Government urged to call Toll's bluff on rail threat

Customers of rail operator Toll are alarmed by a claim it may axe main-trunk freight trains unless the Government softens an increase in track fees.

A report yesterday - that Toll's board is developing an alternative plan to abandon major North Island rail corridors and allow roads to be clogged with more trucks - prompted a call from the Green Party for the Government to offer lower track access charges on condition that the company increase its freight volumes.

But the Road Transport Forum urged the Government to call Toll's bluff - as it did over the Australian-owned company's threat to end the Overlander passenger service - and said truck operators would be willing to step in and run their own rail freight service on the main trunk line.

"The Government must not give in to Toll's Australian standover tactics," forum chief executive Tony Friedlander said last night.

"Let it shut its main trunk freight service and allow other operators the opportunity to provide that service."

He noted that a consortium of truck firms had bid unsuccessfully in the past to buy into rail.

Toll, which also runs a large fleet of trucks, is not commenting on a report in the Independent Financial Review that it is threatening to shut down large chunks of its North Island freight operations unless it gains a rapid resolution to an 18-month dispute over access fees.

But Toll customers such as coal producer Solid Energy are nervous at the impasse.

An arbitrator, Bill Wilson QC, is expected to hold a closed hearing in about six weeks but there are fears the dispute will not be resolved without going to court.

Solid Energy chief operating officer Barry Bragg said his company was "certainly concerned about the standoff", especially given its reliance on rail to carry up to 850,000 tonnes a coal a year from Huntly to Glenbrook.

That could translate into almost 100 trucks a day on the new Waikato Expressway.

Green Party MP Sue Kedgley called for lower fees on condition Toll increases freight volumes from the 14 per cent of goods now carried on trains, and for the Government to make up the shortfall its agency Ontrack would face for operating and maintaining the national rail network.

She said that would redress an imbalance between Government spending on rail and on roads. The Government is expected to spend about $65 million on rail this year compared with $1.64 billion on state highways and local roads.

Toll paid Ontrack $52.6 million in track access charges last year compared with $41.1 million for the previous 10 months.

It is understood to be facing a bill of about $60 million this year.

Ontrack spokesman Kevin Ramshaw said his agency took the view that Toll contracted to fund the full and efficient maintenance and renewal of the rail network when it signed an agreement in 2004 giving it 66 years of exclusive access on condition that it runs services above certain minimum levels.

The company risked losing that monopoly when it threatened to end the Overlander.