Government Buys Back the Rail - Bout Bloody Time

This is a little delayed as I was distracted with the goings on in Blenheim over the last week so did not have regular internet access.
The news that the Government had bought back the railways was welcomed with a sense of irony considering the railways were orginally sold off, albiet by National, in an environment created by the radical Labour reforms of the 1980's. It's a wierd world we live in when Roger Douglas reappears on the political landscape. Is it even wierder when we buy back a national asset for $665 million?

Below is a CAFCA's response to the (re) purchasing of the Railways

But Says $2 Would Have Been Fair Price

The Campaign Against Foreign Control of Aotearoa (CAFCA) congratulates the Government for renationalising the railways from Toll. This restores to public ownership a vital part of the national infrastructure that should never have been sold in the first place.

But we think that the $665 million price paid is scandalously high. It is double what the woeful Wisconsin Central and its local collaborators paid to buy the whole lot (including the track network) from the National government in 1993. It is two thirds higher than what this Government could have bought the whole lot back for, in 2003, except that Labour got cold feet and let Toll buy the trains and ferries, while the Government simply renationalised the track network. Now the whole railways has been belatedly, and very expensively, repossessed from its foreign owners - who no longer want it and who couldn’t make a go of it, because that would mean spending money, rather than simply asset stripping and profit skimming.

CAFCA notes that the Government paid $1 to buy back the entire track network in 2003. Allowing a very generous 100% for inflation, we say that the Government should pay Toll $2 to buy back the trains and ferries. Why should the New Zealand taxpayers fork out hundreds of millions of dollars for something that should never have been taken from us in the first place? Rather than lining the pockets of an Australian transnational corporation, that $665 million would do a lot more good alleviating the poverty in which more than 180,000 New Zealand kids have to live, to give just one example.

We’ve regularly said that the bipartisan sell off policy pursued by both Labour and National governments has turned New Zealand into the $2 Shop of the South Pacific. Therefore, we can’t think of a more appropriate price than $2 to pay to buy back one of the key parts of the national infrastructure. We’re even prepared to put up the money.

And the Government once again stands accused of inconsistency in its policy towards foreign control of New Zealand. Just last week Dr Cullen said that it won’t intervene to stop the sale of Vector’s Wellington retail lines network to a Hong Kong transnational because it had already been in foreign ownership twice before. Hello – so why has it, a week later, bought back the railways from its second lot of (hopeless) foreign owners? Electricity is a sector that is crying out for direction and planning, in the national interest. The pending sale of Contact Energy, to yet another foreign owner, as a byproduct of the takeover of its Australian parent, is a further illustration of how this most strategic of infrastructure assets has become the plaything of transnational corporations. All this while the long suffering public is being warned, yet again, of the possibility of blackouts this winter because of the unplanned, profit-driven structure of the electricity sector.

The Government has correctly blocked foreign ownership of Auckland Airport and renationalised the railways from foreign ownership, but it must keep up the good work and act decisively to restore the electricity industry to being one which operates in the national interest.

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