Rail back in New Zealand hands

The transfer of New Zealand’s rail assets back into New Zealand hands is a major step forward in building a sustainable transport system for the 21st Century, Prime Minister Helen Clark and Finance Minister Michael Cullen said today.

The rail and ferry assets of Toll New Zealand were transferred into government ownership today. A new KiwiRail establishment board will manage the services, pending determination of the final shape of the relationship between KiwiRail and OnTrack – the SOE which runs the rail track.

"With rising fuel prices and a sense of urgency in the fight against climate change, governments around the world are again looking to rail as a central part of 21st century economic infrastructure," Helen Clark said.

"With our rail system back in public ownership, we can make the strategic decisions and investments necessary for rail to play its full part in building a more sustainable New Zealand. Over time, we will be able to move more and more freight off our roads and onto rail. Rail will also play a bigger role in public transport in our major centres.

"Overall, with our rail system back in public ownership, we can ensure that it works in New Zealand interests, supporting the needs of New Zealand business and New Zealand’s communities," Helen Clark said.

Michael Cullen said that under a National Government in the 1990s, New Zealand was the first nation to privatise a hitherto national rail system completely, but that move had clearly not worked.

"From asset stripping to trading scandals, New Zealand’s experiment with rail privatisation failed to produce much needed investments in this critical part of New Zealand’s transport infrastructure.

"Toll Holdings had made good progress in recent years, but it has become clear to all that the rail network could not be run without substantial government subsidies into the future.

"By bringing our rail system back into public ownership – following the buyback of the tracks four years ago – we will spare future generations from subsidising a private rail operator and will be able to create an integrated, sustainable transport system.

"This is a long-term investment in New Zealand’s future. The government is confident that KiwiRail will make a huge contribution to our economy." Michael Cullen said.