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The rail operator Pacific National says its threat to close container freight services in Tasmania has come after months of carefully considering its business position.
The company says it wants government funding to upgrade infrastructure if it is to keep the service.
Pacific National's chief executive, Stephen O'Donnell, says the company has been working with the state and federal Governments for about two years but recently decided there was little prospect of getting any funding.
"I've got to say I've been just underwhelmed by the lack of response when we've raised these issues, which degenerated into a tax, it's degenerated into calls for another study, I mean we've just got to get past this and just see is there anything that can be done," he said.
Mr O'Donnell says there have been five freight studies over the last 12 months.
The Tasmanian and federal governments hope talks will be held this week to set up an independent evaluation of Tasmania's rail freight network.
Pacific National believes Tasmania's rail system can not compete with road transport unless it gets Government support.
Mr O'Donnell says rail has to stand alone, while roads receive significant government assistance.
"Now whether you want to call it a handout or a subsidy, I don't really care," he said.
"The fact is if you compare it against the road system, they are receiving grants from the Government, they are receiving assistance. So far the rail system has not received any subsidies or any assistance at all."
Tasmanian Infrastructure Minister Bryan Green says road transportation operators pay heavy registration fees and that Pacific National needs to give better justification for the level of funding it has asked for.
Pacific National says it has not got months to wait for a response.
Federal Transport Minister Warren Truss has proposed an independent evaluation to assess the viability of the service.
A spokeswoman for Mr Truss says it is hoped talks between the two ministers can be scheduled for the middle of the week to organise the assessment.
Mr Green hopes the planned meeting will provide a way forward.
"I'm very pleased that it looks likely that we will get together and I think that the best opportunity for us to sit down and discuss this issue in the cool light of day provides us with, as I've indicated, the best opportunity to seek a way forward," he said.
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