Posts by Fran O'Sullivan
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Russell - thanks for conceding my point.
Now to yours: The Crown was after 35 per cent of the company and outright ownership of the track in mid-2003 believing that would enable it to exert control. Little spoiled that scenario by his lightning share raid.
My point is that the Crown has already expended the thick end of a billion is buying the old Tranz Rail in three stages: Auckland Rail; the track and now the Toll NZ assets (trains and ferries) minus the profitable road business.
I think it could have played a more aggressive hand earlier and got the lot for much less than the roughly billion now spent given that it was in talks with Tranz Rail for months prior.
There would clearly have been management issues as the Michael Beard leadership had been a disaster for the company - and clearly the major shareholders behaviour - but others had circulated offering to manage the asset on behalf of the Crown in the event of a full buyout in late 2002 early 2003.
The Crown could have enabled that to take place - Tranz Rail had not honoured track maintenance assurances given at the 1993 privatisation. Pressure could have been applied.
It ended up in an effective PPP with Toll but with the access arrangements far too loose.
Cullen has said he didn't want to subsidise a foreign company to develop the rail asset - but the free premises the Government's given Toll under the deal for Tranz Link is also a subsidy.
It's the failure to execute a clean deal that worries me here.
I checked Cullen's full statements on the deal on the Beehive website just now - the rent-free deal is not mentioned. Toll made it explicit in their own press statement to the ASX.
I think Cullen can do a lot better here when it comes to transparency.
Cheers Fran
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Russell you wrote this
Fran O'Sullivan is displaying lots of wisdom after the fact today, but I don't recall her urging the government to buy the rolling stock in 2003.That's what I was responding to - not your later commentary on the Herald editorial view which clearly is not something influenced by independent columnists like myself.
I think you're being disingenous here and should just concede the point gracefully.
Fran
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Russell -
Russell
You are right hindsight is marvellous.
But check your facts. In mid-2003 when Tranz Rail finally hit the wall I was not in NZ but off doing a study tour in Europe.
So - I did not advocate buying the rolling stock at that time - as I was not reporting and commenting at this time.
What I did do was break the story in March 2001 that the Govt would face a request from Air NZ for a $500m capital injection and that the Government was considering ploughing money into a partial buyback of Tranzrail to ensure the maintenance of nationally important lines.
I don't believe you commented on this at the time but the Herald lead resulted in an outrageous front-page attack from the Independent which bought a bum steer from the airline after it was leaned on to squash the story.
So let's keep the record rolling here:-
I campaigned strongly through early 2002 over Tranz Rail's shonky accounts and again was first to raise the prospect of a Securities Commission inquiry into the accounts - which did indeed eventuate despite the heavy handed tactics from the company's lawyers to stop it.
In July 2002 I broke the story - again front-page Herald - that the Government and Tranz Rail were holding talks that may lead to the taxpayer buying the national rail track. I wrote commentaries on the renationalisation prospect which at that time was predicated on the notion that competing companies including some of the Tranz Rail's customers would get access to a state-owned track (This may yet eventuate over time if Ontrack is kept).
Post-election - August 2002 I wrote the option was now on the table among others to ensure NZ retained rail services. I also wrote a major Herald series on the mounting financial problems and whether there was a role for the Crown in rail's future.
Along the way Pam Graham took over the running story as the Herald's transport business reporter.
But by April 2003 I was writing that Tranz Rail was in crisis - the earnings forecasts were a mirage - how shareholders had not been told the truth - how Tranz Rail's advisers had suggested the valuations of some company key assets were overstated and said receivership was looming. I suggested an option was statutory management and potentially selling the rail track to the Crown.
Next story this issue not till July 2003 when the deal had been done.
So - yes hindsight is marvellous.
But so is dogged reporting and I certainly stand on my record of breaking many of the significant yarns in this saga and the subsequent insider trading investigation imbroglio.
Where were you on this???
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It was great to meet Veronica Pedrosa and Sagarika Ghose at the Asia NZ dinner with Helen Clark - it's a pity they were not exposed to a broader group perhaps a roundtable with opinion leaders not just working journalists maybe in future?
I found both journalists extremely impressive when I touched base at the Asia NZ dinner. But I was not personally in the position to fund a couple of days to get up to Auckland for the seminar - so unfortunately it was a miss this time.
One of the problems these days is that newsrooms are so denuded that journalists find it difficult to take time out to go to seminars. Even if they are interested - their bosses often have other priorities.
It probably doesn't help that Asia NZ seems to have a bias against MSM - in favour of local ethnic media and diversity - they need to get over that and work to build a bigger stage for visiting Asian journalists so that they may at least touch base with power brokers/pollies and get some feel for the country to inform their own future reporting or commentary.
This visit probably helped that.