2000 - Today

Return to Public Ownership

In the early 2000s, Tranz Rail's growing financial problems led to talks between the Government and the company to find a means of maintaining a viable national rail service.

In 2002 Tranz Rail sold the Auckland network to the Crown. The following year, the two parties discussed a wider solution that would have involved the Government taking a stake in Tranz Rail. Before any decision was made, Toll Holdings offered to buy Tranz Rail on the basis that it could operate the company at existing levels without Government support.

In 2003 the Government and Toll Holdings reached agreement on the purchase and for the Government to buy back for $1, and operate, the network infrastructure. This was vested in the New Zealand Railways Corporation, the body which had held the Crown's interest in the railway land since New Zealand Rail Ltd was created in 1990. ONTRACK became the entity's trading name.

On 1 July 2008 the Government purchased Toll New Zealand's rail and ferry businesses, which were renamed KiwiRail. From 1 October 2008 the New Zealand Railways Corporation became the single entity responsible for both rail and ferry services and rail infrastructure.

National Rail Access Agreement

The agreement between Toll Holdings and the Government was enshrined in the National Rail Access Agreement (NRAA). Apart from the Crown repurchasing the rail network, it involved the Crown investing $200 million ($100 million for renewal work and $100 million for upgrades). For its part, Toll undertook to invest $100 million to upgrade rolling stock and locomotives.Toll was granted 66 years' exclusive use of the network, subject to "use it or lose it" provisions.

Track Access Charges

The NRAA provided for Toll to pay Track Access Charges (TAC) to ONTRACK that met:

  • the reasonable cash expenses that an efficient access provider would be expected to incur in the operation and maintenance of the rail network
  • a return on capital and depreciation in respect of capital expenditure - excluding the $200 million funding injection from the Crown and any funding that does not provide Toll a commercial benefit.

ONTRACK was required to prepare a forecast for the expected cash expenses to enable a TAC to be set. Toll prepared its own forecast. If agreement couldn't be reached the NRAA provided for the appointment of an independent third party to review the forecasts and prepare an independent forecast. The final forecast was the midpoint between the independent auditor's determination and the position of the party whose draft forecast was closest to the independent auditor's.

Transparency between rail operations and infrastructure will continue under the integrated New Zealand Railways Corporation.

On the Auckland metro network, ONTRACK had an agreement with the Auckland Regional Transport Authority to meet the cost of providing access to the network.