Speculation over possible Railtrack bid for management contract

By PAM GRAHAM

Speculation that US railroad operator Genesee & Wyoming is interested in a management contract if the Government railtrack buyback plan succeeds is being denied by all involved.

Bringing in a reputable rail operator would strengthen the Government plan because shareholders are tired of profit downgrades from Tranz Rail's managers. Genesee & Wyoming fits the bill, although RailAmerica also signalled when it pulled its bid for Tranz Rail that it was still interested in opportunities in New Zealand.

Like RailAmerica, Genesee & Wyoming is already in Australia. It has a joint venture with Wesfarmers that bought privatised assets. According to chairman and chief executive Mortimer B. Fuller III, the company's business is based on acquiring lines others cannot operate profitably.

The suggestion is Genesee & Wyoming is interested in a management contract and could later buy the Government out of the 35 per cent stake it acquires in the track buyback plan. The stake gives the Government three seats on a seven-seat board. It is not clear if that means bringing in managers.

A spokesman for the Connecticut company said it did not comment on speculation and Government officials said either no comment or that there had been no recent contact with the US company.