Hon Dr Michael Cullen
Minister of Finance

2 July 2008 Media Statement

Government reveals ‘Plan B’ on rail

The Labour-led government has today revealed that its buyback of New Zealand’s rail system was influenced by plans to close regional rail services throughout the country, Finance Minister Michael Cullen said today.

Dr Cullen has released a list of services that was the centrepiece of Toll’s ‘Plan B’ which hung over negotiations with the government over the subsidy for the Australian firm’s operation.

The Labour-led government bought back the rail operation and launched KiwiRail yesterday.

“A modern rail system is vital for New Zealand’s economic future,” Dr Cullen said. “With the rising cost of petrol and the threat of global climate change, New Zealanders know we have to use more efficient transport methods.

“This is especially true for regional economies. The communities who have already lost their rail services know the pain that closures can cause.

“John Key says we should have left Toll in charge and refused to pay for any infrastructure investment. I invite him to travel to the regions that could have had their services axed and to explain his stance.”

The services that could have been closed under ‘Plan B’ are:

• The Overlander passenger service
• The Central North Island section of the Main Trunk Line (Te Kuiti to Palmerston North)
• Northland Line
• Taranaki Line
• Hawke’s Bay Line
• Napier to Gisborne Line
• Wairarapa Line north of Masterton
• Picton to Christchurch (freight + passenger services)
• Greymouth to Hokitika Line
• Invercargill to Bluff Line
• Invercargill to Wairio Line

ENDS

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