November 2004 saw another cutback to passenger rail services with the announcement that the Northerner, the night service between Auckland and Wellington, would cease operation on that month. Tranz Scenic claimed the service was no longer economic, citing declining passenger numbers as a reason for the closure.

Toll NZ undertook a takeover of Tranz Rail in 2004, and bought back Tranz Scenic from another operator in May. In July the Government reached an agreement with Toll to take ownership of the rail tracks and promised $200m of non-recoverable investment in the rail network, a rail network in a disastrous state of repair after more than ten years of private sector management.

The fact that Toll reviewed the business following its takeover of Tranz Scenic suggests Toll is behind the closure. According to Tranz Scenic passenger manager Ross Hayward, the operator now sees its’ "long-term future lying in high-value tourist operations such as the world-class TranzAlpine service between Christchurch and Greymouth" (Dominion Post, 30/10/04, ‘End of the line for Northerner’).

More cutbacks and closures are likely, as the July 2004 deal between Toll and the Government stated there would be no new scheduled passenger operations for three years. So even if another operator decided they wished to run a service cancelled by Toll, they would be unable to do so. After three years, Toll is only required to run three return passenger services on a line to maintain its monopoly.

With oil prices expected to continue in a skyward direction, it is vital that passenger rail is not reduced to "high-value tourist operations". Wider economic development objectives, as well as social and environmental factors also should be considered before "the end of the line". But consideration of such wider policy objectives will be difficult while the operation of the railways remains in a public-private partnership and private overseas ownership. While taking back the track into public ownership was a step in the right direction, it is clear that the Government did not go far enough. If rail is truly to be saved, it must be returned to full public ownership, trains, trucks, tracks and all.

For a detailed analysis of Toll’s takeover of the former Tranz Rail, see Watchdog 106, August 2004, "Toll: Secret Deals Close To The Witching Hour Revealed", Joe Hendren. It can be read online at http://www.converge.org.nz/watchdog/06/06.htm. Toll has only owned the railways for a few months, and already it is a finalist in the 2004 Roger Award. Thus it is proving to be a worthy successor to its predecessor, the ignominious TranzRail, which won the annual Roger Award three times out of the first six.