The Herald on Sunday had a good editorial on Rail yesterday.
Under Labour, the whole operation was valued at $10.6 billion, which might reflect its replacement cost but not its ability to earn a return. Under National its value has been written down to no more than $1.3 billion, on which it will be expected to show a normal commercial return. Both figures are important to answering the basic economic question: is it still worth our while to maintain a railway?
Or to put it another way, if we did not have this railway, would we build it? Its performance in the post-war era would say no. Its passenger services, and even its freight, have declined in competition with sealed roads, cars and trucks, especially since restrictions on long-haul road freight were lifted 30 years ago. Don’t even mention how cheap air travel has become. Frequent capital injections from the taxpayer over the years have not made much difference and it seems the $750 million over the past three years will not bring the turnaround.
Precisely…if you had to contemplate building the rail network you simply wouldn’t do it, the numbers don’t stack up. They should dig it up and use the land for a dedicated truck and busway to get them off SH1.
Yet no government can contemplate closing it down, for two reasons: once lost it would never be replaced, and the Greens might be right. Oil prices, climate change, who knows what else, could make future generations glad to have it.
But for now, it has to be made more economic. It has a role to play in bulk freight haulage to ports from mills and mines and inland container bases. The main trunk between Auckland and Christchurch, including inter-island ferries, might pay its way. Commuter services in Auckland and Wellington should be run at a reasonable ratepayer subsidy. Other than that, pipedreams like an Auckland-Hamilton commuter service are just that.
I object strenuously to tax and ratepayer subsidies. If something needs subsidies it is uneconomic and should be left to die and the land and access put to better use.
The report that Labour brought to Parliament this week is another sign that something is happening. Its bleak forecasts on maintenance may be the worst imagined rather than the most likely. But it is important that rail continues to be assessed in economic terms and not romantic ones.
It cannot run on nostalgia. Losses must never be excused as “social investment”. It is a costly method of transport and it needs to be driven hard.