Recovery chugs into the freight industry

By Yoke Har Lee

Tranz Rail is seeing tentative signs of economic recovery, with forestry volumes having picked up between 25 per cent and 30 per cent from this time a year ago.

Managing director Dr Francis Small said freight volumes were at a record 13 million tonnes, a level not seen since rail had a mandatory advantage over road in the heavily regulated 1970s.

However, Dr Small declined to provide a glimpse into how this year's annual results would pan out.

Analysts polled by The Estimates Directory put profit at between $35.7 million to $46.9 million. This compared with last year's profit of $48.2 million.

Last year, freight revenue fell 3.4 per cent, reflecting the pressure on rates faced by the company.

Dr Small said capital expenditure, which had peaked at around $130 million due to heavy investments made in the last two years, would fall back to more conventional levels of around $50 million to $60 million.

He said a recent report saying that plans for a new ferry terminal at Clifford Bay had been deferred was not correct.

"We are still in the final stages of getting resource consent, after which we will review the ship replacement programme, whether to go for big or small ships. Based on that review, we will decide whether the terminal will be in Picton or Clifford Bay, then what to do within which time-frame."

Tranz Rail, which was keen to provide solutions to ease congestion in Auckland, had been frustrated by the opposition to it, Dr Small said.

"We believe rail has a role to play, amongst other modes of transport. The issue is one of getting car users off the road, to buses or rail. I think the issue has been confused with those talking of corridor access."