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PN threatens to break up Tasmanian business

Pacific National locked in a fight with the Tasmanian Government which could see the rail market blown up

By Jason Whittaker

Pacific National is locked in a fight with the Tasmanian Government over rail infrastructure and unpaid maintenance costs which could see the State’s rail market blown up.

The Asciano-owned rail provider, which has already put the Tasmanian business on the market, has confirmed it has “entered into a formal dispute” with the Tasmanian Government over money it says it is owed for maintenance costs.

A document released to the Greens under freedom of information laws last week stated Pacific National is owed half a million dollars.

But it also revealed the company had stopped investing in rail infrastructure, as an agreement signed with the Government requires it do, due to the dispute.

Asciano says it still wants to sell the business as a going concern, but threatens to break up the venture if it cannot reach a resolution with the Government.

“The successful transition of the business to a new owner will be dependent on whether Pacific National can resolve certain issues with the Tasmanian Government,” a statement released to ATN reads.

“The sales process is continuing at this stage and we are optimistic that any current impediments can be resolved. However, in the event that agreement cannot be reached and the business cannot be sold the company will be forced to consider other mechanisms to dispose of its Tasmanian rail interests.”

The State Government has been attacked by opposition parties for letting Pacific National walk out on the State amid questions over whether the Government has met its own obligations to upgrade infrastructure.

“Pacific National does have concerns around the state of the rail infrastructure and is disappointed at the Tasmanian Government’s failure to fulfil its obligations regarding its capital works program funded by the Australian Government,” Asciano says.

“As part of the rail rescue program, which included significant expenditure by the Government to upgrade the track, Pacific National agreed to a rolling stock upgrade program provided that it continued to have sufficient customers to justify the capital expenditure.

“Pacific National began investing in its rolling stock as required as soon as the agreements with Government were in place.”

But the provider says due to a loss of freight volumes and a significant customer contract it was forced to reduce its investment “in line with the terms of the agreement”.

“PN has failed to achieve a satisfactory outcome with the Tasmanian Government to date and as a result is using the provisions in its agreement with the Government to ensure these critical issues are raised at the appropriate level,” the statement says.

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