NEW Zealand’s rail and ferry services were taken back into government ownership on 1 July and renamed KiwiRail — and the former prime minister who oversaw privatisation 15 years ago has been put in charge.

Jim Bolger, who was prime minister of the opposition conservative National Party, which sold the railways in 1993, was announced by the present Labour government as head of the new interim company to run the network.

The Bolger government received $NZ328 million (£125 million) in 1993 when it became the first country in the world to fully privatise its railways as a single entity. 

It sold the network to a consortium headed by US-based Wisconsin Central and a local investment bank. The Wisconsin-led consortium later went on to buy British Rail’s freight services and operate them as EWS — now owned by German Railways.

The New Zealand rail and ferry operations were sold in 2004 to Australia’s Toll Holdings, while the government bought back the infrastructure. Toll Holings Ltd today received a total of $NZ690 million (£363 million) from the government. The price includes a rail and car ferry, which crosses Cook Strait separating the North and South islands, and the leases on two other ferries.
 
Launching KiwiRail, finance minister Dr Michael Cullen said: “For a decade after its sale, there were stories of financial scandal, of asset-stripping, and of neglect.

“In recent years, Toll Holdings has worked hard to turn this around, but in the end all have acknowledged that it is not possible to run an effective rail network in New Zealand without significant financial support from the New Zealand taxpayer.

“By bringing our rail system back into public ownership — following the buyback of the tracks four years ago — we will spare future generations from subsidising a private rail operator and will be able to create an integrated, sustainable transport system.”

He added: “New Zealand’s rail network is now back in New Zealand’s hands. We will now be able to make the investments necessary to develop a world-class 21st century rail system for New Zealanders.”

Prime Minister Helen Clark said government ownership would allow it to make strategic decisions and investments to help rail make New Zealand more sustainable.

“One locomotive can pull the equivalent freight of 65 trucks,” she said.
The Prime Minister said by 2040 the government hoped that total freight transport movements would more than double.

•  The 1 July deal was the New Zealand Labour government’s second major transport renationalisation. It bought back Air New Zealand after it nearly collapsed in 2001, 13 years after the carrier had been privatised.

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