Re: FreightCorp sale is official.

[Greg Rudd <grudd@mail.usyd.edu.au>]

robson wrote:

> It was also said that the preceeds of the sale ($1 billion) would be
> put into general government revenue, not partly into rail maintenance
> as Transport Minister Carl Scully had hoped.
>
> A cynic would suggest that the sale is being pushed through to
> compensate for an Olympic budget blow-out, rather than for sound
> economic reasons.
>
> A anti economic rationalist view could be this .... It would have been
> better to absorb FreightCorp back into State Rail so that the profit
> (quoted yesterday as a yearly dividend to the State Government of
> $45m) could be used to cross-subsidise CityRail losses, as was the
> case before the 4 way split. That was the split that some now say
> seemed like a good idea at the time. With cross subsidy there would be
> less need to dig into the public purse. Stupid idea, right!

The split was designed to aid the future privatisation of the railway
system, not competition as was described in the media at the time.  The
problem with cross subsidies, is that it does not allow for transparent
accounting techniques to take place.