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New Zealand Railways Corporation, trading as ONTRACK
Rere Totika
Company typeState-owned enterprise
IndustryRail transport in New Zealand
Founded1982
Headquarters
Wellington
,
New Zealand
Area served
New Zealand
Key people
Cam Moore (Chair)
William Peet (Chief Executive)
ServicesRail network ownership, maintenance and construction.
RevenueNZ$155 million (2007)
Number of employees
780 (2007)
Websitehttp://www.ontrack.govt.nz

ONTRACK (Rere Totika in Māori) is the trading name of the New Zealand Railways Corporation (NZRC), the State-owned enterprise that manages and maintains most of New Zealand's rail infrastructure on behalf of the Crown. The trading name was introduced in 2004 after the government repurchased the previously privatised railway infrastructure.[1] It does not operate revenue rolling stock.

Areas of operation

ONTRACK has three main areas of operation:

  • It is responsible for the maintenance and operation of all of New Zealand's main-line rail infrastructure (see List of New Zealand railway lines). Via its subsidiary ONTRACK Infrastructure Limited, it provides rail operators, primarily KiwiRail, with access to the rail network in return for the payment of track access charges. It is also responsible for the maintenance and development of the network.
  • It is the rail network controller, providing services such as train control and signalling.
  • It administers a substantial portfolio of land on behalf of the Crown, and derives income from leasing land and buildings on a commercial basis.

The ONTRACK network consists of:

  • Route length: 3,898 km
  • Tunnels: 149
  • Bridges: 2,178
  • Electrification: 95 km at 1.5 kV DC (Wellington area), 411 km at 25 kV 50 Hz AC (NIMT central section)

History

1981 - 1990: National rail operator

File:Flyingtomato.jpg
Two DF class locomotives in New Zealand Railways Corporation "Flying Tomato" livery. Note the NZRC logo underneath the cab window.

Like the New Zealand Railways Department that preceded it, it had a responsible Minister, the Minister of Railways. The ministerial office was dissolved in 1993.

NZRC was created as a statutory corporation by the New Zealand Railways Corporation Act 1981 from the New Zealand Railways Department. Along with rail operations, NZRC inherited New Zealand Railways Road Services bus, truck and parcels services and SeaRail inter-island ferries.

During the 1980s NZRC faced many tough business challenges, such as the deregulation of the land transport industry in 1982 resulting from the repeal of the Transport Licensing Act 1931 and the resulting growth of competition from road freight operators. NZRC continued to report heavy losses. In 1984 international consultants Booz Allen Hamilton reported to the National government on how a viable rail network could be created. The report recommended, amongst other things:

  • The reduction of staff numbers;
  • Re-orienting freight services towards bulk commodities;
  • Increasing the length and overall weight of freight services;
  • Rationalisation of the locomotive and wagon fleet;
  • Rationalisation of the railway workshops; and
  • Re-focusing long-distance passenger services towards tourists.

This prompted the Opposition Labour Party to launch a "Save Rail" campaign. Despite this, rationalisation of NZRC began with the election of the Fourth Labour government in July 1984. Staff cuts were drastic, infrastructure was reduced and older classes of locomotives were scrapped, and several workshops - Addington (Christchurch), East Town (Wanganui) and Otahuhu, (Auckland) were closed. In 1985 NZRC began a major corporate restructuring program, transforming the old functionally-based branch structure into three core business groups:

  • Railfreight (later Railfreight Systems ), combining rail and road freight and including all rail engineering functions;
  • the Passenger Business Group consisting of New Zealand Railways Road Services passenger and parcels operations, later branded Cityline for suburban rail and bus services, InterCity for rail and bus long-distance services, and Speedlink for rail and road parcels; and
  • SeaRail, the rail and road ferry service between the North and South Islands.

As a result of the land transport reforms, the NZRC was performing poorly, with revenues halved by the new competition.[2] During the mid-1980s the NZRC was extensively rationalised. By 1989 large operating losses and interest generated a debt of $1.2 billion that could not be sustained.[2][3]

1990 - 1991: Break up and asset sales

New Zealand Rail Limited (NZRL) was established as a Crown Transferee Company under the provisions of the New Zealand Railways Corporation Restructuring Act 1990, and took over NZRC's rail transport and shipping activities including the rail tracks on 28 October 1990, leasing the rail land corridor from NZRC for $1 per year. Branding initially remained unchanged, except that suburban passenger services were rebranded CityRail.

NZRL was sold for $400 million to a consortium of Wisconsin Central Railway (40%), Berkshire Partners (20%) and Fay, Richwhite & Company (40%) in 1993. The company was renamed Tranz Rail in 1995, with urban passenger services rebranded Tranz Metro, long-distance passenger Tranz Scenic, and freight Tranz Link. Tranz Rail was purchased by Toll Holdings in 2004 and renamed Toll NZ.

Non-core assets remained with NZRC prior to their disposal. Many of these assets were written down by the Government, for some $830 million. Speedlink Parcels was sold to New Zealand Post, and InterCity road services were sold in 1991 to Intercity Group New Zealand Limited [1], a group of four of the country's largest private coach companies - Ritchies Coachlines, Tranzit, PTL Route Services and Nelson SBL. Railway stations in Auckland, Rotorua, Christchurch, Dunedin, Napier and Oamaru were sold, along with substantial tracts of land previously used for rail operations. Cityline bus services were sold to various purchasers.

1990 - 2004: Manager of the rail corridor

Ownership of the rail corridor underneath the tracks remained with NZRC, which managed the lease of the corridor to NZRL (Tranz Rail from 1995) until 2004, when the Crown re-acquired the rail track infrastructure from Toll Holdings. A separate deal transferred ownership of the Auckland metropolitan rail network from Tranz Rail to the Crown in 2001.

2004: Manager of the rail network

From 1 July 2004 NZRC assumed the Crown's responsibilities under the rail access agreement with Toll (repurchase of the rail network), and adopted the trading name ONTRACK.[1] Recently ONTRACK began a major $600 million upgrade of Auckland's suburban railway network (See Project DART), and will also upgrade parts of Wellington's suburban network. These upgrades, along with other projects around the country, followed years of under-investment in the rail infrastructure.[1]

Track access negotiations

ONTRACK and Toll NZ have been in dispute about track access fees since mid 2006 and an independent arbitrator, Bill Wilson QC, has been called in to resolve the issues.

Separate talks have continued between Toll and the Government on long term access arrangements. On 31 January 2007 Toll stated that [4] "...the discussions with the Crown on a long term sustainable access regime have generally been positive", but "Toll NZ is still concerned that the Crown appears to be unwilling to recognise the inequality of the funding support between road and rail and the need to adopt a more commercial approach to track access management".

Renationalisation

In December 2007, rumours began circulating that the government intended to buy Toll Rail back. However, Minister of Finance Michael Cullen would not confirm these rumours.[5] The buyback was eventually confirmed with a government announcement in May 2008 that the rail operation had been purchased from Toll NZ for $NZ665 million.[6]

The New Zealand Government received ownership of the remaining rail assets from Toll on 1 July 2008. So far, the government has planned to rebrand TollRail system as 'KiwiRail', and plans to spend an estimated NZ$25 million develop a modern effective rail system for New Zealand [7].

KiwiRail will be headed by former New Zealand Prime Minister Jim Bolger[7]. The implications this could have for ONTRACK include combining it with KiwiRail so that it forms a separate division within a shared SOE, or keeping it as a separate crown entity and SOE.

See also

Preceded by New Zealand rail owner and operator
1981-1991 		Succeeded by
Preceded by New Zealand rail infrastructure owner and maintainer
2004- 		Succeeded by
Incumbent

References

  1. ^ a b c Ontrack - a key player in rail renaissance - industrial safety news, Volume 3, Issue 1, Summer 2008, Page 22
  2. ^ a b Evans, Lewis (1996). "Economic reform in New Zealand 1984-95: The pursuit of efficiency" (PDF). Journal of Economic Literature. 34 (4). Nashville: 1856–1902. {{cite journal}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
  3. ^ "The Privatisation of New Zealand Rail" (PDF). New Zealand Institute for the Study of Competition and Regulation Inc. 1999-07-10. Retrieved 2008-07-04. {{cite journal}}: Cite journal requires |journal= (help)
  4. ^ "Xtra Business - Toll track access". 31 January 2007.
  5. ^ John Drinnan (5 December 2007). "Cullen plays it cool on railways rethink". New Zealand Herald. Retrieved 2007-12-06.
  6. ^ "Rail buy back marks new sustainable transport era". New Zealand Government. 5 May 2008. Retrieved 2008-13-05. {{cite web}}: Check date values in: |accessdate= (help)
  7. ^ a b Bolger to head Govt's 'KiwiRail' service (+video) - 01 Jul 2008 - Politics: New Zealand Political News, Analysis and Comment including 2008 election coverage - NZ Herald
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