Tim Hunter, writing in the Sunday Star Times, analyses the reason behind the current stand off between Toll and Government. (no electronic version sorry) Hunter rightly points out that the deal that this Government negotiated with Toll 5 years ago was non-sustainable. And with Ontrack currently valuing its assets at $5.6 billion Government will never get a decent return on this asset from the operation of a railways service. So why is Government seeking now to nationalise the rail and ferry service operated by Ontrack? Particularly as it had the chance to do this at a much cheaper price five years ago?
The whole thing seems very worrying, and it is good that this article has been written. It does raise the question as to whether rail, in its current business model, is sustainable in a country of our topography and of our population.
But at The Hive we have great faith in the private sector finding solutions. Rather than nationalise the railways, why not break them up and put various regional services up for sale. Wellington rail must be viable given the passenger numbers. Auckland must be an interesting potential investment. And the Cook Strait ferries, already facing private sector competition, must be viable in their own right. Rail in the South Island? If no one wants to buy it close it down, and rely on coastal shipping to augment road freight. And Government can realise a bumper profit from the sale of this enormously valuable land asset throughout the South Island.
