Editorial: Halt tracks payout to Tranz Rail now

Tranz Rail's announcement that all its passenger services are for sale may have taken most people by surprise last week. But not those Auckland representatives who have already agreed to buy the company's lease of rail "corridors" in the region. They say they discovered long ago that Tranz Rail was not prepared to commit much more capital to Auckland commuter services.

In part, the company's attitude can be understood. It knows that, thanks to the previous Government's restructuring of the region's administration, Auckland is sitting on a pot of potentially $1 billion of assets and cash amassed principally from profits of the port. By law the funds can be spent only on urban transport and drainage, and the city's long-recurring dreams of rail gave the company cause to hope for a handsome capital gift in the form of upgraded stations, bus-feeder services, double-tracked lines and much more.

The Regional Council was not inclined to provide so much capital to one company that would bear little or no risk. Tranz Rail was not inclined to give potential rivals access to the corridors it leases from the Government for next to nothing. The stalemate was resolved by an agreement for local bodies to buy the lease for $75 million.

They have asked the guardians of the local pot, Infrastructure Auckland, for $40 million and the Government's agency, Transfund, for the rest. Both were due to make their decisions this week. Tranz Rail's announcement now changes the picture.

Why proceed with plans to give the company $75 million for no tangible return, when a new national passenger-rail operator might soon be on the scene? Unlike Tranz Rail, the buyer will not control the tracks. It may be that Tranz Rail can sell its passenger services on condition that others will also be allowed to use the lines. That may be a condition the Government could secure since it remains the ultimate owner of the corridors.

These are among the questions the Regional Council and its partners, Auckland, Manukau, Waitakere and Papakura city councils, could stop to consider now. The board of Infrastructure Auckland should be in no hurry to commit its funds until the picture is clearer. Transfund, on its performance so far, will certainly be in no hurry.

It sticks in the craw that the public should give Tranz Rail $75 million for an arrangement that, of itself, provides not one extra train, track or ticket office. Certainly the corridors have value that theoretically could be recovered if used for something other than rail. But that is never likely.

Tranz Rail has said there will continue to be long-distance and commuter rail passenger services. That means that if it cannot find a buyer it will maintain some sort of service. If there are no better offers for Auckland's service, the awful possibility remains that Tranz Rail will pocket $75 million for doing nothing and end up enjoying all the capital improvements, service subsidies and patronage fed to it by an integrated bus network into the bargain.

All told, the councils are taking a gamble far in excess of $1 billion on this transport scheme. That is just the establishment cost. Even if it attracts all the patronage they hope for, it will require annual subsidies, from ratepayers and taxpayers, much higher than at present. And it probably will not attract the desired patronage unless Aucklanders change not only their travelling habits but their mode of living.

The system is based on three, possibly in time, four, railway lines which serve only a fraction of the routes Aucklanders travel every day. To make it worthwhile, city planners will have to entice people into high-density developments within easy reach of the bus-rail routes. They intend to design the city to suit the transport system. That's the scale of it. Let's not make decisions just because the money to start is there.

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