Sowry Roger: Urgent Debates — Tranz Rail 
Text is incorporated into the Bound Volume 
Sowry Roger: Urgent Debates — Tranz Rail 
[Sitting date: 10 June 2003. Volume:609;Page:6077. Text is incorporated into the Bound Volume.] 
Hon ROGER SOWRY (Deputy Leader—NZ National) 
: 
 This is not a good deal for taxpayers. It might be a good deal for large users because large users will receive a subsidy. Whether it is a good deal for large users will depend on the amount of subsidy they receive and the trade-off of that subsidy versus the right of competitive access that they so much wanted. It is ironic that this may be a good deal for shareholders. If the Government is to be believed had this deal not gone ahead the company might well have gone into liquidation and the shareholders would have been exposed to the risk that they took by being shareholders. But the Government has effectively decided to try to bale them out. This is certainly a good deal for the Government in its sort of sneaky manipulation of the Greens. It can say to the Greens that it has bought rail for them so therefore they can support it on some roading legislation. This deal will most certainly work to help the Government buy the Greens off. 
However for taxpayers to put $44 million into Tranz Rail now—that money is already sunk into the company—and for the Government then to say to them that it has sunk the money into the company and may or may not get a deal next month and if it does not it hopes the company will pay it back is a bad deal. For taxpayers to be exposed by the Government’s reckoning to $100 million worth of maintenance for the track is a bad deal. We know that before the deal was even signed within hours of it being announced in a hotel in Wellington on Friday the Government was saying that it accepted that $100 million might not be enough for the track maintenance. Extraordinarily in question time in the House today the Minister said that he did not know how many bridges there were on the West Coast and he did not know how much it would cost to keep that line open. At the end of the day if the Minister wanted to keep a line open he could always have done that through a subsidy. He did not need to own it. 
I have heard the Green United Future and Labour MPs say that this deal is wonderful and that we now own the rail corridor again. But we have always owned the rail corridor. We have always owned the land that the rail corridor was on but we did not own the tracks. The Government has bought the tracks back with all their maintenance problems and it has no idea how much money will be spent on maintaining them over the next 5 years. But I predict one thing— 
Janet Mackey 
: The member is making that up. 
Hon ROGER SOWRY 
: Can the member for Gisborne tell me how much the Government will spend on that in the next 5 years? She does not know. How much maintenance will be required to keep the Gisborne line open? Does the member know that? The member does not know that either. The member knows very little. 
 I want to say—[ 
Interruption 
] I thank you Madam Deputy Speaker for your assistance in keeping interjections down as usual but we have given up on expecting that to be done. 
I say to the House and to taxpayers that this is a bad deal for taxpayers. They will be exposed to payment of all the maintenance costs. Already we have Jim Anderton out there saying this deal is great and the Government will keep the Gisborne line open. What a load of nonsense that is! The Gisborne line will be kept open only if the Crown subsidises the users of that line. That is what all the companies that use the Gisborne line are saying. So the Government is to subsidise the users but the taxpayers will wear the cost of maintaining the track. That is a double-banger of a subsidy. The operator whoever that may be will operate in a risk-free environment. It looks as though the operator will be Tranz Rail. It certainly will not be Toll Holdings because Dr Cullen is out there insulting it as though his life depends on that. So we know the operator will not be Toll Holdings. 
The operator will operate in a risk-free environment and if the operator wants to achieve a turn-round and put more goods on to a particular line then the operator will just wind up the political pressure so as to try to keep that line open. 
I say to the member from Gisborne who is trying to interject that she will be up there saying that this deal guarantees that people will use the line. I know the people in Gisborne who want their goods transported have said that they will not use the line unless it is more economic to do that than to use trucks. That is what the forestry operators are saying and they will want a subsidy in order to use the line. That is why this is a bad deal for taxpayers. They will be sinking hundreds and hundreds of millions of dollars into the subsidisation of rail—money that will not be going into schools and hospitals or into the many other infrastructural projects that we need around this country. The Government has to realise it can spend the money only once. 
Not only is that the case but we must ask what sort of deal this is. The Government will pay about $75 million for 35 percent of the company and will have only three of the seven directors on the board. So the Government will not control the board but will be exposed to 100 percent of the risk. This Government has decided that this is a really clever deal—after polling and deciding that New Zealanders overwhelmingly want the Government to own the rail corridor. And it does. That has always been the case but New Zealanders thought the rail corridor was sold along with the tracks. The tracks were sold but the corridor was not. So having done the polling the Government has decided that the clever thing to do is to put $75 million in to end up with a bit over one-third of the company but not with control of the board and to end up with 100 percent of the risk—all the track maintenance and all the subsidy costs. That is a very stupid deal. 
On top of that we have an operator that is ready to come in and operate on the tracks. What did the Government do to that operator? Well the Government met it and then sort of did not tell it the full story. Then Dr Cullen “lost” it—he blew his “fufu valve”—just as we see in the House on a regular basis except that this time he was sitting in his Napier house at the weekend. His eyes became all bulgy and the odd-coloured polo shirt he was wearing was nearly bursting open at the seams when he launched into an attack on Toll Holdings and said there was no way that he would trust that company again. Well actually representatives of Toll Holdings came over here to New Zealand. They met with Dr Cullen and said they wanted to do a deal. He did not tell them the full story and then he blew his “fufu valve” when they rightly said they did not know the Government would do this deal and that they would have been prepared to enter into some sort of partnership. But Dr Cullen just “lost” it. With that he lost one potential operator for the track. 
Now the only rail operator left is the current operator. This sounds really smart! The current operator—which has done such a good job in the Government’s view that it had to be bailed out—will now wear no risk. All the rail users will be entitled to subsidies if they can put enough political pressure on the Government.