John Key National Associate Transport Spokesperson

18 June 2003

Govt set for an expensive train wreck with Tranzrail

National is calling on the government to get around the negotiating table with Toll Holdings and nut out a deal now, rather than continue down a path that will see them squandering excessive amounts of taxpayer dollars.

"This would be inevitable later when the Government end up having to carve out a deal with the new owners of Tranzrail, Toll Holdings," says National Associate Transport Spokesman John Key.

"Its clear that institutions who hold the overwhelming majority of shares in Tranzrail are going to support the Toll Holdings cash offer, in favour of the government's bail out package. The government offer is either so vague that institutions cannot evaluate the real merits of the deal, or it contains aspects such as locking in the existing management team, which few have confidence in.

"Finance Minister Michael Cullen needs to recognise that after years of poor performance and profit downgrades, institutions want the management team at Tranzrail replaced with some proven performers like Toll management.

"Institutions are so battered by the lack of confidence in the current management team they have taken the step of writing to the Directors to warn them against breaching any of the conditions of the Toll Holdings offer or face court action.

"The message to the Government should be clear. Act now with Toll and in good faith, or carry on the way you are going and you will pay far more to gain access rights to the track later," Mr Key said.

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