Posted 1st July 2008 | 5 Comments
New Zealand government renationalises rail and ferries
NEW Zealand’s rail and ferry services were taken back into government ownership on 1 July and renamed KiwiRail — and the former prime minister who oversaw privatisation 15 years ago has been put in charge.
Jim Bolger, who was prime minister of the opposition conservative National Party, which sold the railways in 1993, was announced by the present Labour government as head of the new interim company to run the network.
The Bolger government received $NZ328 million (£125 million) in 1993 when it became the first country in the world to fully privatise its railways as a single entity.
It sold the network to a consortium headed by US-based Wisconsin Central and a local investment bank. The Wisconsin-led consortium later went on to buy British Rail’s freight services and operate them as EWS — now owned by German Railways.
The New Zealand rail and ferry operations were sold in 2004 to Australia’s Toll Holdings, while the government bought back the infrastructure. Toll Holings Ltd today received a total of $NZ690 million (£363 million) from the government. The price includes a rail and car ferry, which crosses Cook Strait separating the North and South islands, and the leases on two other ferries.
Launching KiwiRail, finance minister Dr Michael Cullen said: “For a decade after its sale, there were stories of financial scandal, of asset-stripping, and of neglect.
“In recent years, Toll Holdings has worked hard to turn this around, but in the end all have acknowledged that it is not possible to run an effective rail network in New Zealand without significant financial support from the New Zealand taxpayer.
“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.”
He added: “New Zealand’s rail network is now back in New Zealand’s hands. We will now be able to make the investments necessary to develop a world-class 21st century rail system for New Zealanders.”
Prime Minister Helen Clark said government ownership would allow it to make strategic decisions and investments to help rail make New Zealand more sustainable.
“One locomotive can pull the equivalent freight of 65 trucks,” she said.
The Prime Minister said by 2040 the government hoped that total freight transport movements would more than double.
• The 1 July deal was the New Zealand Labour government’s second major transport renationalisation. It bought back Air New Zealand after it nearly collapsed in 2001, 13 years after the carrier had been privatised.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Robert J Howie, Glasgow, UK
I would of course hope for a bright future for KiwiRail being a rail traveller and supporter but it begs the question why the railways declined under the State in the first place? Will there now be re-opening for example? More trains?Extension? In some countries State syatems do well but there has seemingly been a chequered situation in NZ. It does not naturally follow that a government control is some Heaven-on-earth salvation. History shows otherwise.
Robert J Howie, Glasgow, Scotland,, UK
It is all very well of John Sessions to wail about the railways in the UK being in private hands. I live in the UK and passengere numbers have been rising for years indeed they are at their highest since the old days in 1948 when the State took them. Now there are a list of private companies and the passenger numbers are up! Here in Scotland, FirstScotrail does an excellent job. Not all private situs are bad. Change days from the old British Rail days and a great improvement. Glasgow has the largest suburban network outside London and even old shut lines are being brought back as well. Maybe he should ask himself why the railway is more popular now than in State control days in the UK? With a reduced network and poor services according to a Kiwi that emails me I hope that New Zealand will see a resurgance and be like the UK system which is roaring ahead trying to cope with the number bof passengets.Why moan? It is a success!
john sessions, Sheffield, Great britain
I am travelling to new zealand in the autumn of this year with my wife and i am looking forward to travelling on the new publicly owned railways in that beautiful country. It makes a refreshing change that a governement is prepared to take a bold move like this unlike the british government who will not bring their railways into public ownership with the result being a privatised railway heavily dependent on the taxpayer and giving a poor service in return. Good on ya new zealand
Rob Kleinhuis, Ouderkerk a/d Amstel, Holland
Me and my wife have travelled your beautiful country in April/May this year and enjoyed tremendously. We love to travel by train and we did so on the Overlander from Wellington to Auckland in a relaxed atmosphere and enjoying the countryside. We have travelled by train in many countries around the world and can say one thing: keep the railways in the hands of people who care, who put the customer first. We wholeheartedly wish your company and dedicated staff a bright future and hope to visit your country again and enjoy a Kiwi rail trip!
Preston Glass, LUTON, United Kingdom
Good to kinow that the New Zealand Government has renationalised the railways and ferries. Now the long slog to make the railways and ferries World Class. I sincerely hope it works. Everyone to support the improvement of the New Zealand railways or "KiwiRail"