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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-02-05 Daily Xml
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FREIGHTLINK

The Hon. R.I. LUCAS (14:28): I seek leave to make an explanation before asking the minister representing the Minister for Industry and Trade a question about Freightlink.

Leave granted.

The Hon. R.I. LUCAS: My question relates to the current financial problems confronting Freightlink and the potential exposure of South Australian taxpayers as a result of commitments given in relation to the building of the Alice Springs to Darwin railway. Treasury and the Department of Trade and Economic Development have advised that that exposure can be divided into three broad areas.

The first of these relate to the original granting, through legislation passed in the parliament in 1977, of a 50-year interest-free loan of $25 million to the Australasia Railway Corporation, which was, of course, matched by the Northern Territory government, which was also an interest-free loan. That loan, we are told, is repayable in 2054.

We are told that the carrying value of the loan provided by the Department of Trade and Economic Development to that corporation has been reduced to zero, and therefore it does not appear in the department's financial statement as an asset. We are also told that the department continues to record the outstanding loan in its grants and loans management system.

The second broad area relates to the fact that the Department of the Premier and Cabinet has an unquantifiable contingent liability in its accounts associated with the guarantee of the obligations of the Australasia Railway Corporation. I will not go through the details, but it is outlined in the Department of the Premier and Cabinet's 2007-08 Annual Report as to why it is not possible to quantify that particular contingent liability.

The third potential area of exposure relates to a guarantee, again pursuant to the Alice Springs to Darwin legislation of 1977, the state gave to SAFFA in respect of its holding of subordinated mezzanine notes issued by Asia Pacific Transport Finance Pty Ltd as part of the funding arrangements for the construction of the railway. However, I cannot establish the extent of the potential liability of taxpayers underneath that area. My questions are:

1. In relation to the guarantee to SAFA in respect of its holding of subordinated mezzanine notes issued by Asia Pacific Transport Finance Pty Ltd, will the minister outline to the parliament the extent of the potential financial guarantee or commitment the state and taxpayers have in relation to that guarantee?

2. Will the minister indicate the government's current advice as to the potential total exposure of the state in relation to the two areas that can be quantified—obviously, the interest-free loan ($25 million) and the guarantee of subordinated mezzanine notes—and the guarantee being given to SAFA?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:31): I thought the Treasurer had made some statements in relation to this matter, but I will refer the questions to him and bring back a reply.

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