First planes, now trains
Written By:
- Date published:
2:09 pm, March 6th, 2008 - 43 comments
Categories: economy, privatisation -
Tags: economy, privatisation
It is looking more likely that the Government will buy back New Zealand’s rolling rail stock from Australian-based Toll.
Toll has been a classic asset-stripper: buy a key piece of infrastructure that should never have been sold, take as much profit as possible with minimal investment, and force the Government to buy the infrastructure back to prevent further economic damage. Lines have been closed and road freight (including Toll’s trucking line) is out-competing rail, increasing roading costs and greenhouse emissions.
The Government had to buy back the rail infrastructure from Toll in 2003 to prevent it falling apart. Toll gave up the infrastructure for a token sum, and promised to match an investment of $100 million from the government in upgrading the rails, and then pay the government for the right to use the rails. Toll has tried to wiggle out of the deal ever since, not fronting with its $100 million and now trying to avoid paying its full fee for using the rails. Now, Toll wants $700 million plus to sell the rolling stock and has rejected a government offer of $500 million. The rolling stock’s value depends on how much the Government demands for use of the rails: if they stick with the original agreed sum of $57 million this year, Toll will be willing to settle for a lower price, if Toll can reduce this cost, it will demand more to sell the rolling stock.
The Government should force this odious company to stick the original agreement and then offer it as little as possible to buy back our rolling stock. Toll has been nothing but bad news for this country; it’s time to buy back New Zealand’s railways.
[Update: The Greens have the same train of thought]43 comments on “First planes, now trains ”
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Key said it was Labour that was changing its mind on the airport sale at the last minute.
“They’re trying to portray National as somehow pro-asset sales,” he said.
http://stuff.co.nz/4426772a6160.html
Laugh? I nearly wet myself
Good thing you were out of bed
he he
it’s good to see Labour acting like Labour
I’m so glad I found that kiwi and train photo. You don’t guys know how many google images pages I looked at, and it’s so cute.
steve you old softie
I like trains
Steve, and here I was thinking you’d made it yourself with your kickass MS Paint skillz…
me too
If I had drawn the pic using paint. I would have had kiwi driving the train, with Key tied to the tracks crying out ‘Kevin Taylor, foreign asset-strippers, anyone: save me!’
Can the government afford to buy back this white elephant? where would it get the money from – they have squandered all the opportunities and now have a deficit. Stupid socialist Cullen – but at least the economy is tanking while he is still in government – if we waited a few more months (till after the election) then Labour would have tried to blame National.
By the way between buying a white elephant and the deficit – will Cullen be able to afford taxcuts as one off his key criteria is no borrowing? Ha – snookered by his own red ball.
If I may be so bold, I take this thread as conclusive evidence that everyone in New Zealand wants the govt to buy back the trains.
nice.
of course nobody would save him, Bill English would stand guard to make sure of it.
for sure buy them back. it’s a necessity if they’re to work properly with long-term objectives – you can’t plan squat when you’ve got a private investor’s six month event horizon.
dammit, Monty. You spoiled it.
There’s plenty of money to buy the rolling stock, it’s a currently profitable business, and will be more profitable with proper investment.
Also, get to know the difference between the operating surplus and the OEGAL surplus. Losses for the Cullen Fund, the ACC Fund, and the EQC Fund due to a bad quarter on the international stockmarkets affect created an operating deficit but has no effect on how much the government can actually spend
Can we buy telecom back now?
let’s buy the Herald
“Can we buy telecom back now?”
And the Forestry Corporation. And Contact Energy…
and National. no wait, they’ve already been bought
Odious company and also a Labour Party donor.
No one wants the trains bought back more than me, but the trouble with this rant is that it is complete bollocks. Toll have actually been working with the government to improve the infrastructure. It was the previous owners who stripped the rail. The government paid a hefty whack to buy back the tracks. The issue now is that the continued cost of upgrading infrastrcuture is more than Toll is prepared to invest. Basically, Toll is saying it doesn;t want to contribute towards the cost of the improvements. That’s not the same as asset stripping.
The rail should be bought back at a reasonable price to the upgrades can go ahead because there are reasons beyond narrow economic return for why we want to shift more transport to rail. (It’s good for those of us who stay in cars, for example.) But to say Toll have been a disaster is just not true and a good example of the hysterical lies that have undermined arguments against asset sales all along.
It is also a really bad idea to advocate stealing the company back. The decision to sell was bad, but once it’s made the problems are compounded by nationalising without compensation (or with inadequate compensation.) To give you an idea – what if your pension fund has an investment stake in Toll? Why should your retirement savings be super-taxed because it made a decision to invest in a company that does something socially positive (i.e. operate public transport)?
Remind me again who was in power when it was sold originally. And perhaps a list of cabinet members who are still in cabinet….
It’s alright for you lefties to support this purchase. I seriously doubt it’s your money they are spending because I seriously doubt that any of you cunts pay tax.
rOb I am an adult, I use adult words. You should follow my example.
Murry – you’re not an adult. You’re a whining little rightie child. Why don’t you fuck off with your petulant ignorant bigoted cuntishness. Adult enough for you, you fuckin joke?
c
Murray Murray Murray.
yes i believe National sold the rolling stock to their mates Fay, Richwhite. aren’t they pricks Murray? taking from the poor to give to the rich. very National eh Murray.
Sprout – do you have an email address I can contact you at?
Scratch that – email me at mickyporton[at]hotmail.etc
done
Could the friggin’ Natinal Party please dip into their pockets – they know the trick of sliding hands into other people’s pockets and either ripping them off or giving them heaps of dosh – but could they dip into the Bretheren’s pockets and chip in to buy back the railway?
they were the ones who sold the country for a song and pretty penny (cheep cheep) …
Remind me again who was in power when it was sold originally. And perhaps a list of cabinet members who are still in cabinet
No sooner said than done! Sold in 1993 by the National Bolger government, see:
http://en.wikipedia.org/wiki/New_Zealand_Railways_Corporation
None of the ministers then in cabinet are there now of course, as we are fortunate enough to have a Labour government. However, many of them are still MPS: Bill English, Nick Smith, Lockwood Smith, Tau Henare and so on. For the full list see:
http://en.wikipedia.org/wiki/Fourth_National_Government_of_New_Zealand
So – why exactly did you want to know BB?
Well no Chris. It was the fourth labour government that sold a lot of our assets. The national party just continued the trend after telling us they would stop it. Interestingly the key people who took part in that asset strip (both labour and national) are now either in the act party or are advisers to the national party.
Murray – no need to be such a potty mouth.
A laundry list of assets sales:
Labour (1988-1990) sold: New Zealand Steel, Petrocorp, Health Computing Service, DFC, Post Office Bank, Shipping Corporation, Air New Zealand, Landcorp Financial Instruments, Rural Bank, Government Printing Office, National Film Unit, Communicate NZ, State Insurance Office, Tourist Hotel Corporation, New Zealand Liquid Fuel Investment Ltd, Maui Gas, Synfuel Stocks and Assets, Forestry Cutting Rights, and (the mother of them all) Telecom.
National (1990-1999) sold: NZ Timberlands, Export Guarantee Office, Government Supply Brokerage Corporation, Housing Corporation Mortgages, Taranaki Petroleum Mining Licences, Bank of New Zealand, New Zealand Rail, Wrightsons Rights, Fletcher Challenge Shares, GCS Ltd, the regional airports of Hamilton, Oamaru, Te Kuiti, Timaru, Masterton, Tauranga, Hokitika, Rotorua, and Palmerston North, the international airports of Auckland and Wellington, Maori Development Corporation, Radio Company Ltd, Forestry Corporation of New Zealand, Works and Development Services Ltd, Capital Properties NZ Ltd, Contact Energy, and VTNZ.
DS. Thanks for the list
The Nats will strip us of every asset we have. I believe they will even sell our parks as they have no economic need for their under their far right leadership.
If National wins this election it may be the last one ever as our countryy will be foreign owned by 2011 and we will have lost all control.
Electing them is that dangerous
Only a sustained period of repurchasing New Zealand assetts and nationalising key industries will win votes
Rexel
I think you need to have a lie down – fundamentally little will change with a change of government – both National and Labour are far closer than either like to admit.
I’ll take is as raed that the rest of your post is just taking the piss.
“fundamentally little will change with a change of government – both National and Labour”
hs – makes me wonder then why anyone would want to trade competent leadership for an inexperienced amateur who isn’t even sure what party he leads.
Sprout
In terms of the leadership purely because the public are tired of Helen and seem to be more comfortable with John.
In terms of a change of government I think we both know where this election will be won and lost and it won’t be in areas that will be change markedly before or after the election.
I forgot to ask
I’m hoping Rexel was taking the piss if not his/her views are somewhat of a concern – hope we are in agreement on that at least
This post is outright nonsense “Toll has been a classic asset-stripper: buy a key piece of infrastructure that should never have been sold, take as much profit as possible with minimal investment, and force the Government to buy the infrastructure back to prevent further economic damage.”
When in fact Dr Cullen and Toll did a joint deal at the time to buy Tranz Rail and hand over the track to the government for $1.
The press release is here http://www.beehive.govt.nz/release/govt-toll reach accommodation tranz rail
The government and Toll worked together to make an offer, Toll has never owned the track.
What lines have been closed? Go on, list them – and I think you’ll find Castlecliff is it (which hasn’t had freight trains on it regularly for years anyway as it is little more than a large suburban siding).
Also the claim that more road freight increases costs, without noting that it is covered by road user charges (for the state highways anyway), is being a bit wilfully blind.
I’m no friend of Toll, but this post is based on complete nonsense.