WA govt rules out B&B rail bail out

The Carpenter government is working on a rescue package to stop the closure of some of the state's rural rail network, owned by embattled Babcock & Brown, but will not bail out the entire network.

In a statement, the Planning and Infrastructure Minister Alannah MacTiernan said the WA government had been in discussions with the federal government to prevent the closure of 1000 kilometres of the state's rail tracks.

The comments follow calls from the WA Farmers Federation for the state to take over control of the network, which is controlled by WestNet Rail. Babcock and Brown Infrastructure Ltd holds a 76 per cent interest in WestNet.

The federation said it is extremely concerned at the implications for the state's narrow gauge rail network arising from current Babcock & Brown viability concerns, particularly given the recently deregulated wheat market.

Earlier this month, BBI said it was looking for partners to co-invest in up to 50 per cent of WestNet and natural gas distribution arm Powerco to reduce its gearing.

The ABC reported Ms MacTiernan as saying that the government was not prepared to spend up to $800 million to rescue the network, after it was privatised by the previous Liberal government.