Saturday, May 18, 2024

David Farrar: Is it time to take the Interislander away from Kiwirail?

The Herald reports:

KiwiRail’s seemingly endless requests for more money is damning. At one point, KiwiRail assured Robertson when he was the Finance Minister that the worst-case scenario would be an extra $300 million before requesting $1.2 billion a few months later.

Not what most people regard as worst case.

It’s no wonder Ministry of Transport officials have raised the question of KiwiRail’s suitability to run the Interislander business in the medium to long term.

I think that is the real question.

But officials are already investigating how the market might respond to the hypothetical exit of KiwiRail, including whether rival operator Bluebridge could provide more capacity across Cook Strait.

They have mulled over whether the Interislander business could be separated into another SOE or sold via a trade sale.

The ripples of this failed project are already being felt beyond Cook Strait.

It is no longer only a question of what will replace the Interislander fleet but also whether KiwiRail should have anything to do with running the business.

The answer must be no. Ferries over Cook Strat is a competitive enterprise. It is not a natural monopoly like train lines. There is no reason taxpayers need to be paying out billions of dollars for one ferry service, when there are others that actually are profitable.

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders.


Anonymous said...

David, you need to look back at the Inter Island ferry services, of years past , that have led to the current service.

Many moons ago, we had the Wellington to Lyttleton service/ over nighter both ways - but then we did not move rail wagons in either direction.

Then came the move for Wellington - Picton -as NZ Rail (as it was known as then) wanted to move rail freight, and with increasing road traffic for heavy lorries - looked to include those as well.

When Blue Bridge, showed 'its nose at the open door' was not made 'to feel welcome at all'.

As NZ Rail, having been a Govt Dept, thought they had the monopoly as service provider. Strange that, once Roger Douglas became Minister of Finance / David Lane Govt, he could not wait to sell 'the family heirlooms'- NZ Rail being one - I recall Toll of Australia brought it - then found it was not worth the money spent, so 'resold it back to then NZ Govt' - became KiwiRail.

If you wonder why this business has not moved forward, look back, still has that Govt Dept Management skill & mind set running the place.

You only have to look at what they have tried to do - example - a new terminal in the top of the South Island, that went know where - a classical example - "of this would be good, but.."

Me thinks, that we are not going to see anyone (Unless it is a NZ rich lister on panadol - buying up) from overseas wanting to buy a "lame duck".

Anonymous said...

Retire the ferries and let a commercial enterprise take over...

Anonymous said...

why wouldn't the same logic apply to auckland transport? how is it that they are uniquely qualified to run buses, trains, ferries & now taxis (aka at local). how about getting out of everything & perhaps facilitate a common payment system to provide a frictionless experience for travellers?