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New Zealand Railways Corporation (NZRC) is the state-owned enterprise that manages, maintains and operates most of New Zealand's rail transport system on behalf of the Crown. It has two main businesses:


1981-1990: National rail landowner, network provider and train operatorEdit

Like the New Zealand Railways Department that preceded it, NZRC had a responsible Minister, the Minister of Railways. This ministerial office was dissolved in 1993.

NZRC was created as a statutory corporation by the New Zealand Railways Corporation Act 1981 from the New Zealand Railways Department. Along with rail operations, NZRC inherited New Zealand Railways Road Services bus, truck and parcels services and SeaRail inter-island ferries.

During the 1980s NZRC faced many business challenges, such as the growth of competition from road freight operators following the deregulation of the land transport industry in 1982 by the repeal of the Transport Licensing Act 1931. NZRC's revenues were halved by the new competition.[1] In 1984 international consultants Booz Allen Hamilton reported to the National government on how a viable rail network could be created. The report recommended, amongst other things:

  • The reduction of staff numbers;
  • Re-orienting freight services towards bulk commodities;
  • Increasing the length and overall weight of freight services;
  • Rationalisation of the locomotive and wagon fleet;
  • Rationalisation of the railway workshops; and
  • Re-focusing long-distance passenger services towards tourists.

This prompted the Opposition Labour Party to launch a "Save Rail" campaign. Despite this, rationalisation of NZRC began with the election of the Fourth Labour government in July 1984. Staff cuts were drastic, infrastructure was reduced and older classes of locomotives were scrapped, and workshops at Addington (Christchurch), East Town (Wanganui) and Otahuhu (Auckland) were closed. In 1985 NZRC began a major corporate restructuring program, transforming the old functionally-based branch structure into three core business groups:

  • Railfreight (later Railfreight Systems), combining rail and road freight and including all rail engineering functions;
  • the Passenger Business Group consisting of New Zealand Railways Road Services passenger and parcels operations, later branded Cityline for suburban rail and bus services, InterCity for rail and bus long-distance services, and Speedlink for rail and road parcels; and
  • SeaRail, the rail and road ferry service between the North and South Islands.

By 1989 large operating losses and interest generated an unsustainable debt of $1.2 billion.[1][2]

1990-1991: Break up and asset sales Edit

New Zealand Rail Ltd (NZRL) was established as a Crown Transferee Company under the provisions of the New Zealand Railways Corporation Restructuring Act 1990, and took over NZRC's rail transport and shipping activities including the rail tracks on 28 October 1990, leasing the rail land corridor from NZRC for $1 per year. Branding initially remained unchanged, except that suburban passenger services were rebranded CityRail.

NZRL was sold for NZ$400 million to a consortium of Wisconsin Central Railway (40%), Berkshire Partners (20%) and Fay, Richwhite & Company (40%) in 1993. The company was renamed Tranz Rail in 1995, with urban passenger services rebranded Tranz Metro, long-distance passenger Tranz Scenic, and freight Tranz Link. Tranz Rail was purchased by Toll Holdings in 2004 and renamed Toll NZ.

Non-core assets remained with NZRC prior to their disposal. Many of these assets were written down by the Government, for $830 million. Speedlink Parcels was sold to New Zealand Post, and InterCity road services were sold in 1991 to Intercity Group New Zealand Limited, a group of four of the country's largest private coach companies – Ritchies Coachlines, Tranzit, PTL Route Services and Nelson SBL. Railway stations in Auckland, Rotorua, Christchurch, Dunedin, Napier and Oamaru were sold, along with substantial tracts of land previously used for rail operations. Cityline bus services were sold to various purchasers.

1990-2004: National rail landowner Edit

Ownership of the rail corridor underneath the tracks remained with NZRC, which managed the lease of the corridor to NZRL (Tranz Rail 1995-2003, Toll NZ 2004) until 2004, when the Crown re-acquired the rail track infrastructure from Toll Holdings. A separate deal transferred ownership of the Auckland metropolitan rail network from Tranz Rail to the Crown in 2001.

2004-present: National rail landowner and network provider Edit

From 1 July 2004 NZRC assumed the Crown's responsibilities under the rail access agreement with Toll (repurchase of the rail network), and adopted the trading name ONTRACK.[3] Recently ONTRACK began Project DART, a major $600 million upgrade of Auckland's suburban railway network, and will also upgrade parts of Wellington's suburban network. These upgrades, along with other projects around the country, followed years of under-investment in the rail infrastructure.[3]

Track access negotiationsEdit

ONTRACK and Toll NZ were in dispute about track access fees from mid 2006 and an independent arbitrator, Bill Wilson QC, was called in to resolve the issues.

Separate talks continued between Toll and the Government on long term access arrangements. On 31 January 2007 Toll stated that [4] "...the discussions with the Crown on a long term sustainable access regime have generally been positive", but "Toll NZ is still concerned that the Crown appears to be unwilling to recognise the inequality of the funding support between road and rail and the need to adopt a more commercial approach to track access management".

2008-: National rail landowner, network provider and train operatorEdit

In December 2007, rumours began circulating that the government intended to buy Toll Rail back. The buyback was confirmed with a government announcement in May 2008 that Toll NZ Ltd (less its trucking and distribution operations) was being purchased for $NZ665 million.[5] The purchase was completed on 1 July 2008 and the company renamed KiwiRail.[6] It plans to spend an estimated NZ$1 billion over five years to develop a modern effective rail system for New Zealand. Most of this expense is in purchasing new locomotives to replace aging stock.[7]

On 1 October 2008 KiwiRail became a subsidiary of NZRC, the ONTRACK brand continuing to be used by the infrastructure arm.[8]

See also Edit

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  1. 1.0 1.1 Evans, Lewis; Grimes, Arthur; Wilkinson, Bryce; Teece, David (1996). "Template:Link". Journal of Economic Literature (Nashville) 34 (4): 1856-1902, 
  2. Template:Cite paper
  3. 3.0 3.1 Ontrack - a key player in rail renaissance - industrial safety news, Volume 3, Issue 1, Summer 2008, Page 22
  4. Xtra Business - Toll track access (31 January 2007).
  5. Rail buy back marks new sustainable transport era. New Zealand Government (5 May 2008). Retrieved on 2008-13-05.
  6. NZPA (2008-07-01). Bolger to head Govt's 'KiwiRail' service. The New Zealand Herald. Retrieved on 2008-07-04.
  7. Allan Swann (2008-10-17). Rail boss outlines $1 billion spending plans. National Business Review. Retrieved on 2008-10-01.
  8. NZPA (2008-09-24). Single SOE for state-owned rail companies. Otago Daily Times. Retrieved on 2008-10-01.

External links Edit

Template:NZ state-owned enterprises Template:NZ RailOps

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