Deal done: Tasmania to buy back rail assets

Tasmanian Government and Asciano reach agreement on the transfer of the state’s rail network

The Tasmanian Government and transport infrastructure company Asciano have reached an agreement on the transfer of the state’s rail network, bringing to an end a highly turbulent relationship between the two parties.

It was Tasmanian Minister for Infrastructure Graeme Sturges who, late on Friday afternoon, announced the deal which will officially see Pacific National Tasmania become a State-owned asset again on November 30.

"There is no disguising the fact that this situation has presented a difficult challenge for us," Sturges says.

While the parties involved did not reveal how much the deal would be worth, there have been reports the Government will spend $40 million.

There was no money put aside for rail in the State Budget, however it is understood preliminary discussions between the State and Federal Governments had taken place regarding funds from the $250 million rail infrastructure package being used in the deal.

Asciano Managing Director Mark Rowsthorn, who last week guided the company to a $2.35 billion share sale deal, says he is happy with the outcome.

"We are extremely pleased to have reached this milestone," Rowsthorn says.

"An agreement with the Tasmanian Government will provide a seamless transition of our rail operations, ongoing security to our Pacific National employees and secures the future of freight in the state of Tasmania."

The Rail Tram and Bus Union (RTBU) says the deal shows rail privatisation doesn't work and should be avoided at all costs, in what could be a warning to the Queensland Government and its plans to offload part of Queensland Rail.

According to RBTU Acting National Secretary Phillip Kessey, the Asciano pull-out will place a huge burden on Tasmanian taxpayers and other states should learn from the situation.

"This is not a one-off - private operators have walked away from their responsibilities in Victorian and also in New Zealand," Kessey says.

"The Tasmanian community has been left with the choice of stranding half its state exports or stepping up and buying back the freight network - on the company’s terms.

"Surely there must be a smarter way of managing a state's transport needs than selling off vital elements of the rail network for a short-term money grab that only leads to a bad long-term economic outcome for taxpayers."

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