NZ track access pricing negotiations continue

Negotiations with New Zealand Treasury over access charges on the national rail network were progressing, Toll Holdings managing director Paul Little said on Friday (July 27). However, Mr Little would not commit to a timeframe to achieving an agreement with the government. &#8220We were struggling to see how we could get an adequate return, so we’ve been talking to the Treasury about working through that problem,&#8221 Mr Little told Lloyd’s List DCN. &#8220We’re looking at a number of measures that really recognise this problem of return on investment more than anything else.&#8221 Users of the rail network have blamed a stalemate on track infrastructure investment and development on the ongoing negotiations between Toll and the government. Mr Little said at the Transport:Tthe next 50 years conference in Christchurch that commercial returns available on rail were inadequate. &#8220The private sector can’t in New Zealand, can’t in Australia, generate an adequate return on the massive investment that’s needed to run an efficient rail system,&#8221 he said. &#8220The outcome is: governments have to be involved in financial support. &#8220They need to be involved in setting the vision, setting the parameters and helping the private sector, and to work with them, to achieve those sorts of outcomes.&#8221 Mr Little told the conference that New Zealand regulators and operators needed to work to improving rail’s share of the transport task. Toll NZ holds a monopoly hold over rail operations in the country. &#8220A strong and efficient logistics capability is essential &#8211 it’s not desirable, it’s essential,&#8221 Mr Little said. &#8220It’s all very well to moan and groan about exchange rates &#8211 they come and they go. There’s not a lot you can do about them. &#8220But I promise you, unless New Zealand has an efficient, domestic rail capability, it can’t be globally competitive.&#8221 When Toll acquired an 85% stake in Tranz Rail Holdings in 2003, it committed to investing significant capital in new rolling stock and locomotives. Toll’s recent agreement with Third Avenue to acquire the 10% remaining stake in Toll NZ (formerly Tranz Rail Holdings) would allow it to move ahead with expansion plans, Mr Little said. &#8220The 10% missing ownerships has really frustrated our progress to a large extent,&#8221 he said. Mr Little was expecting the deal to be &#8220done and dusted&#8221 by the end of September. &#8220It’s taken us a lot longer than we would have envisaged to get to full ownership, but nonetheless, we’re very pleased that we’ve been able to arrange that,&#8221 he said.

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