Friday 13th June 2003
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Realistically, some regional lines will always be unprofitable Gisborne is a good example and if communities want to retain these they should be prepared to foot the bill or, if they do not have the money, make a strong case to the government for a subsidy. It should not be for the railway company to carry the cost of regional development.
The most difficult challenge for the new Tranz Rail is the passenger business. Despite all the talk about people wanting to travel by rail, the likelihood that motorists will give up their cars is slight.
There is some opportunity for boosting commuter services, especially in Auckland but rail-lovers and Greenies should not hold their breath; a rail resurgence is largely a romantic notion.
The bailout of Tranz Rail can be contrasted with the bailout of Air New Zealand; the latter should have been allowed to fall over and be recapitalised by the private sector. Tranz Rail did not have that option to fall back on.
Rail should be seen as part of New Zealand's infrastructural network, not the solution to its transport woes. For many years state-owned rail enjoyed a privileged position. Its advantages and subsidies did not help it grow to meet the needs of a modern economy. That trap should be avoided this time around.
If, as some users say, this is Tranz Rail's last chance, then the government has to act prudently and avoid making rail political.
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