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Greater Wellington to approach Toll Holdings

Greater Wellington is the promotional name of the Wellington Regional Council
News release
Friday 12 December 2003

Greater Wellington to approach Toll Holdings about future of passenger rail system

''Preliminary discussions with Toll Holdings about the future of Wellington’s passenger rail system will be sought before Christmas'', said Greater Wellington Regional Council Chairperson, Margaret Shields following a decision yesterday by the Regional Council. “In the last few months some potentially significant barriers to a solution have been overcome, and as a result the Council has agreed to undertake discussions with Toll Holdings about negotiating either a new contract for passenger rail services, or some level of public ownership. A long-term solution to the problems with Wellington’s commuter rail system now appears possible.”

“Let me be quite clear. The Council decided yesterday only to pursue preliminary discussions with Toll Holdings and the government. Only when we know Toll’s intentions will we be able to decide what our future course will be. If Toll decide to retain the business, we will seek a new contract. If they decide to sell, we will consider the possibility of purchasing some level of ownership.”

Ms Shields said the Council’s decision was made possible by significant changes to the ownership of Tranz Rail, and by the government’s actions to assist us achieve a robust long-term solution.

“The problems with the existing arrangements are substantial. The business has been for sale for three years and as a result there’s been no investment in rolling stock, some of which needs urgent upgrading. Also, Tranz Rail is an unregulated monopoly meaning Greater Wellington has been unable to get information from Tranz Rail about the costs of running the system. Without this information we have not been satisfied we get value for money from our $17.5 million subsidy.”

Ms Shields said that four potentially significant changes had taken place in the last few months meaning that a solution was now possible.

- Toll Holdings has completed its purchase of Tranz Rail. Toll has indicated their willingness to discuss the future of the business with Greater Wellington.

- The government has taken ownership of the tracks and Wellington railway station, although Toll holdings has retained exclusive track access rights for Tranz Metro.

- The legislative barriers to council ownership of transport infrastructure have been removed.

- Transfund NZ has indicated its willingness to support Greater Wellington reaching a solution.

Ms Shields said that in the past few months Transfund had become actively focused on finding a solution to the Wellington rail issue. “The focus on transport issues tends to be on Auckland. Wellington’s needs are also important, especially considering our rail system carries ten million passengers each year. Over the past few months Greater Wellington has worked closely with Transfund, and I’m pleased we’re working toward the same objective.”

Ms Shields said either a new contract with a committed operator, or some level of public ownership would provide a solution to the problems of under investment and the lack of long-term focus.

“The urban rail system needs an owner committed to the long-term maintenance and upgrading of the asset. The public sector is clearly well qualified to take a long-term approach, but so would a new operator who is prepared to invest in the system. If Greater Wellington did take some ownership of the key assets we do not intend to be the day-to-day operator of the system, we would contract the running of the business to a passenger rail operator.”

Ms Shields said that the next step in the process was for Greater Wellington staff to approach Toll Holdings to discuss the possibility of a new contract or sale of the business.

“I am hopeful that Toll will respond positively to our approach. Our experience so far is that they are straightforward and businesslike in their dealings. If some form of public ownership did become a possibility, then there would also be consultation with the public. Either way it will be early to mid 2004 before we know which option is likely to succeed.”

ENDS

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