Forum Archive Index - October 2000

[Marilyn Munroe <who.c@res.co.nz>]

Changes are in the wind for Transrail. An announcement is tipped to be
made at the annual general meeting. Will the new chief executive Michael
Beard be like Richard Prebble and save rail?

The crux of the problem is that the business generates insufficient operating cash flow to repay investors, and fund renewals and improvements.

Wisconsin Central the U S cornerstone shareholder brought in at a time when U S markets looked more favorably on the rail sector

They missed the essential difference between here and there. Over there has large population centers which are widely dispersed. Over here is a long hilly country with a great ditch in the middle, and a large portion of the small population concentrated in the top end.

In my opinion the money that investors have put into Transrail is a sunk cost. They only point that I am uncertain about is how long it will take for the bubbles to stop rising to the surface.

The demise of Transrail as a viable freight operation raises an interesting public policy problem.

Should the government let the rails rust and allow all the containers previously railed from the Port of Auckland onto the Southern Motorway, containers going from one end of the country to the other join all the other traffic trying to edge around the Paikakariki Bluffs, allow every log felled on the Volcanic Plateau through the main street of small towns on their way to Mt. Manganui, or all the coal for export to travel the narrow road through the Buller Gorge?

This outcome is unlikely. It would upset other road users, upset residents along the routes, and thrash the roads to bits.

Thus it is in the public interest to have a viable rail system. The puzzle is to publicly fund the rail system without draining the public purse too much.

If what I predict happens the taxpayer should not bail out Wisconsin Central. They should wait until Wisconsin Central gives up and walks away.

Boop-boop-de-do Marilyn

Disclosure        Former railroad worker. I have;

            Leant against the Nor Wester looking over the Staircase Viaduct

            Waited in the middle of the night for trains to cross at Mangaphai

            Gazed in wonder at the Wilsons Whiskey stacked in the Dunedin goods shed

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