the standard of The Standard

Well this post says it all. It is about as factually correct as the Korean Central News Agency.

Take this:

“Toll has been a classic asset-stripper: buy a key piece of infrastructure that should never have been sold, take as much profit as possible with minimal investment, and force the Government to buy the infrastructure back to prevent further economic damage.”

For starters, Toll never bought the track, which this implies. In fact Dr Cullen and the Labour government did a cozy little deal with Toll to bid for Tranz Rail. The Beehive press release here makes it clear that Toll and Dr Cullen were acting hand in glove. The government was "never forced", Toll never bought the infrastructure. Utter lies.

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Secondly, this “as much profit as possible” is rather hilarious. $34.7 million net profit after tax in 2007 is hardly raking it in on assets of $791 million. No wonder Toll wants out. The asset stripping is also a fascinating claim. How? What has been stripped? Maybe Steve Pierson knows better, or maybe he is interviewing Microsoft Word with his own manufactured delusions.

Thirdly, it claims that "lines have been closed". What? By the state? Only one line has been closed since Toll took over, the tiny Castlecliff branch in Wanganui (and it hasn't been removed). Even since privatisation the lines mothballed consists of Rotorua, Taneatua and Whakatane. Far more lines closed under government ownership in the 1980s (Kurow, Otago Central, Okaihau, Thames, Seddonville, Makareao). Not that this was wrong, but the implication is that services were dropped from those who used them - when in fact lines like Kurow had just two freight trains a week - hardly a reason to get excited.

So if the Standard has this standard of research and writing, you might ask what else it does well?

Muldoonism all round

Several blogs have commented, quite rightly, about Dr Michael Bassett's excellent column about the posturing on foreign investment by Labour. Bassett, as on of the more honourable Ministers of the fourth Labour government, clearly is non-plussed about his former colleagues being upset. Statements such as "the “whatever it takes” mentality that the Labour Party uses these days when they campaign for re-election" say a great deal.

Labour, having lost the votes of most businesspeople, much of provincial New Zealand, many Maori and most of those on middle to higher incomes, is now pandering to the Winston Peters crowd for votes. That's what Auckland airport is about, and the railways - the old Muldoonist crowd that is wary of foreign investment, the working class semi-literates who are easily fired up with xenophobic rhetoric.

Winston's Muldoonism isn't new. Back when he visited North Korea he was quoted as saying there is a lot for New Zealand to learn from North Korea. Funny how Labour chooses a man who is anti-foreign investment to be the Minister of Foreign Affairs isn't it?

Whatever it takes - Labour has spent the surplus up, to make tax cuts harder, but can also claim any spending cuts will "hurt health and education", forgetting that the increases have done little to improve either. Labour will scaremonger that National will hurt the poor and damage the fragile economic growth, that has been in decline in the last few years.

Stop worshipping the cruel NHS

The NHS is Britain's great fraud. You are forced to pay something called "National Insurance" which if it were an insurance scheme, would have been put out of business for fraud. The NHS is a politically driven bureaucracy that cares nothing for service and responding to consumers, but acts like an old fashioned eastern European Marxist-Leninist bureaucracy.

You see that in the latest news, when it denies one of its former staff eye surgery to stop her going blind. This is the sort of story you expect from those gloating how awful health care is in the USA - but no, it is socialist medicine in the UK. She is instead paying twice - paying privately £800 a shot for treatment.

So if it were suggested that under "National Insurance" you could stop paying it premiums and pay premiums for a service that works for you, the left would cry "privatisation" and "unfair" - meanwhile the system would let a former nurse go blind.

oh and the Tories wont do anything about it, because no one wants to confront the truth about the NHS - it performs abysmally. Hardly surprising, as it is the third biggest employer in the world. How can anything that big and state owned possibly be responsive?

Moral equivalency again?

Israel withdraws from Gaza - leaving it to the Palestinians to govern and manage.

Palestinians choose a government committed to engaging in aggression against Israel and destroying it - Hamas

Palestinians engage in a small scale civil conflict splitting the government between Gaza and the West Bank, leaving Hamas in Gaza.

Hamas decides to make Gaza not a haven for peace, development, economic growth and freedom, but a base to wage war against Israel - indiscriminately firing rockets into Israel proper (you know the country that is internationally recognised, not occupied territories) killing and injuring Israeli civilians.

Israel puts up a blockade against Gaza to stop entry/exit of citizens across the land border, and stops selling electricity to Gaza as retaliation. Gaza still has an open land border with Egypt.

Israel is accused of being unreasonable, against those who wish to destroy it and attack it.

Hamas continues its bombardment, Israel responds by attacking bases in Gaza from where rocket attacks continue, killing 120.

Hamas sends a gunman in to shoot children at a school in Jerusalem.

So who wants to defend those who execute children for political purposes again?

So where IS rail viable?

Now despite all the doom and gloom about the rail network, the truth is that SOME of it is commercially viable. To show this I wanted to link to a map of the network on Ontrack's website - Ontrack being the state owned enterprise responsible for the railway network, but it doesn't have one.

Wikipedia does though here >>>>

Now of that network, you can split rail into five main businesses: Coal, logs/wood products, containers, milk and commuter passenger rail. The long distance passenger rail services by themselves could never sustain any of the lines. There is other freight, but it also is of a far smaller scale than any of the others, worthwhile on a marginal basis but not on its own in most cases.

Coal is predominantly West Coast to Lyttelton, but also some from Southland to Timaru and within Waikato (Rotowaro to Mission Bush). The West Coast line is viable for coal and that's it. The other services rely on other freight to bear the cost of the lines.

Logs/timber traffic is carried predominantly Murupara-Kawerau-Mt Maunganui or Auckland. Also Kinleith to Auckland/Mt Maunganui. There is some activity in Northland and Wairarapa to Wellington. However, it is the Bay of Plenty timber traffic that matters. Despite popular misconceptions, logs are not important freight on the Gisborne line (nothing really is, despite some forecasts in recent years). There is certainly insufficient log traffic for any of the Northland lines to be viable, with only the Murupara-Kawerau-Mt Maunganui/Auckland, and Kinleith lines really retaining enough traffic to be viable.

Container traffic is essentially movements between main centres and ports. The viable routes here are the North Island Main Trunk line, and the main southern line from Picton to Christchurch/Lyttelton and down to Dunedin/Bluff, with worthwhile flows between Waikato and Mt Maunganui. Beyond that, there really isn't enough freight to Taranaki or Napier to sustain those lines for this traffic.

Milk traffic forms the last major freight traffic on the lines. These movements are mainly southern Hawke's Bay - Manawatu - South Taranaki, Southland-South Canterbury. Again, these largely use routes carrying other freight, but do help sustain them.

As far as commuter rail is concerned, in Wellington it has a future, although the Johnsonville and Melling lines are not at all viable, money is being poured into it all so is really a sunk cost. In Auckland it is a major waste of money, but again partly a sunk cost.

So what is left? Well surprisingly quite a lot of the network is probably commercially viable, but frankly there are quite a lot of lines that have no economically viable future, unless some major freight customer wants them:
- All lines north of Waitakere in Auckland (expensive to maintain, low capacity)
- Rotorua and Taneatua branches (simply no viable freight)
- Napier-Gisborne (with big questions to be asked about Napier south to Oringi).
- All lines in Taranaki except south of Hawera (some expensive to maintain)
- Masterton to Woodville (mainly useful as a diversion for the main trunk line!)

The reason others are worthwhile comes down to either a single major customer, or having enough general freight. The latter is really just the north-south main trunks in both islands. Now if the government could only swallow those closures (or simply opening lines Toll doesn't want to operate to others if they wish), then there might be a viable railway for the trunks and the few bulk commodities that rail can handle well.

What does THAT network look like? Well this:

Not so bad really, with dotted lines where lines probably should close in the next few years (Napier, Southland and New Plymouth). Beyond that if Solid Energy, Fonterra and the forestry sector want rail, they should buy it - since all of the lines outside the main trunk are almost entirely about them. There is no reasons for the state to subsidise their freight movements.

Certainly the track is not worth the nonsense "replacement value" capital worth on the Crown's books of NZ$10.648 billion as listed in Ontrack's annual report. Now this DOES include some prime real estate, like Wellington railway station. That is where there certainly is some value, but $5.4 billion book value for railway infrastructure is simple accounting sorcery. No one would pay that for it, not in scrap and certainly not to charge someone to use it. If the government offered it for sale, that is not what it would go for, nothing close. The $4.9 billion for the land is similarly so, given that most of the land is a sliver of a corridor.

Oh yes I did forget one thing, the ferries. They ARE worth a good bit of money - the only consistently profitable part of the railway system for decades.