Written By: - Date published: 9:04 am, July 3rd, 2008 - 78 comments
Categories: assets -
Tags: railways
A day into the renewed public ownership of our railway system and it has emerged that not only did John Key help sell it in the first time and make a profit off the asset-stripping that followed. Further, his party’s policy of keeping the rail in private hands would have seen nearly all the network shut down by Toll even while the taxpayer continued to subsidise the company.
Toll was planning to shut down 8 lines, part of the Main-trunk line (including the part that goes through Taumarunui!), and the Overlander, leaving only two intercity passenger lines.
In the age of peak oil, the last thing we need to be doing is closing down a means of transport that is 4 times more fuel efficient than taking freight by road.
John Key sold our railways once and he would do it again.
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“Steve Pierson
July 3, 2008 at 9:46 am
so, the righties are now calling for heavy handed regulation of a private company? You agree we don’t want those lines shut down so why not just buy the company and be done with it, rather than keeping on paying tens of millions a year in subsidies to a aussie profit-making outfit and using the blunter tool of regulation to try to get it to behave?”
I’d love to know how many voters out there really care that it is an Australian company, like, the voters who work for companies that sell products and services in Australia for example.
There’s nothing wrong with profit either. The government has been very much out there in pushing the line that they are not seeking to make money from it, in order to try to claim the moral high ground and all. This is an irrelevant nonsense. It makes no difference whether the government makes a profit from something or not. They make profit from certain SOEs, and others they just operate as political wells of favour. Government entities only have a small amount of imperatives such as service, and a large part as political causes and motives. That works out the same irrespective of whether the government entity makes a “profit” or not.
:Steve Pierson
July 3, 2008 at 10:01 am
HS. yes, but Toll was going to stop running trains on those lines, then ONTRACK would have had the choice of continuing to maintain tracks that were no in use and for which it had no revenue stream, or abandoning them. I can imagine vto’s ‘gut reaction’ if ONTRACK was maintaining tracks that no-one was using.:
ONTRACK does maintain tracks that no one is using, as it happens. They own a few closed routes with most of the infrastructure still in place and they are fully liable for maintaining them for public safety, weed control and the like, just as they would be if they were operational.
Now, I’m going to turn the clock back a few years to the track buyback and specifically the petition that the rail unions organised in favour of it. The line put about at the time was that other operators could always come in and run the services. Funny, no one ever suggests any other operator as an alternative to Toll except for Ontrack taking over the services themselves as they have effectively done.
“higherstandard
July 3, 2008 at 10:06 am
SP
Might be just me but wouldn’t it have been a cheaper option to subsidise Toll and offer incentives to get freight and people to use these lines ?”
Yes HS, that is effectively what was in place before when the Track Access Charges were not being funded by Toll and the minimum freight requirements of the National Access Agreement also applied.
Insider,
Toll had only a monopoly on areas where they could meet minimum freight targets, they had to give up the monopoly if those couldn’t be met.
The monopoly was signed up to by the Labour party when they bought back the rail tracks from Toll.
“lprent
July 3, 2008 at 10:22 am
hs: Yes but toll as the only rolling stock operator wasn’t willing to pay rental on parts of the network – ie what was required for maintenance.
The only real options would have been to shut down those parts of the network or find another operator. Since Toll were in a natural monopoly position and were cherry picking the most profitable parts of the network, another operator wasn’t viable.”
Toll only got a monopoly on sections they kept in operation.
That “natural monopoly” was agreed to by the Labour Government of Helen Clark and Michael Cullen when they agreed to repurchase the tracks for $1 from Toll Rail in 2002.
So, other operators could have been brought in to run the routes that Toll didn’t want to operate.
Hey Swampy – that sounds like misdirection to me. You seem to be running an argument that all that was needed was competition – I’d be interested to hear how would you would realistically introduce that.
You’ll have to ask the RMTU what they had in mind back in 2002 or so.
Kevyn,
People are questioning (and so they should) where the money is going when LTNZ is not just funding roads, they are now spending money on coastal shipping and rail.
Likewise the government has passed this law for a regional petrol tax to fund programmes like rail in Auckland.