The possibility of the Government taking back control of the railways appears to be back on the table, with officials refusing to rule out the purchase of train operator Toll NZ.
National's finance spokesman Bill English said he had heard "persistent rumours that Finance Minister Michael Cullen was considering buying Toll.
NZPA has been told by some in the sector that large rail customers and the state owned enterprise that owns the tracks - Ontrack - have been urging Dr Cullen to buy the company, which is 100 per cent owned by Toll Holdings of Australia.
Dr Cullen refused to comment on what he said was a confidential commercial negotiation, but his office confirmed all options including a purchase remained on the table.
Toll and the Government have been involved in protracted and difficult talks about the access fee it should pay to use the tracks since 2003.
Renationalising the train operator has long been an option on the table but Toll NZ said today it remained committed to running a service in New Zealand.
"We remain in talks about the access right agreement," Toll spokeswoman Sue Foley said and refused to make any further comment.
Officials spoken to by NZPA played down the rumours that Dr Cullen was actively working towards a purchase of Toll.
They said talks were under way about sorting out the access agreement and purchase remained just one of the options that had always been on the table.
Mr English said any possibility of purchase needed to be made public.
"Talks have clearly been at an impasse for some time and this is reducing much needed investment from both track maintenance and trains," Mr English said.
"It would be in the Government interest and the community interest to clear up what is going on."
- NZPA understands that Toll has to make some decisions about the future by the end of the year because its sale and lease arrangements for some rolling stock are drawing to a close.
Toll's last annual report said while the company is yet to clinch an agreement for long term access fees to the rail network it is positive that it will.
The company's upbeat tone in its last annual report is in stark contrast to the prediction in a rail industry magazine this month that Toll may be pulling out of New Zealand frustrated with the Government and profits it is making here.
Toll has told the Government that it cannot afford to pay the fees it is looking for or even what an independent arbitrator found was reasonable.
As a result Ontrack has less money to invest in track maintenance and upgrades.
The latest set of accounts recorded $48 million of rail access fees, which is believed to be well below what it costs to maintain the network or the figure an independently agreed process came to.
Dr Cullen has long complained about the slow progress in talks and the state of the tracks.
Sector analysts say it is difficult to value the assets of Toll NZ's rail business since it is not listed and also runs other businesses.
Some have said the rail business is close to worthless, but it could make money if it sorted out access to the rail tracks on a cheaper basis.
If Dr Cullen did decide to purchase the company, it would mean the rail operation had come full circle since the sale of New Zealand Railways in the 1990s to a consortium led by Fay Richwhite.
They later onsold their shares before the share price plummeted and recently settled an insider trading claim without admitting any liability.
Toll has struggled since it took over the rail service and sold the tracks back to the Government in exchange for exclusive access rights and investment agreements from both sides.