Independent MLC Mark Nevill calls for both political parties to support funds to Westrail

21/10/99

Transport Minister Murray Criddle has welcomed a statement from independent MLC Mark Nevill which calls for a commitment from the ALP to fund Westrail freight division.
Mr Nevill, who resigned from the ALP earlier this year, said the future of Westrail in Government hands looked bleak and if the ALP was going to oppose the sale it needed to put up some viable alternatives.
Mr Criddle said he was pleased that Mr Nevill had acknowledged that Westrail was under threat from private rail companies, and that a significant financial commitment was required by Government to maintain the track in its present condition.
Westrail's freight business had a debt of $617 million at June 30, 1999.
"Westrail needs to spend about $130 million on the track each year in maintenance and capital investment - and that is just to keep the track in its present condition," Mr Criddle said.
"Debt is increasing at the rate of about $6m per month and while the Opposition has said it will oppose the sale of Westrail Freight, it has not come forward with an alternative proposal if it won government.
"The ALP has never been able to say how much funding it would commit to the maintenance of Westrail Freight if it stays in government hands, or how it planned to find the money."
Mr Criddle said there were five options for the continued funding of Westrail Freight if the sale legislation did not go through.
"Those options are to increase freight rates and access charges; to allow Westrail's debt to increase; to increase taxes to fund the railway; to take money from other areas; or to close parts of the network," he said.
"As far as the Government is concerned, none of those options is tenable."
Mr Criddle said that despite vociferous opposition to the sale, none of the Opposition parties have approached him to try to develop a realistic alternative to the Government's proposal to sell Westrail Freight, or to put forward a workable solution to Westrail's problems.
"It is not enough just to oppose the sale," he said.
"Everyone is aware of the problems Westrail faces, and it is just not good enough to oppose the sale without coming up with some other options.
"Those opposing the sale should provide an alternative solution and explain to Western Australians how Westrail should be funded in the future
"We have an opportunity to attract a strong rail operator who can deliver a world class, competitive rail freight service to Western Australia.
" We expect a new operator to provide competitive freight rates and quality service, respond rapidly to customers' needs, and to attract freight from road to rail - leading to less road congestion, better road safety and less pollution.
"The Greens and the Democrats have an opportunity to make that happen, but if they vote against the proposal they will be opting for the choice that will result in more trucks on our roads, not less," he said.
Mr Criddle said that vertical integration was still the most appropriate method of sale for the Westrail freight network, despite calls for the network's sale as a vertically separated entity.
"All our advice has been that vertical integration is the way to go and the most vibrant, successful and competitive railways in the world are those in the USA, where vertical integration is the norm," he said.
"These railways operate to world's best practice in terms of service and productivity, and operate successfully in markets dominated by single long haul trains.
"The USA is also the market where on rail competition through third party rail access, commercially negotiated or mandated by the regulator, is well established and common - considerably more common than in the separated models which exist in Europe."
Mr Criddle said the vertically separated models in Europe, which were expected to encourage the transfer of freight from road to rail, have in fact seen a decline in market share for rail freight.
"That is not an experience we want to repeat in Western Australia," he said.

Media contact: Doug Cunningham 9321 7333