By Phil Boeyen, ShareChat Business News Editor
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Friday 5th October 2001 |
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Councillors voted by 13 to one on Friday to buy the service, giving the go-ahead to form a 50:50 joint venture with a private sector rail operator to run the business.
Council chairman, Stuart Macaskill, says the service is run-down and fragile and has lacked committed ownership and today's decision will save the service in the long run.
"It is our aim to make sure the people of Wellington have access to a safe, secure and reliable rail service. That is our goal, and public involvement in ownership is the best way to achieve it."
Mr Macaskill says there are several benefits to the joint-venture option.
"Firstly having a 50:50 joint venture will reduce the up-front cost of purchasing the Tranz Rail system.
"Secondly, having an experienced rail operator as a joint-venture partner will be very valuable when we come to negotiate with Tranz Rail. It will be harder for Tranz Rail to hide costs, or talk-up the price with a rail operator at our side."
Mr Macaskill said a third reason for choosing the joint venture was that this option doesn't close off the possibility of moving to a franchise arrangement in the future.
"We respect the view of the region's mayors that they prefer a franchise option, and that option is not closed off by this decision. However, that would mean the Regional Council would have to purchase 100 percent of the rail system, without the financial support or knowledge of a private sector partner.
"We consider that is too high a risk for our Council to bear."
Earlier this week the government announced it had come to agreement with Tranz Rail to sell the Auckland rail corridor to local regional councils for $81 million.
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