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NZ Finance Minister Michael Cullen announced this morning that agreement has been reached between Toll Holdings and the Government for the rail and ferry business to return to public ownership.
From 30 June 2008 New Zealand will once again have a state owned rail system. The Government will pay Toll Holdings NZ$665m for the operating rail and ferry assets. The track returned to public ownership about 4 years ago, and is owned now by a Government entity called Ontrack. There has been ongoing tension between Toll and the Government over this period regarding access charges. Toll has been paying about $48m a year, and Ontrack was looking for $58m. Another source of friction between the parties was the non investment by the private owners - when the rail system was sold, the new owners agreed to invest in new motive power and rolling stock - we are all still waiting, although the rebuild programmes initiated under public ownership continued under company hands, no new locomotives and very little new rolling stock has been fothcoming. The purchase has been welcomed by all the minor parties in the NZ parliament, but the main opposition party - National - stated earlier that if the present Government purchased back the rail business, it would sell it again.
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