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THE Norske Skog newsprint mill at Boyer would be at risk when rail operator Pacific National ceased services between Boyer and Burnie, unions said yesterday.
CFMEU pulp and paper workers branch secretary Tim Woods said yesterday the 400 jobs at Boyer were at grave risk.
Pacific National has said it would quit operations, cutting 150 rail jobs.
Norske Skog has coal and logs transported to Boyer from the Fingal Valley and ships newsprint from Boyer to Bell Bay.
Mill manager Ernie Hacker said road transport would add significant costs to the operation.
"We have met Pacific National and also met the State Government to talk about the issues at Boyer," he said.
Federal Transport Minister Warren Truss and the state's Infrastructure, Resources and Energy Minister Bryan Green scheduled a crisis meeting for 9am today.
Mr Woods said Tasmania could not afford the uncertainty over the rail services and it would make a pulp mill more difficult to achieve.
Mr Truss said he believed in rail as a mode of transporting large volumes of freight.
"I think it would be very disappointing if the Tasmanian rail system was to fail," he said.
"I am trying to find a way in which we might be able to resolve the issues."
He said that the board of the Federal Government-owned Australian Rail Track Corporation would need to be satisfied that rail would be viable before it took over the 780km of Tasmanian track.
Mr Truss has proposed an investigation of the rail track before contributing up to $100 million to services.
But Pacific National has said there was no time for "yet another lengthy study".
The crisis comes as Pacific National faces internal turmoil. Toll Holdings Ltd, a shareholder in the rail company, has launched a $4.6 billion hostile takeover bid for the other partner, Patrick Corporation.
Patrick has launched legal action relating to Pacific National's Queensland operations.
Under a dispute resolution procedure the rail operations could be broken up and sold.
Also yesterday Opposition Infrastructure spokesman Brett Whiteley called on State and Federal governments to play a role in saving rail services.
Mr Whiteley will lead a delegation to Canberra to impress upon Mr Truss concerns about the end of services.
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