Editorial: Overlander will survive if it should

When the overnight Northerner between Auckland and Wellington made its last run two years ago, the operator, Toll, said it was confident the daytime Overlander train service would continue to thrive. Tourists attracted by an array of spectacular views provided the foundation for its survival, a spokeswoman said. So much for optimism. Since then, passenger numbers on the Overlander have dropped from 90,000 a year to fewer than 50,000. Toll says the service is losing about $2 million a year. Unsurprisingly, the company has decided to close it from the end of next month.

That date will not pass without a sustained attempt to save the Overlander. Toll's decision has been greeted with dismay in several quarters. There will be redundancies among staff, who have battled to provide an acceptable standard of service. Equally worried are people in small towns along the route, who fear the effect on local businesses. Then there are those who see a part of the country's infrastructure being abandoned after 98 years of sterling service. And this at a time when in some countries, trains are a prime means of leisurely sightseeing in pleasing surroundings.

That is far from the case with the Overlander. The previous owner installed a windowed lounge from which to view the passing scenery, but the condition of the train and its carriages is tatty on a good day and decrepit on a bad. The Toll spokeswoman was half right. The Overlander depends not on New Zealanders, who prefer to travel to Wellington by car or use cheap airfares to make the journey in 60 minutes. It relies on overseas tourists, who want to see the magnificent scenery of the central North Island. But gaining their patronage requires smart marketing and a standard of travel approaching, if not equalling, the great overseas rail journeys.

Toll never showed much inclination to spend the money required to achieve that. Freight has been its main focus since it took over Tranz Rail three years ago. The Overlander's dwindling patronage was, in part, a reflection of its indifference.

The campaign to save the Overlander, or at least gain a reprieve, focused first on persuading the Government to subsidise the service. The cost to the taxpayer would be $1.75 million for annual operations and $500,000 for new carriages. Wisely, the Finance Minister resisted. Now, the focus is on regional councils propping up the service with money from ratepayers.

As with Government subsidies, this is a track not to be trodden. Who knows where it could lead? Can regional councillors not recall the huge losses, passed off as "social dividends", amassed by NZ Rail in pre-privatisation days? Or that when the Southerner was taken off the rails, an assessment commissioned by the Minister of Economic Development concluded that subsidies of any sort were not a viable option.

The solution, if there is to be one, lies in another operator believing in the potential of the Overlander. The Government bought back the national track network as part of the deal that led Toll to move across the Tasman. The idea was that it could invite in a competitor if freight on a line fell below a certain level. Equally, there was room for a new entrant if the company opted out of a service.

This opens the way for an operator who sees a profitable future in a well-promoted, high-quality service that will attract overseas tourists. That, not nostalgia or some fuzzy notion about a coming golden age of rail, is the key to the Overlander's survival. If it has genuine potential, a new operator will emerge.