New Zealand eyes rail buyback

The New Zealand government is leaving open an option to buy back the national rail network from Tranz Rail Holdings. Such a move is one of six options New Zealand is studying, according to a spokeswoman for the country's finance minister. The government's ruling Labour Party said before a recent election that Tranz Rail's decision to halt service on less profitable lines would force too much freight onto highways and negatively impact industries, like forest products suppliers. Tranz Rail, privatized by the former National government in 1993, operates on 2,339 miles of track. But the company has warned that money-losing lines may have to shut down. Earlier this year, New Zealand bought the Auckland region's rail lines for NZ$81 million ($38 million) in partnership with local government. It also stepped in to save national airline Air New Zealand, injecting NZ$885 million for an 82% stake following the collapse of Australian subsidiary Ansett Air.--Greg Johnson www.TheDeal.com