Restructure Of Rail Essential

Restructure Of Rail Essential Regardless Of Possible Ownership Change

The Rail Freight Action Group, consisting of New Zealand’s largest rail freight users, warned today that a major restructuring of rail services is essential regardless of whether ownership of Tranz Rail changes, if the country is to capture the full potential benefits of an efficient rail freight service.

“The model has to change. Another operator is unlikely to be significantly more successful than Tranz Rail if it operates in the same way,” said Cedric Allan, spokesperson for RFAG.

“Our members have grave concerns over the future viability of rail freight under the present model. This must be a concern to Tranz Rail and to any other owner of the company. Tranz Rail itself has been involved in discussions with Government on the possible restructuring of rail and we are well advanced with our own proposals for consideration by Government.

“Unless a potential new owner of the company is equally receptive to a restructuring of the way in which rail freight services are provided, the country has lost a major opportunity to obtain better outcomes.“

Mr Allan said RFAG had warned on many occasions that restructuring opportunities would be lost in the event of a hostile takeover of Tranz Rail by an alternative operator or asset stripper.

RFAG’s preferred model is for the Government to own the rail infrastructure and create opportunities for competitive services on rail, with service providers paying access fees. This would enable rail and road transport operators could compete on a level playing field basis.

“At the moment rail continues to lose market share to other transport forms, so major users are transferring volumes from rail to road wherever possible and New Zealand is losing export dollars because of the inability of some major exporters to negotiate acceptable rail freight contracts,” said Mr Allan.

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