Main trunk line under threat

Toll NZ is threatening to shut down large chunks of the North Island rail network, including the main trunk line, the Independent Financial Review newspaper has reported today.

"Closing the Overlander - the Auckland to Wellington passenger service - is the least of the Government's problems," a source familiar with the matter was quoted as saying.

NZPA reported in July that the future of the main trunk line was not secure but that this was likely to be a negotiating stance adopted by Toll NZ in talks with the Government.

The IFR reported today that the Toll NZ board was developing an alternative business model, involving the closure of major rail corridors in favour of road transport for freight customers.

The proposal was well advanced and was not intended merely as a bargaining chip in Toll's negotiations with the Government.

The source, who declined to be named, said Toll NZ had no alternative unless a "sensible" agreement could be struck with the Government on access fees.

"We will go broke under the current access regime," he said.

Toll New Zealand's latest accounts show track access costs of $52.6 million in 2006 compared with $41.1 million in 2005. Ontrack, which manages the tracks for Toll NZ, is understood to be considering a $60 million-plus fee for the coming year.

- NZPA