The ONTRACK network consists of:
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 tough business challenges, such as the deregulation of the land transport industry in 1982 resulting from the repeal of the Transport Licensing Act 1931 and the resulting growth of competition from road freight operators. NZRC continued to report heavy losses. 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:
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 several workshops - 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:
As a result of the land transport reforms, the NZRC was performing poorly, with revenues halved by the new competition. During the mid-1980s the NZRC was extensively rationalised. By 1989 large operating losses and interest generated a debt of $1.2 billion that could not be sustained.
NZRL was sold for $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 some $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.
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 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.
Separate talks continued between Toll and the Government on long term access arrangements. On 31 January 2007 Toll stated that "...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".
In December 2007, rumours began circulating that the government intended to buy Toll Rail back. However, Minister of Finance Michael Cullen would not confirm these rumours. The buyback was eventually confirmed with a government announcement in May 2008 that Toll NZ Ltd (less its trucking and distribution operations)had been purchased for $NZ665 million.
The New Zealand Government brought Toll NZ Ltd, less its Tranz Link trucking and distribution arm, on 1 July 2008 and renamed it 'KiwiRail'. It plans to spend an estimated NZ$25 million develop a modern effective rail system for New Zealand .
KiwiRail is headed by former New Zealand Prime Minister Jim Bolger.
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