The New Zealand government today has announced that they will not provide financial assistance to the Overlander train service between Auckland and Wellington, which is set to stop service on September 30, if no assistance is forthcoming. ONTRACK will retain the North Island main trunk line, while looking for tourism operators to start a tourist rail service.
Trevor Mallard, acting Finance Minister, said: "In making this decision... Cabinet recognised that there was no prospect of the current Overlander service becoming commercially viable. It was not a fuel-efficient operation and at an average passenger rate of 50 passengers each way per day, it was used by relatively few people."
It is cheaper and faster to travel either by bus or plane rather than the 12-hour train journey. "The fares already overlap with airfares, and the reality is that the service is just not well-used. It can not compete with low-priced air travel and coaches. Cabinet considered the regional implications of ceasing the Overlander service and accepted that the current bus services run by the InterCity Group met the needs of those communities," Mallard said.
There has been numerous petitions from the public and from the Green Party of New Zealand to continue the Overlander train service, including one petition signed by 16,000 people presented at the Parliament Buildings on September 14, 2006. "While there have been a number of propositions about retaining the Overlander service, all of the propositions would require government funding in one form or another," said Mallard.
Mallard said that the government will only support rail services if it significantly benefitted the community.
The Government estimates that financial assistance to the Overlander train service would cost NZ$1.75 million a year.
"Finally, the government does recognise and value the importance of a viable and efficient rail network in New Zealand's transport infrastructure. This was a critical factor in the government's decision to buy the rail network back from Tranz Rail. The government has also committed $200 million to upgrade the national rail network between 2004/05 and 2007/08. A further $600 million has been provided to upgrade the Auckland rail network between 2005/06 and 2009/10." 
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New Zealand government denies financial assistance for Overlander