By Phil Boeyen, ShareChat Business News Editor
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Friday 7th December 2001 |
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The study, funded in partnership between government and local councils, says that the number of people travelling by train between Christchurch and Invercargill would need to rise from 50,000 annually to 95,000.
Economic Development minister, Jim Anderton, says the study noted that the viability would also dependent on low track rentals, a significant upgrade in rolling stock, the service being run by the new Tranz Rail/WCR joint venture and a change in timetabling.
"The general indication from councils is that it is unlikely they will continue to subsidise the service after February," Mr Anderton says.
"The facts were startling. About three times as many people hire cars to go to Invercargill as use the Southerner. The loss of the service would have an impact on the regional economies of less than 0.5%, and there is capacity on existing coaches to accommodate demand without putting additional traffic on local roads."
Mr Anderton met with local council representatives this week to review the study and he says there was agreement that the services would not be able to continue in their present form without significant public subsidy.
"At the same time council representatives felt that any money available from ratepayers for such a subsidy would be better spent on other regional development initiatives."
Earlier this year the government and local councils committed $240,000 to keep the Southerner running until February 10, 2002, while its viability was investigated. Further funding up to $65,000 was set aside to pay for the study.
Transport Minister Mark Gosche says the outcome shows that the viability study has been worthwhile because it has provided a basis for making an informed decision.
Tranz Rail (NZSE: TRH) announced last year it was getting out the passenger rail business to concentrate on it rail freight and interisland ferry services.
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