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Government wins support for possible Tranz Rail buyback

By Deborah Hill Cone

Friday 16th May 2003

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As international buyer RailAmerica put up its hand to buy Tranz Rail, a new poll shows the public is keen on the government getting involved.

The world's largest short-line rail operator RailAmerica announced yesterday it would make a takeover offer for all the assets of Tranz Rail.

But a new National Business Review poll found most New Zealanders want the government to do the deal.

The poll by UMR Research found 67% of New Zealanders support the government buying the rail company, 23% opposed it and 10% were unsure or said their answers depended on other factors.

The question did not specify details of the deal such as whether the government would buy the entire company or, as has been suggested, only the rail lines.

But the poll mirrors earlier research by the Rail Freight Action Group showing support for the government buying back the lines. That is the option favoured by RFAG, which represents major freight users such as Carter Holt Harvey, Fonterra Co-operative Group and Solid Energy.

It wanted the government to buy the tracks, catch up on deferred maintenance and open rail up to competition from other operators.

"If anything, the public's attitude has firmed up since [our research]. The New Zealand public is simply saying it wants to keep a national rail system," RFAG spokesman Cedric Allan said.

Commentators concede there is no level playing field between rail and road. Trucking companies do not have to invest their own money in the roads they use, whereas rail companies must maintain the infrastructure.

Finance Minister Michael Cullen would not elaborate this week on his public position on Tranz Rail.

"The government is considering a broad range of options in relation to the role of rail in the government's transport strategy," Dr Cullen's office said before the takeover was announced.

Also before the takeover offer Mr Allan said the government ought to make a decision on the issue in the next few weeks. Mr Allan did not know what options were on the table but said Tranz Rail seemed receptive to the the government buying back the tracks.

"I don't think anyone wants the government back as an owner-operator [and] no one thinks trying to persevere with the present model is a good idea."

Wellingtonians were most enthusiastic about a government buyback (72% support), while Aucklanders (67%) were less so. People in the provinces (65%) and in rural areas (63%) were not as adamant about the transaction.

Voters from across the political divide were also keen on the idea.

Sixty-eight per cent of National voters supported the government getting involved and 70% of Labour voters did.

Act New Zealand was the only party whose voters did not support the idea, with 47% supporting a buyback and 50% opposing one.

But the poll's findings were not encouraging for Auckland's local bodies, trying to promote passenger rail as a solution to the city's gridlock problem.

Only 4% of people said they travelled regularly by train. Nine per cent said they sometimes travelled by train, 32% travelled rarely by train and 55% never did.

The biggest users of trains for transport were clerks (14%), students (9%) and professionals and managers (6%).

More Wellingtonians (18%) used trains than Aucklanders (4%).

Wellington's geography, with natural rail corridors, is more suited to the use of rail for commuting while Auckland is more diffuse with commuters frequently travelling across the city.

The NBR poll showed train commuters were more persuaded about the point of a government buyback than people who never set foot on a train.

Sixty-two per cent of people who never travelled by train supported a government buyback, compared with 75% of people who sometimes took trains and 73% of people who regularly did so.

But the main reason for the government to get involved in rail is the network's strategic importance as a way to get freight around, not in its role as a passenger mover. Rail's share of total freight is about 10%, or 14 million tonnes, with coal, logs and bulk milk making up much of that figure.

Commentators from across the spectrum agree the government needs to intervene.

"Distasteful as it would be to freemarket advocates and to some politicians, the bottom line is a government buyback, reconstruction and new path," commentator Peter O'Brien said.

The UMR Research omnibus is a telephone survey of a nationally representative sample of 750 New Zealanders aged 18 or older. Fieldwork was conducted from April 24-29 at UMR Research's national interview facility in Auckland. The margin of error for a 50% figure at the "95% confidence level" is ±3.6%. If there are any inquiries about this poll, please contact UMR Research on 0-4-473 1061 (phone), 0-4-472 3501 (fax) or umr@umr.co.nz (email).

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