News: NSW govt set to save Downer Warratah

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Downer EDI Limited’s (ASX:DOW) troubled Waratah contract with Reliance Rail looks set to be saved by the New South Wales State government.

Fairfax media says the state government is gearing up to reveal a $175 million public takeover as early as this week.

Opposition Leader John Robertson has called on the government to disclose the details of the renegotiated contract.

Mr Robertson has also warned safety standards on the trains may be compromised in order to speed up the delivery of the 78 trains.

Last financial year Downer made a $250 million provision on its multibillion-dollar Waratah contract.

In the 2011 financial year Downer EDI swung from a net profit to a net loss of $27.7 million.