The Sunday Star Times reports that Infratil’s network related investments are suffering. In particular increased regulation could affect the value of Wellington International Airport.

However, the same problem is not likely to affect Infratil’s bus investments. Infratil bought Stagecoach’s New Zealand operations for $250 million. At the time, Stagecoach’s Brian Souter said one of the reasons for pulling out of New Zealand was the increasing threat of regulation.

Regional Councils are lobbying the Government to give them greater powers to control bus services. Councils want this so that they can introduce such things as integrated ticketing, which they have largely failed to do in the 15 years since bus services were deregulated.

The likely result of this regulation is that councils will negotiate with bus operators for the provision of services under an “open book” policy. With no incentive to improve efficiency, subsidies will go up. And with no competition, Infratil will do well. However the focus on passengers’ needs - to the extent there is one - may well be lost.

Still all of that seems to be a price that the councils are prepared to pay.