Tongue-lashing for road firms from Tranz Rail director

By DANIEL RIORDAN transport reporter

Tranz Rail managing director Michael Beard has hit out at the country's road transport sector, saying it needs major reform from the Government.

In comments interpreted as laying the groundwork for Government rail subsidies, Mr Beard also said that road operators lack the commercial focus of rail and shipping.

He told a ports and shipping conference in Auckland on Wednesday that the lack of a well-developed policy to balance investment returns from road and rail meant New Zealand was wasting resources by duplicating infrastructure.

Unless the Government urgently addressed the imbalance between rail and road in its resource investment policies, artificial barriers would continue to prevent transport infrastructure from reaching its full potential.

The Government's development of a national rail policy provided an opportunity for this to be addressed, he said.

An example was a new port in Whangarei developed by Carter Holt Harvey, and the Port of Tauranga that would require a rail connection to the wider rail network.

Mr Beard said the alternative was several hundred trucks a day bringing cargo to the port, on single lane highways in a popular tourist area.

"Faced with those alternatives, the Government's policy is to invest in new roads. There appears no major interest in investing in the rail option. Is that sensible?"

He said the country needed a level playing field to allow "the invisible hand of the market" to direct investment resources to the most efficient area. The only major reforms in road transport had been the introduction of road-user charges 20- odd years ago, and the removal of distance limits allowing road to compete with rail in long-haul freight.

Rail also faced a tougher safety compliance regime than road, which gave road transport a cost advantage, said Mr Beard.

"Roading is treated as a public service in New Zealand, whereas rail works on a commercial basis. "That in itself needs addressing, and the sooner the better."

His comments drew a strong rejoinder from road transporters.

Road Transport Forum chief executive Tony Friedlander said Mr Beard's comments looked to him "like a plaintive cry for a taxpayer subsidy."

"Not being satisfied with having run the rail system down, they're now looking for the taxpayer to bail them out."

He said trucking firms met the full cost of their road use through the highest road-user charges in the Western world.

"Tranz Rail took over the track at nil value and leases the network at $1 a year," he said.

"It's hard to know what Mr Beard's idea of a level-playing field is."

Mr Friedlander said the Government would be "extremely silly" to pay for new railway tracks when Tranz Rail was having great difficulty operating existing tracks.