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Council Votes To Buy Passenger Rail Services

NEWS RELEASE

5 October, 2001

Council Votes To Return Wellington’s Passenger Rail Services To Public Control

The Wellington Regional Council voted today to proceed with the process of returning Wellington’s passenger rail service to public control. The vote was thirteen to one in favour.

“I believe this decision will in the long term save Wellington’s passenger rail service,” said Council Chairman Stuart Macaskill. “The service is run-down and fragile, and has lacked committed ownership. It is our aim to make sure the people of Wellington have access to a safe, secure and reliable rail service. That is our goal, and public involvement in ownership is the best way to achieve it.”

The Council considered two main options in making its decision. The first option, favoured by the Regional Council, is for the Regional Council to form a 50:50 joint venture with a private sector rail operator, and then together purchase the rail system. The second option, favoured by some of the region’s mayors, is for the Regional Council to purchase 100 percent of the rail system and then franchise its operation to a private sector operator.

Today’s decision authorises council staff to proceed with the 50:50 joint venture option. Council staff will now begin the process of selecting a joint-venture partner, with whom it will approach Tranz Rail to purchase the passenger system.

“There are several benefits to the process we have chosen,” said Cr. Macaskill. “Firstly having a 50:50 joint venture will reduce the up-front cost of purchasing the Tranz Rail system. Secondly, having an experienced rail operator as a joint-venture partner will be very valuable when we come to negotiate with Tranz Rail. It will be harder for Tranz Rail to hide costs, or talk-up the price with a rail operator at our side.”

Cr. Macaskill said a third reason for choosing the joint venture was that this option doesn’t close off the possibility of moving to a franchise arrangement in the future. “We respect the view of the region’s mayors that they prefer a franchise option, and that option is not closed off by this decision. However, that would mean the Regional Council would have to purchase 100 percent of the rail system, without the financial support or knowledge of a private sector partner. We consider that is too high a risk for our Council to bear.”

Stuart Macaskill said that today’s decision was the first, necessary step to purchasing the regional rail services. “The coming months will see a great deal of work done by Council officers to formulate the joint-venture arrangement. We are also committed to undertaking public consultation when a final deal is proposed”.

“Public transport is a core responsibility of the Regional Council. It is vital that we maintain a safe, secure and reliable service for the tens of thousands of regional residents who use the service every day. I am convinced that this decision is in the best interests of the whole Wellington region.”

ENDS

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