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IN the past couple of weeks, the New Zealand Government has decided to relax the 40-mile limit — the mileage beyond which hauliers are not allowed, without permission, to compete with rail. From October the limit becomes 93 1/2 miles.
The Government was advised to relax the limit in 1973.
The Wilbur Smith report said that, in the long term, carrier licensing should be free of capacity control. The idea was to let true costs decide for customers what mode of transport they use. The report expected savings of $24m as 25 per cent of rail tonnage switched to road.
The report was put in the deep freeze by the Labour Government in 1973, but the National Party backed user choice on the lines of the report in the 1975 election campaign. The argument has been continuing this year.
Treasury officials are said to see the railways as an expensive monopoly making it more costly to send freight from North to South Island than from America; the railways deny they have a monopoly and talk of the public interest in keeping open the less used rail routes.