Tasmanian Government rail freight takeover

The decision was jointly announced late on Friday by Asciano chief executive Mark Rowsthorn (PNT's parent company) and Tasmanian infrastructure minister Graeme Sturges.

The announcement came after two days of negotiations involving Pacific National Intermodal divisional general manager Paul Garaty, Asciano corporate development and government relations director Helen Newell and senior Department of Infrastructure officials.

The cost of the deal was not disclosed but that was likely to become clear once a heads of agreement was signed on June 30, an Asciano spokeswoman said today.

The state government did not set aside funding in this month's state Budget to fund the takeover or invest in rolling stock which Mr Sturges said would be needed.

He had, however, intimated that federal funding might be available.

The transfer of ownership would include the Melba bulk freight line on the west coast.

The Melba line issue had initiated a threatened Asciano declaration of force majeure closure over the lack of a long-term lease of port land at Burnie.

The threat preceded the talks and had led to harsh words from the Tasmanian Ports Corporation and the state government being directed at Asciano.

"The parties said . . . that they believed that this arrangement was the best possible outcome for Tasmanian rail customers, Pacific National employees and the Tasmanian community," the announcement said.

Asciano said last year that it would withdraw from Tasmanian rail because the business was not profitable and because of the condition of the infrastructure.

An auditor-general's report last week revealed that Tasmanian derailments were seven time the national average and that track upgrades on routes which had been unchanged in more than a century had been slow to begin since funds were set aside in 2005.

The Tasmanian Greens party has said it believed the state government was putting together a local business consortium to run the network eventually.

This remained unconfirmed today.