Monday, 12 May 2008

Cost of Cullen's Train Set Keeps Rising

A report in the NZ Herald this morning reveals the Government may be hiding the true cost to taxpayers of buying back the railways.

Finance Minister Michael Cullen was all smiles last week as he announced the state's purchase of Toll NZ's railway and Cook Strait ferry business for $665 million.

It now appears that Dr Cullen and his Labour-led Government have also agreed to outlay another $200 million, to repay a loan to Toll NZ's parent company in Australia.

That's on top of an agreement to give Toll NZ (which claimed to be a reluctant seller) free rental of prime depot space for the next 6 years, with rumours of substantial price discounts to retain Toll's freight business.

Some analysts estimate the Government's short-term spend on its new train set could top the $1.5 billion mark, after rolling stock and line upgrades are included.

PM Hillin Cluck this morning made a Benson-Pope-style admission on TV One's Breakfast show, saying she "can't confirm or deny" the secret loan deal. Further details are expected to emerge before the rail deal is settled on June 30.

* NZ Herald: Hidden $200m adds to cost of Toll rail deal

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