Tranz Rail keeps stake in passenger sale

Friday 29th June 2001

By Christine Nikiel

Tranz Rail's sale of some of its Tranz Scenic passenger services to an Australian company will involve it keeping a financial stake in the operations.

Locomotives, some stations and rail workshops, rights to five of the existing nine passenger services and charter rights over the whole rail network will be sold to a holding company owned by Victoria-based West Coast Railways and Tranz Rail.

"Tranz Rail sees the financial benefits of a long-distance passenger service run by specialist operators and will, therefore, retain a positive financial investment in the new holding company," managing director Michael Beard said.

But Tranz Rail would not play an active management role and continued involvement would ensure effective co-ordination on issues such as track access.

"Tranz Scenic will benefit from being run by a specialist operator which is committed to making the business a star performer," he said.

Proceeds from the sale will cut Tranz Rail's debt of $450 million by $20-30 million. Mr Beard said the deal could provide enough cash for the company to invest more in the rail network.

Services to be closed are the Geyserland Express (Auckland to Rotorua railcar), Kaimai Express (Auckland to Tauranga railcar) and the Waikato Connection (return daily railcar service Hamilton to Auckland), which are not part of the sale agreement.

West Coast Rail has bought the Northerner and Overlander between Auckland and Wellington, the Tranz Coastal service between Picton and Christchurch, the Tranz Alpine between Christchurch and Greymouth, and long-distance Wellington to Palmerston North service Capital Connection.

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