KEY POINTS:
Talk about rubbing salt into the wound.
The National Party was already furious with Labour for buying the rail network off Australian-owned Toll Holdings. It will now be doubly annoyed, although not surprised that one of its former leaders has accepted Labour's offer to chair KiwiRail, the new state-owned enterprise which will run the trains and Cook Strait ferries.
When negotiations between the Government and Toll bore fruit two months ago, National was convinced Labour had re-nationalised the railways largely out of political spite.
National believed Labour was deliberately leaving its rival with a nasty bill of hundreds of millions of dollars to fix the railways. National was quite happy with existing subsidy arrangements with Toll, thank you very much.
Labour had other reasons for buying back the network which stretched beyond leaving a fiscal headache for National, however.
These included satisfying its ideological-based desire to bring the "strategic asset" back under state ownership. Labour also wanted to integrate rail more effectively into the Government's land transport strategy for reasons of efficiency and to reduce greenhouse gas emissions.
If National was nobbled in the process - and National is stuck with KiwiRail as its own policy forbids it selling state assets in its first term - that was a bonus.
The politics in Jim Bolger's appointment are more blatant. Already chairing Government-owned New Zealand Post and Kiwibank, the former prime minister is fast becoming Labour's little helper.
In agreeing to chair KiwiRail, Bolger has given his seal of approval to the purchase by virtue of his former position even if it is a decade since he left politics.
His appointment will not stop National criticising the Government buy-back. John Key made that clear yesterday. But it will make it more tricky for National to do so without embarrassing Bolger.
The political value of Bolger's appointment to Labour was quickly demonstrated. His comments about being disappointed successive private owners had failed to inject sufficient capital into the rail network were picked up by Finance Minister Michael Cullen and wielded against National in Parliament.
Yesterday's unveiling of KiwiRail following final settlement with Toll also saw Labour marshalling its arguments more effectively than it did in May when the sale was agreed.
Cullen and the Prime Minister made a more hard-headed case for public ownership to dispel impressions the purchase had been made for reasons of ideology or nostalgia.
They emphasised the very survival of the railways required the buy-back proceed so the necessary major capital investments could be made to bring the network up to standard.
The alternative was to keep subsidising the profits of a foreign-owned company for the next 60 years.
Labour clearly considers the buyback is to its political advantage. If so, that advantage is marginal.
This is not the first time a government has hailed a bright new future for the railways after either wiping massive debts, pouring in taxpayers' money, promising to do so, or, after privatisation, hoping someone else will keep it afloat.
Helped by ballooning oil prices, Labour has weakened National's argument in favour of the status quo. But National can still highlight the hefty $690 million price Labour has paid for KiwiRail and the equally-sizeable capital injection yet to come.
Cullen admits he has paid a premium. Voters will remain sceptical until they see a measurable improvement in rail services. Pushing the patriotism button may not be enough.
