By FRAN O'SULLIVAN
Finance Minister Michael Cullen has called a temporary halt to lobbying efforts by Tranz Rail's major users over the long-term future of the national rail network.
The move comes as the Treasury keeps a watching brief on Tranz Rail as the transport giant prepares to unveil a major financial loss tomorrow.
The Rail Freight Action Group - which comprises some of New Zealand's largest exporting companies - has been lobbying politicians to gain support for a Government buyback of the national rail network.
The group - Carter Holt Harvey, Fletcher Challenge Forests, BHP New Zealand and state-owned Solid Energy - wants rail freight to be a robust and cost-efficient part of the future transport mix.
But Dr Cullen has officially put the issue on the back-burner until the Cabinet committee structure is finalised before talks on the place of rail in NZ's land transport strategy.
Tranz Rail is in virtual siege mode: it faces a potential credit rating downgrade, hefty increases in banking charges, investigations by the Securities Commission and the Stock Exchange's market surveillance panel and a credibility issue with shareholders.
Tranz Rail has indicated it will forecast earnings before interest and tax of $26 million for the June 30 year but this will move to a significant loss after interest costs, tax and asset writedowns of $140 million to $170 million are accounted for.
In the first of a three-part series, the Herald today discloses the extent of the dissatisfaction of Tranz Rail's major customers.
Tranz Rail chief executive Michael Beard has defended his company's decision to increase the prices it charges its big customers.
He says the changes he put in place, including the previous round of price rises, were necessary to avert a path towards bankruptcy.
Cullen seeks breathing space over rail network
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