Advanced Corporate Management: New Zealand Railways Research Assignment

The purpose of this paper was to examine the New Zealand railway governance structures and to analyse the strengths and weaknesses of the new approach to rail system management. The paper begins by reviewing the literature on regulation, ownership, structure and governance of railway systems. The research showed that while changes to these aspects of railways governance have lead to short term efficiency gains, few of the approaches that have been used have lead to long term, sustainable rail industries without active management. The study moved on to discuss the market data, ownership and regulation in the New Zealand context and found that the rail system has had a tough time competing in a deregulated transport industry. Based on the financial data, market valuation and poor state of the railways assets; the government’s argument that it had to buy rail or let it die seems justifiable. The study moved on to analyse the new structures, strategies and legislation and found that there are significant concerns regarding the centralisation of planning and control. Specifically, issues include agency problems, information asymmetries, monitoring costs and the difficult task of measuring against the large number of social objectives that the rail system must now deliver on. The paper concluded that a vertically integrated, government owned rail system is probably the best outcome that twenty years of New Zealand style privatisation could have lead to. However, the pitfalls of centralised planning, legislative lag and co-ordination between public and private in a logistics chain need thoughtful management.

http://docs.google.com/Doc?id=df9bf7w7_330cqvc83c5