Monday, May 05, 2008

NZ Herald hits rail issue on the head

Today's NZ Herald editorial has made the point that is ignored by the anti rail privatisation church:
"If those private owners who put their money into the assets did not maintain their investment, there must have been a reason. They would surely have not let those assets deteriorate if rail was truly competitive with road transport and capable of realising a good profit. Passenger services would not have ended if people had viewed trains as a preferred means of transport. Most recently, Toll had been unable to make the business afford the rent that the Treasury wanted for use of the Crown-owned track network. Clearly, there was a significant distance between the profitability of the rail service and the cost of infrastructure maintenance."
Absolutely furthermore "People will also take some convincing that modernisation, in itself, will make rail attractive to customers. Evidence supplied by Wisconsin Central and Toll suggests there is a substantial, perhaps unbridgeable, gap between it and roading in purely economic terms."
So you see, it was economically rational to run down the railway system. It simply wasn't worth it. Unless of course you believe the nonsense about the environment, or you want a train set to run.


Anonymous said...

He could have bought several nice train sets from trademe. Probably one for every taxpaying person in the country.

Anonymous said...

They did spend a couple of hundred million in 4 years so there was certainly some investment into the rolling stock. Of course there was always going to be a significant disincentive for Toll to put too much of their own money into the business, given the Government ownership of the track and clear interest in acquiring the rest.

However the view of many is that a reasonably modern model similar to many of the other SOEs would be the best thing for it, and that given doubt about middle east stability, oil supplies and global warming, there is a role to play for rail over and above pure commercial concerns- how about a conduit to provide the apprenticeships and trade skills training that was so decimated by National?

Opinionated Libertarimum said...

The Sydney Morning Herald finds the whole thing hysterical...

Anonymous said...

I have to agree with anonymous regarding their first two sentences; remembering that Wisconsin Central also spent millions in their early years on investment (turbocharing the DFs, the acquistion of the DQs, the acquistion of the Mk II carriages, and so on).

The issue really was with Fay/Richwhite; they were in the business of bean counting. With rail, you cannot bean count, you need to do things the way that Ed Burkhardt did.