OECD lambasts KiwiRail purchase, shipping red tape
April 23rd, 2009
The OECD’s report on NZ is highly critical of the previous Govt’s decision to buy back the unprofitable rail and ferry operations now known as KiwiRail from Aust’s Toll Holdings. The railway it says “is expected to be a loss-making venture for the foreseeable future.” Transport Minister Steven Joyce agrees but says the railway now has to be put on an economic basis. “Freight rail will be expected to make a return and passenger subsidies will have to come into line with those given to other commuter services such as bus lines.” The Govt may provide additional funding for Auckland’s electrified commuter rail network over and above what is currently planned.
Changes to governance of Auckland may not be enough alone to bring about reform of Ports of Auckland, even though its owner. Auckland Regional Holdings answers to a regional council which will be abolished in the restructuring. Joyce says consolidation of ports will be driven by the arrival of larger ships. “If bigger vessels are going to call and exporters decide there’s a real advantage in size then that will force a rethink of ports of call and more (ports) emerging on a feeder basis.”
The OECD highlights local govt ownership of ports as an impediment to efficient trade, with political objectives taking precedent over maximising returns on assets. It urges privatisation of port assets to impose market discipline on their operations. The OECD also proposes NZ cuts back on red tape for goods crossing wharves, suggesting documentation could be halved, reducing customs clearance times and turnaround on containers. It cites Denmark, France and Finland as nations with streamlined systems, with online manifests, and in Denmark’s case just three main trade documents – bill of lading, commercial invoice and customs declaration.
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