Tranz Rail keeps refrigeration business

The refrigerated road freight business was one of a number the company decided to put up for sale, including its passenger rail services.

However chief financial officer, Mark Bloomer, says since there have been a number of developments and initiatives which have created interesting new opportunities for the business and enabled the company to provide a more comprehensive transport solution for its customers.

"After consideration of these factors, the company believes that it is able to extract greater value by retaining this business."

Mr Bloomer says the refrigerated road services will be integrated with the company's distribution business.

Meanwhile discussions have progressed with potential buyers of the Tranz Scenic long distance passenger business and the company has compiled a short list of three buyers.

Tranz Rail is also awaiting discussions with the Government over the purchase of the Auckland rail corridor.

Mr Bloomer says the Government, which plans to take over negotiations from the Auckland Regional Council, has agreed to fund the transaction but wants to revisit the price.

"The company believes the price has been reasonably determined following a commercial negotiation with the Auckland Regional Council. However, at this stage it has not commenced detailed discussions with the Government in this regard."

Discussions with the Wellington Regional Council with regard to the potential sale of the Metro passenger rail business have been suspended until the Auckland situation is resolved.

Tranz Rail also says it is reviewing the scope of its operating network to ensure only profitable sections are being operated.

The company says it is likely that certain lines will shortly be closed or mothballed which will enable resources to be redirected to more profitable areas.

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