Rail buy back marks new sustainable transport era

by Maireid Sullivan | May 4, 2008 at 06:19 pm

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NEW ZEALAND: It is thrilling for me to see governments de-privatiziing their infrastructure. Once sold off, it is very difficult to undo. Obviously, the early 1990s trend was a big mistake. Many of us knew it then. Those who facilitated the sell-off of public utilities and lands must be quaking now that their 'policies' have proved wrong.

READ: Questions and Answers - Government rail buy back
Q What will the government own after today's purchase?

A The government already owns the rail infrastructure which includes 4,000 kilometres of track, six million sleepers, 1,787 bridges, 150 tunnels, 12,000 culverts and signalling infrastructure including points, railway level crossing alarms, electrification and communications systems. These, along with control of trains on the network, are vested in ONTRACK, which has a staff of 900.

Read full Q&A here: http://www.scoop.co.nz/stories/PA0805/S00056.htm

Monday, 5 May 2008, 10:04 am
Press Release: New Zealand Government

Rt Hon Helen Clark
Prime Minister of New Zealand
Hon Dr Michael Cullen
Minister of Finance

5 May 2008 Media Statement

Embargoed until 10am

Rail buy back marks new sustainable era for transport

The Labour-led government has reached agreement with Toll Holdings Ltd for the purchase of Toll New Zealand’s rail and ferry business, Prime Minister Helen Clark and Finance Minister Michael Cullen announced today.

“Modernising our transport sector is central to transforming our economy and making it truly sustainable,” Helen Clark said.

“With rising fuel prices and growing awareness about the challenge of global climate change, many nations are looking to rail as a central part of 21st century economic infrastructure.

“A modern rail system can lessen the carbon footprint of our wider transportation network, taking pressure off our roads and allowing our trucking and shipping businesses to operate more efficiently. Combined with an increase of almost 1,100 per cent in public transport investment since 1999, today’s announcement marks a major step forward in building a truly sustainable transport network.”

The government will pay a purchase price of $665 million for the rail and ferry business with settlement on 30 June 2008.

“The selling off our public rail system in the early 1990s and the running down of the asset afterward has been a painful lesson for New Zealand,” Dr Cullen said.

“During the negotiations with Toll it transpired that buying the rail operating business including the ferries was the best way to increase investment in the industry and enable it to be more responsive to the needs of New Zealand customers.

“Running a commercially viable business that was able to contribute to the economic and environmental development of New Zealand was proving extremely difficult without government support.

“The government will now avoid paying subsidies to third parties and we also avoid the on-going disputes over the implementation of the National Rail Access Agreement that had the potential to destroy value in the business and erode the morale of the people who work in it.

“We acknowledge the important role that Toll has played in the industry by increasing the volumes carried by rail and improvements that they have made to the operation of the terminals. We look forward to continuing to work with them in their ongoing freight forwarding business.

“In the months ahead, I will explore options for significant investments in new, modern rolling stock. These will be presented to Cabinet and full details will be made available as soon as possible.”

Dr Cullen will hold a media briefing at 10am. Further details including background material will be provided later in the day.