The train set gets another $750 million

Steven Joyce has announced:

The Government’s commitment to invest $250 million to support the KiwiRail Turnaround Plan will help increase New Zealand’s economic productivity and put us on the path to faster growth, Transport Minister Steven Joyce says.

The Budget 2010 appropriation is the first round of Government support for the objectives of the $4.6 billion Turnaround Plan.

The Government has committed in principle to a total package of $750 million over the next three years, with final decisions on funding subject to individual business cases.

“The KiwiRail Turnaround Plan is designed to see the rail freight business become sustainable within a decade by getting it to a point where it funds its costs solely from customer revenue,” says Mr Joyce.

“In fact, the lion’s share of the $4.6 billion will come from the business itself.

The Government really has little choice. One can’t sell Dr Cullen’s train set. No one would buy it.

The Greens complain not enough is spent on public transport such as trains. I guess they’ll call for even more than $750 million.

It will be interesting to see if KiwiRail can move towards break even. This subsidy should be regarded as full and final. If they can’t break even within a decade, then the for sale sign should go up.