The New Zealand government announced in Monday that it aims to buy back the nation’s rail services from Toll Holdings Ltd. for NZ 665 million dollars (520 million dollars), also allowing upgrades to go ahead.

The agreement regarding the purchase came after the government and the Australian Toll were unable to agree on a deal for Toll’s access to the state- owned rail track network.

New Zealand government officials said that the rail services are in need of new investment and that this would also help the country in its attempt to develop its climate change strategy. In the context of the rising awareness regarding the global warming, New Zealand is one of the many countries that are focusing on the rail system in order to lower emissions.

In addition, Finance Minister Michael Cullen said in an e-mail statement for Bloomberg News that the government will avoid paying other firms to maintain the rail network in the future. Cullen said that the buy back of the business, which was privatized in 1993, would be the best alternative that would lead to new investment in the sector.

Unfortunately, since the rail network was privatized in the early 1990s, it started slowly to decay, as Toll failed to maintain it without government support, due to increasing fuel prices and other factors.

Toll representatives declared that the company would have preferred to keep the business, but issues regarding track access kept it from rushing into making investments.

Around 2.300 people work for the company, running the rail freight and the passenger services.