Sharechat Logo

Public-private partnership

Editorial

Friday 13th June 2003

Text too small?
Rather than viewing Tranz Rail as a state asset, the minister should assess the opportunities for working with the private sector to keep strategic lines open and profitable and lay new ones.

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.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut
RBNZ knock-back gives Resolution chance to low-ball AMP - Jarden
Rail hubs may not boost Napier Port log trade
O'Connor looks to overhaul Biosecurity Act, improve animal tracing
Denton Morrell undefended at liquidation hearing
Contact steam to heat Norske Skog pellet business secured
Air NZ to amend booking engine after lawyer’s complaint
Ross McEwan to take helm at NAB
KPMG says bank capital proposals will wreck havoc on dairy farmers
Mild weather saps Vector's June-qtr volumes

IRG See IRG research reports