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EMU BAY RAILWAY (OPERATION AND ACQUISITION) BILL 2009
FACT SHEET
� This Bill and the accompanying Rail Company Bill 2009 and Consolidated
Fund Appropriation (Supplementary Appropriation for 2009-10) Bill 2009
constitute a legislative package to support the Government's purchase of the
Tasmanian rail business.
� The primary purpose of the Emu Bay Railway (Operation and Acquisition)
Bill 2009 is to address issues with the legal title to the Melba Line that were
discovered during the negotiation of the Business Sale Agreement.
� The most significant issue relates to a debenture scheme established by
The Emu Bay Railway Company Limited in 1925. Debentures are issued by
companies as a means of obtaining credit; usually from a relatively large
number of creditors.
� The scheme created a mortgage over part of the Melba Line and a charge
over other assets of The Emu Bay Railway Company to secure the
repayment of moneys owing to debenture holders.
� It appears that the scheme was not fully wound up, nor the securities
discharged, before the sale of the Melba Line in 1998 by The Emu Bay
Railway Company to Tasrail, which was later acquired by Pacific National.
� It also appears that there may be at least one outstanding debenture under
the old scheme.
� The Government's legal advice is that the total amount owing on the
outstanding debentures may be less than $2,000 plus accrued interest.
� These historical legal issues require resolution before the Government can
be certain that it will hold legal title for the Melba Line following the transfer
of the business.
� The Emu Bay Railway (Operation and Acquisition) Bill 2009 will have the
effect of bringing to an end the securities created by the 1925 scheme as
they relate to Melba Line and related assets.
� At the same time, the legislation will allow holders of outstanding debentures
under the 1925 scheme to make claims for compensation in relation to their
debentures.
� The Minister will make a determination on compensation claims put to him
based on independent advice provided to him by the Valuer-General. If there
are any disputes as to compensation will be treated the same way as a
dispute under the Land Acquisition Act 1993. This process was chosen
because it is well established and provides clear and appropriate appeal
rights for claimants.
� The Government believes that this process is fair and appropriate in the
circumstances and achieves the right balance in meeting both the private
interests of remaining debenture holders and the wider public interest of the
continuation of rail services in Tasmania.
� In addition to the rectification of the historic Melba Line legal title issues
outlined above, the Bill also seeks Parliament's ratification of the Business
Sale Agreement and contains a range of other provisions dealing with a
number of technical legal and administrative matters necessary for the
smooth transfer of the business to Government ownership and the continued
operation of rail services.