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The government has officially taken back control of national rail and ferry services from Toll Holdings, naming Jim Bolger as chairman of the KiwiRail network.
The new look KiwiRail was unveiled by the prime minister after
negotiations with previous owners Toll went right down to the wire
late Monday night.
The total cost has still not been confirmed but seems likely to be
more than $1 billion.
Finance Minister Michael Cullen says it has become clear the rail network cannot be run without substantial government subsidies and he does not want taxpayer money going to a private operator.
"New Zealand's rail network is now back in New Zealand hands," Cullen said. "We will now be able to make the investments necessary to develop a world-class, 21st century rail system for New Zealanders.
A board has been established to manage the services of KiwiRail while final shape of the relationship between KiwiRail and ONTRACK is established.
Former prime minister Jim Bolger has been confirmed as chairman of the board, a role he filled with KiwiBank when it was launched.
"We are very lucky to have Jim Bolger's wisdom and experience in this process. He has been fundamental to the success of Kiwi Bank and has provided strong leadership as Chair of New Zealand Post," says Cullen.
The other board members are Brian Corban, Mark Franklin, Ross Wilson, Brian Jackson, Linda Constable and Ross Martin.
A Rail Development Group will report to the Ministers of Finance and State Owned Enterprises in early August with recommendations for the structure and management of KiwiRail and ONTRACK.
Cullen says a number of options exist for the organisation. They range from a single SOE with ONTRACK and KiwiRail as separate divisions within that organisation through to a Crown Entity and SOE.
The government is planning to spend a record $2.7 billion on transport over the next financial year.
Transport Minister Annette King says the programme includes $791 million for the construction of state highways.
Other costs will include road policing, passenger transport
services and local government transport planning.
The programme also provides $18 million for walking and
cycling.
