Friday, May 21, 2010

New Zealand Push For Rail Freight Improvements

Broad Opposition Support but Labour Say Trucks are Better Served
Shipping News Feature

NEW ZEALAND – Many financial pundits say much could be learned by European and US governments about controlling their debt crises by observing the model provided by New Zealand over recent years. Programmes to eliminate public debt, innovate and privatise have caused a revitalisation of the economy despite much opposition but, where suitable, the authorities have not been averse to renationalisation when considered appropriate. Kiwi Rail was brought back into public ownership in a deal with Toll Holdings in 2008 with the government already owning the track.

Now the Government have showed their future intentions by allocating NZ$250 million immediately with a further half a billion over the next three years, subject to agreement, to promote freight and intermodal services. Some estimates forecast a doubling of cargo within thirty years moving by rail and it seems the authorities are willing to support industry when they say they intend to turn the company into “a sustainable freight business” within a decade.

The overall cost of modernising freight and passenger services has been stated as over NZ$ 4.5 billion but the passenger element is expected to finance itself. Labour opposition have referred to the Government as “misers” saying the investment in rail is paltry compared to the spending on road infrastructure. The country’s rail union however are delighted by the new investment but disagree that privatisation turned the country’s economy around.

“NZ$750m over 3 years is much needed investment,” RMTU General Secretary Wayne Butson said. “The long term plan for KiwiRail has many important elements, including investment in infrastructure to undo the neglect of 18 years of private ownership.

“We are also encouraged to hear John Key say that the government is committed to improving and retaining the network, and the apparent discounting of a future privatisation of rail. We should never repeat mistakes, which is what the privatisation years between 1993 and 2008 are now regarded as, that end up costing more to us as citizens and taxpayers.”