By Phil Boeyen, ShareChat Business News Editor
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Tuesday 9th October 2001 |
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Under the deal the government and local authorities will contribute $240,000 towards the running costs of the Christchurch-Invercargill service until 10 February while its longer term viability is investigated.
The interim funding is split between interested parties with the government contributing $140,000, Dunedin and Invercargill City Councils $35,000 each, Christchurch City Council $25,000, and smaller amounts from Waitaki, Southland, and Timaru.
Deputy Prime Minister, Jim Anderton, says the newly-created Ministry of Economic Development has played a key role in gaining the reprieve, working closely with local authorities and contributing funds because of the regional development and tourism potential of the service.
Mr Anderton has also acknowledged the co-operation of Tranz Rail in keeping the service open while a deal was arranged, and in agreeing to meet any further shortfall from continuing until February.
The government has also agreed to pay up to $30,000 to fund an investigation into the long-term viability of the service with local government putting up $35,000.
It will look at the impact on regions if the passenger service closes, the market for passenger transport on the route, a market assessment of options for addressing passenger demand, and the wider benefits from passenger transport options.
Dunedin South MP ,David Benson-Pope, says the key now is for local communities to discuss what level of initiatives they will support and what level of funding they would contribute in the medium term.
"It's up to the communities serviced by the Southerner to contribute their ideas of what may be possible to maximise the development and tourism potential for the region."
Tranz Rail announced its plans to get out of the passenger rail business last year as it seeks to improve profitability, selling off a number of viable tourist scenic routes and closing down others.
The rail operator is concentrating on its freight business and inter-island services.
In recent weeks the Auckland region has agreed to buy Tranz Rail's Auckland corridor for $81 million and the Wellington region has announced it will buy the local passenger services in a joint-venture proposal.
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