Tuesday, 18 May 2010

The train set gets even more money. why? (updated)

Over at Kiwiblog David Farrar writes,
Steven Joyce has announced:
The Government’s commitment to invest $250 million to support the KiwiRail Turnaround Plan will help increase New Zealand’s economic productivity and put us on the path to faster growth, Transport Minister Steven Joyce says.

The Budget 2010 appropriation is the first round of Government support for the objectives of the $4.6 billion Turnaround Plan.

The Government has committed in principle to a total package of $750 million over the next three years, with final decisions on funding subject to individual business cases.

“The KiwiRail Turnaround Plan is designed to see the rail freight business become sustainable within a decade by getting it to a point where it funds its costs solely from customer revenue,” says Mr Joyce.

“In fact, the lion’s share of the $4.6 billion will come from the business itself.
The Government really has little choice. One can’t sell Dr Cullen’s train set. No one would buy it.
David I fear you have missed the point of your own statement. If no one will buy it, should it exist? If you are right there is an important message in the point you make. May be the train set should be thrown out in the rubbish.

To be honest I would guess that some parts of the set would be bought, just not the whole package. So what the government should do is put it up for sale and let bidders chosen which bit they really want. The rest can be thrown out.

Updated: Liberty Scott also wonders about the usefulness of the railways.

1 comment:

Libertyscott said...

I received a confidential briefing from Tranz Rail a few years ago, which basically said the only parts of the business which really made sense were the main trunk (Auckland-Dunedin), the line to the West Coast coal mines, and from Hamilton to the port of Tauranga (and the ferries). The rest were at best useful till they needed renewal to keep operational (run into the ground).

Tasmania is one step further. Its private railway owner said it was going to close the lot, and the government bought it all and is letting it limp on.