Clark bans rail-deal talk

By FRANCESCA MOLD political reporter

Helen Clark has banned ministers from commenting about a rumoured multimillion-dollar deal to buy back the national rail track after sharp rises in Tranz Rail's share price.

The Government and Tranz Rail moved quickly yesterday to shut down speculation about a deal as the transport operator's share price climbed 11.4 per cent to close at $1.37.

This was on top of last Friday's 11 per cent rise, after Transport Minister Paul Swain said he was determined to solve the problems plaguing the rail commuter system this year. He also reportedly said that buying back the tracks was high on the Government's agenda.



Last year, Tranz Rail shares fell 68 per cent, but they are already up 29 per cent this year.

The Prime Minister gave ministers a stern warning to keep quiet about the issue, reminding them that last year her comments about the future of Air New Zealand led to a rise in the share price and resulted in a slap on the hand from the Securities Commission.

"It would be better if less was said," she told ministers at a Cabinet meeting yesterday.

Tranz Rail also issued a statement to the Stock Exchange firmly denying speculation that the Government had made an offer of between $120 million and $150 million for the rail track.

"Tranz Rail has not, in fact, received any such offer from the Government in any shape or form," the company said. "To our knowledge, no such offer is imminent."

Tranz Rail said discussions about the company's role in the Government's land transport policy were at a preliminary stage.

"Whether that role is consummated by a track sale and purchase is one of a number of options that may or may not be subject to further discussions."

Helen Clark said an ad hoc committee, headed by Finance Minister Michael Cullen, had been set up to look at rail issues.

The Government wanted New Zealand to have a viable rail service and there were several ways of achieving that. But there were too many risks to discuss what the Government's options were, she said.

Helen Clark said too much had been read into Mr Swain's comments. "The speculation of last week isn't helpful at all and really the Government and Tranz Rail are just going to get on with discussing the kinds of things they've been discussing for quite a while to try and make sure of the survival of the rail service."

* Heat restrictions causing mayhem on Wellington's railway tracks will start being lifted from Friday.

The Land Transport Safety Authority ordered Tranz Rail last March to slow all passenger trains to 40km/h when tracks heated to 30C-40C, after a series of derailments caused by heat-buckled lines.

Authority spokesman Andy Knackstedt said Tranz Rail had produced details of the state of Wellington's railway tracks and the authority was now confident that at-risk areas had been correctly identified.

Tranz Metro spokeswoman Helen Keyes said restrictions would be lifted from 70 per cent of track deemed not at risk of heat buckling.

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