Upgrade to rail system can now begin – Cullen

“The rail network is now back in public ownership, bringing to an end one of the most disastrous privatisations in New Zealand history,” Finance Minister Michael Cullen announced today.

“The government last night, bought the track off Toll Rail for $1 and will soon start unrolling the substantial investment programme agreed to in the Heads of Agreement between the Crown and Toll Holdings in October, last year.

“Toll Rail will invest $100 million in rolling stock. The government is committed to investing $200 million over four years on upgrading the track and replacing worn out bits of the network.

“I am confident we can get the work underway quite soon. The infrastructure is seriously run down so we will want to move as quickly as possible. It is also likely that $200 million will not be enough to cover all that needs doing and that we might have to put up some more money in the future.

“The government’s objective is to shift people and freight on to rail to ease traffic congestion on the roads and as a cost competitive and environmentally sustainable alternative to road transport,” he said.

Transitional arrangements are that Toll Rail would manage the track under contract until September during which time the New Zealand Railways Corporation would set up the structures and personnel for its new “TrackCo” role.

Cameron Moore would take over as chair of the board today with other board appointments to follow in the next three weeks and a new chief executive expected to be appointed soon.

“Toll are hard operators but their record in Australia shows that they are also successful and I am satisfied that the deal the government has entered with them contains sufficient protections in to safeguard the public and the national interest,” Dr Cullen said.

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