Where to now for Tasmania?

By Mark Carter

After a three decade hiatus, and in a classic case of what goes around comes around, rail operations in Tasmania will soon be firmly back in the hands of the State Government.
The State’s exclusively freight rail operation was originally handed over to the Commonwealth in the mid-1970s as part of the creation of Australian National (AN) and a convenient way for the State to dispose of a loss making asset.
With the privatisation of AN in 1997 it was sold to Ed Burkhardt’s Australian Transport Network, also heavily involved in New Zealand’s Tranz Rail at the time.
Six years later and almost by default, Tasmania’s rail operations became part of Pacific National (PN) when then parent Toll Holdings took over Tranz Rail in 2003.
The PN era did not get off to a good start and it wasn’t long before the State was forced into buying back the track for the nominal sum of $1 or face the prospect of PN withdrawing services.
This was followed by a $78 million funding commitment from the Commonwealth for track upgrading, although it has always been a bit difficult to ascertain just how much of this has actually been spent.
It was still not enough for PN and a decision was made to sell off the above rail operations during 2008.
Unfortunately this process failed to produce a suitable buyer.
It is open to conjecture whether this was because PN’s asking price was too high, or that there was a perceived lack of support for the future of the network shown by the Tasmanian Government, or that prevailing economic conditions made it difficult for potential buyers to secure finance.
In June this year with major service withdrawals once again looming, the Tasmanian Government finally had no option but to agree to pay out $32 million for PN’s remaining operations, placing both above and below rail under its control.
The Commonwealth has also weighed in with a hefty $195 million contribution to upgrade a significant part of the network to make up for, in the words of Tasmanian Infrastructure Minister, Graeme Sturges “...the result of years of neglect and underinvestment by previous owners.”
Of course given the sad and sorry tale of recent years, the economic rationalists would be saying ‘why bother?’ Apart from perhaps a relatively short period under Burkhardt’s stewardship, for well over thirty years now the network has struggled to make any meaningful kind of return.
Of course what is often conveniently forgotten is that even going back to the days of AN, the network has been expected to cover its share, and sometimes more of the corporate overheads associated with a head office far removed and seriously disinterested in the Apple Isle.
Even some of my regular correspondents who can be just as rabidly pro-rail as I can  have questioned the wisdom of continuing taxpayer support.
The problem for them is that throughout the attempted sale process last year and since the announced Commonwealth bailout, the Tasmanian Government has been unable to articulate any clear vision for the network or even suggest how it will be managed into the future.
Tasmania’s rail customers have obviously lobbied heavily for retention of the network, but you can’t help but feel they are using the old agrarian socialist tactic of keeping the road industry honest by ensuring there is always a well subsidised rail network to provide a ‘competitive’ transport pricing regime.
Whatever the pressures, the rail industry can probably take some small comfort in the fact that despite the fragility of the network the Tasmanian Government could not face the politically un-palpable decision to close down the entire network.
Where it goes from here remains to be seen.
Despite recent privatisation failures the thought of a government run rail operation in Tasmania does not engender confidence either.
It would seem obvious that some form of management contract will have to be negotiated with an established rail operator - given recent events with the grain branch lines in New South Wales it could even end up being PN. Though a few bridges might have to be rebuilt between now and then if that were to be the case.
The reality is though, as one of my correspondents aptly summed it up “until the Tasmanian Government gets serious about rail, then I am doubtful of any meaningful resurrection and it will continue to be ‘groundhog day’ for rail in Tasmania.”