. It is now up to the Tasmanian Government and Pacific National to come to the party to ensure Tasmanian trains keep running,” he said.

Under the rescue plan developed by the Australian Government:







Pacific National, which owns the Tasmanian track, passes ownership to the Tasmanian Government at no cost and the State Government. The Tasmanian Government may, in turn, invite the (Australian Rail Track Corporation) ARTC to assist in the management of the rail line on a fee-for-service basis; The Tasmanian Government, as track owner, establishes an access regime open to any company or group wanting to run trains in Tasmania, not just Pacific National, and puts this arrangement in place no later than 30 June 2006; Pacific National commits to providing a non-bulk rail freight service for 10 years and upgrades its locomotives and rolling stock within three years; The Australian Government will provide capital funding for upgrading the railway line at a cost of $78 million over 10 years; The Tasmanian Government will fund maintenance costs estimated at $4 million a year plus any fees to the ARTC, to ensure the line is kept in good repair. This cost will be offset by any amount recovered from access fees paid by track users. Tasmania would need to consider the fact that PN had gifted the track in setting access fees; and Pacific National’s contribution will be at least $38 million, to be provided within three years, for rolling stock replacements and improvements.

Mr Truss said that in addition to the $78 million the Australian Government is offering, it is prepared to consider a $3.75 million contribution towards the cost of an expanded road and rail intermodal terminal at the Port of Launceston, Bell Bay.

“The Australian Government is also willing to consider contributing up to $5 million towards a proposed intermodal terminal at Brighton, as long as the Tasmanian Government matches the grant.

“Both facilities would improve train loading and unloading efficiencies and potentially allow the Tasmanian Government, the owner of the land on which the track sits, to consider the future use of the railway corridor between Granton and Hobart,” he said.


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“The proposal may also allow the Bridgewater Bridge to be converted to three road traffic lanes.

“The Australian Government has devised a realistic and coordinated plan to make rail more attractive to commercial users and check transport costs in an island state where freight charges are a sensitive aspect of doing business.”

Mr Truss said the Australian Government’s assistance package would be ratified through a Deed of Agreement with the Tasmanian Government, while the State would need to negotiate contractual arrangements with Pacific National and the ARTC.

“If the Tasmanian Government or Pacific National fail to meet their obligations, the remaining Australian Government assistance will cease” he said.

The economic modelling the Australian Government used to make its decision was based on a full 10-year projection of the commercial viability of the Tasmanian rail system.

Maunsell Australia Pty Ltd undertook an assessment of financial and economic impacts from the transfer of freight from rail to roads. Monash University estimated the impact of the rail closure on the Tasmanian economy.

Mr Truss said the assessments revealed that closure of the rail freight service would result in a negative economic, social and environmental impact on Tasmania - including the loss of 271 jobs in the short term and 548 jobs in the long term.

“The assessment showed that a shift to road transport for rail customers would increase freight rates paid by small, medium and large businesses in Tasmania by as much as $17 million a year. The road system would be able to cope without any upgrading, but would require an additional $1.1 million in annual maintenance to cope with an extra 2,000 truck movements every week.

Mr Truss said this Tasmanian rail package recognises the inclusion of the state’s mainline rail system in the AusLink National Transport Network of roads and railways.