Glimmer of hope on $300m rail obstacle

By GEOFF CUMMING

Secret talks to gain access to Auckland's rail tracks for rapid transit are close to stalemate as a crucial deadline of May 25 looms.

Regional transport planners were downcast last week after suggestions of a $300 million asking price for Tranz Rail to hand over control of some of its track corridors.

This is 10 times the value put on the corridors by the region.

However, officials were more optimistic by the weekend after indications that Tranz Rail remained flexible.

The issue is pivotal to Auckland's bid to build a rapid transit network on the rail corridors to head off gridlock. Government mediator Jeff Todd stepped in after Transport Minister Mark Gosche met both sides last week.

The region, represented by Infrastructure Auckland, wants to assume control of the western and southern rail lines to run fast, frequent passenger services, with light rail its preferred option.

It wants Tranz Rail to "assign" its 80-year lease of the corridors to the region so that a competitive bidding process can take place.

"The region wants other operators to bid for services to ensure it gets the best quality system at the best possible price," said one official.

But Tranz Rail continues to push for a services agreement where it would run fast electric trains to the CBD from Manukau and Henderson.

All parties refuse to publicly discuss the "commercially sensitive" negotiations, which have already been extended once, from March 31 to June 30.

Mr Gosche, who had a bird's-eye view of morning congestion woes from a helicopter on Friday, said he expected significant progress by May 25, the date set for an agreement in principle between the parties.

"I understand how negotiations work and this is not good enough for the length of time," he said.

"It's a long way down the track for them to be that far apart. They should be within inches of each other.

"[$300 million] is probably hard to understand when you look at the value of the company and I said that to them.

"The view [from the helicopter] confirms the need for a public transport system. It just stands out so obviously because you have got clogged motorways and a near-empty rail system that needs to be utilised," said Mr Gosche.

"We will be considering our position if progress has not been made by [May 25]."

Options for the Government if the impasse remains include legal action under the Commerce Act to challenge Tranz Rail's monopoly. But it is feared that a drawn-out legal process, and likely appeals, would delay progress on rapid transit for at least two years and cost millions.

The Prime Minister's adviser on Auckland issues, Judith Tizard, has talked of legislation as another Government option.

Tranz Rail updated officials on its services proposal on May 1 but sources say it contained little that was new.

An analysis obtained by the Herald reveals regional concerns about high operating subsidies and excessive profits for the company.

Its proposal excludes light-rail services from the tracks, at least until a new rail link is built between Avondale and Southdown so that freight trains can bypass the western line.

Infrastructure chief executive Richard Maher, negotiating on behalf of the region, said he wished to maintain confidentiality.

Tranz Rail officials also declined to comment.