Yesterday the Treasury released documents related to the government’s budget announced a few months ago. One that has gained a lot of attention is the suggestion from Treasury that the rail network – with exception of Auckland and Wellington – be shut down. The paper can be found here and contains quite a bit of information – although a lot of the actual details such as how much funding Kiwirail want in the future are not shown.

NZ Rail Network
The current New Zealand rail network

The paper discusses how Kiwirail have undertook a nine month study into its operations last year and the key findings were

  • rail’s high fixed costs are spread across the network and do not materially vary with changes in volumes being transported
  • revenue earned from train movements on most parts of the network is interdependent with other parts of the network because most freight movements travel across multiple network segments, and
  • as a result of the high fixed costs and interdependence of revenue between the different network segments, it is challenging to reduce costs as fast or to the same extent as a reduction in revenue.

In other words this isn’t just a case where you can trim off a few dead limbs and carry on but that those limbs all combine to contribute to the overall network. For example trains carrying milk powder from Taranaki also use and contribute towards the busy Hamilton to Tauranga section on their way to the port. Just like has happened in the past here and overseas in places like the UK, cutting back the network can do more harm than good. As such it was recommended that one of two main options be pursued.

  • retain most of the freight network and rationalise unprofitable services and some lines on the fringes of the network, or
  • close most or all of the freight network, with the option of retaining the upper north island section only (Auckland to Hamilton to Tauranga) as this part of the network carries the most freight volumes and covers most of its costs.

Treasury’s preferred option was to close the network and in their argument for doing so they say that over the last 5 years earnings haven’t really changed. They do however note that Kiwirail have been hit by a huge number of external factors which even they suggest the magnitude of and extent of which have been greater than the company could be expected to deal with. These include the Canterbury earthquakes, the Pike river mine explosion, Solid Energy’s financial difficulties, extreme weather events and the Aratere being out of service for a period earlier this year. What’s more the hits keep coming and now it seems the next issue will be looming trouble with the dairy industry.

One aspect the paper does highlight is that Kiwirail are really running a shoestring operation. As part of Treasury looking for ways to reduce funding they note that there is no evidence of “gold-plating” infrastructure or inflating funding requirements. They also highlight the results of an independent assessment by AECOM who say that in comparison to Australian systems, planned spending on infrastructure per kilometre was low. They also couldn’t find opportunities to reduce what was planned without significantly impacting levels of service. This doesn’t surprise me as I frequently get the impression the company is running only on fumes after being institutionally and politically beaten up.

The report claims that shutting the rail network down

During 2014, the Treasury, the Ministry of Transport and NZTA undertook an assessment of the economic and policy considerations for continuing to fund KiwiRail at the levels required. The key findings from this work were:

  • if all the freight currently transported on rail was transferred to road, the additional road user charges (RUC) earned by NZTA from the additional trucks on the road would be sufficient to adequately address road capacity and safety issues (resulting from the additional trucks) in most areas
  • the estimated environmental and safety benefits from transporting the current volume of freight by rail of ~$10 million and ~$20 million per annum respectively do not outweigh the costs of continuing to fund rail, and
  • a national cost benefit analysis estimated the net social cost of continuing to fund rail at the levels sought in this paper at between $55 million and $170 million per annum, which takes into consideration all the costs and benefits associated with funding rail at the levels required (another interpretation is that there is a shortfall in benefits of between $55 million and $170 million per annum at the current levels of funding).

I find it interesting the claim that shifting all rail freight to truck would pay for itself and any capacity and safety upgrades. According to the MoT there are currently around 900 freight trains around the network each week which probably equates to more than 3,000 trucks worth of goods being moved each day. The trucking lobby will be rubbing their hands with glee.

Treasury wanted the government to only provide one more year of funding during which public study would be carried out before what they assume would be a closure of the network. They do say that if the government didn’t agree to that, that they should provide Kiwirail more certainty by way of a three year funding package – something the Ministry of Transport supported. Thankfully the government didn’t agree with Treasury and agreed to keep funding Kiwirail – although only on a two year package.

I personally have no issue with Treasury looking at the issue of whether we should fund something, that is after all a key part of their job. What I do have an issue with is that there doesn’t appear to be a consistency in advice. Where’s the questioning of the RoNS businesses cases – some of which are as low as 0.2, where’s the questioning about why we’re pouring so much money in to new roads when people are travelling less and the assessment of many projects showing major flaws. Then there’s the absurd notion that the rail network should be a profitable business while ignoring the road network elephant in the room. For example the NLTP announced last week shows around $3 billion of funding from outside road taxes to build and operate the network.

NLTP 2015-18 revenue and investment flows

In my view Kiwirail should stop being treated like a business and instead the government should stop the madness of the NZTA not being able to fund rail improvements. That would allow rail projects that meet certain requirements e.g. improve safety and/or capacity to compete on a more even playing field. The NZTA should also be required to consider and allowed to build rail projects as part of any other improvements they make to get the best transport network outcome regardless of mode. They are after all the transport agency, not just the road building agency.

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  1. Treasury should have looked at switching investment from road to rail and the effects that would have. For example, the Hamilton section of the Waikato Expressway will cost $44.6m per kilometre, or about twice as much as a brand new high speed railway. That 22km of RoNS would fund 4 or 5 years of railway deficit ($973m). If the Treasury is serious about saving money, that’s where it should be looking.

  2. Surely it’s a no-brainer for ownership of the rail network to transfer to NZTA as a key part of the country’s transport infrastructure?

    1. The problem is that key managers within NZTA and MOT may be part of the problem, not the solution. Martin Matthews, CEO and Secretary of MOT, was just last week was floating the idea that the KiwiRail network could be turned into a series of trucking roads carrying ‘platoons of driver-less trucks’. And here is the disconnect: given that KiwiRail is being run as a shoe-string operation, how is it that if that corridor is a railway it is loss-making, yet, if you turn it into a trucking road, it is now profitable. Both modes are capital intensive and need a lot of high quality investment to be an attractive option to customers.

      The cost structures are not that different – clearly, the big difference is the way the costs are presented. Senior managers and officials at Treasury, NZTA and the MOT appear to have no interest in accurately comparing the figures between roads/trucks and rail corridors/trains on a “like for like” basis. Why the aversion to finding out the truth?

      1. I think someones been reading “Twentieth Century Inventions – George Sutherlands – 1901”

        “The existing keen motor-car rivalry presents one of the most interesting and instructive mechanical problems which are left still unsolved”

        “when fairly smooth tracks adapted for automobile and cycling traffic have been laid down all over the country, a very interesting question will crop up having reference to the practicability of converting these tracks into highways combining the capabilities both of roads and of railways.”

        “The asphalt track and its equivalent will be the means of bringing much nearer to fulfilment the dream of having “a railway to every man’s door”. Many such tracks will be equipped with electric cables as well as guiding-rails,”

  3. Agree that treasury should be comparing the amount sunk into road funding and how that effectively subsidises the trucking industry.
    We have quite a minimal rail network as it is and we should be using it to its maximum potential! Upgrade Papakura to Frankton and Tauranga to electric lines and the gap from Palmy to the Wellington network so that trains don’t have to change over twice. Get new electric locos fix up slow sections of the track and you’ll get times down to truck times and much more efficiently. Not too mention getting trucks that damage the roads off the road

  4. I am fairly appalled at the short-sightedness of Treasury’s advice, but this takes the cake. Obviously, in their world, cheap diesel lasts forever. And somehow, freight still gets across the Cook Straight, as they don’t seem to make a case for the ships to stay.

  5. OK, fair enough. If every part of our infrastructure has to make a profit, let’s close it down.

    By the same token we should also close down all those unprofitable roads around the regions. Starting with most the roads in Bill English’s electorate.

    Many of the new Roads of National’s Stupidity will be unprofitable from day one so they’ll need to be closed right after they’re opened. That will have the added benefit of delivering extra work for the construction businesses unbuilding what they just built.

    While we’re at it, we could slash power prices by ripping out all those unprofitable rural overhead distribution lines. Or charge them their full costs.. that would give a kick start to solar / storage.

    Probably we could do the same with a decent chunk of the fixed telephone network.. everyone has mobile now anyway. And quite possibly we need to stop delivering mail to most of the country for less than about $10 a letter.

    With all the money saved we could build apartments in Auckland to house all the internal migrants who suddenly found the regions rather more rugged than they they were used to.

  6. About the claim that transferring freight to roads would be covered by extra RUC paying for road upgrades, note the qualifier at the end of the sentence “in most areas”. Does that mean that it would be at a cost in say 30% of areas.

    The report also states that a national cost benefit analysis of rail has been undertaken. Has anyone seen this? Does it include any assessment of the costs and benefits of rail to reducing carbon emissions?

  7. The stupid thing is by mothballing current track that they’ve done, they’re encouraging less freight companies to use them (as they need trucks on some routes, so why not use trucks on more).

    Is the Kiwirail review OIA’able? It would be intriguing to see how they only get 10-20million of social/environmental benefits, given electric trains on mainline vs diesel trucks. Low price of carbon (now currently increasing significantly as cheap overseas credits are no longer available)? Massively underestimating wider safety benefits I would think.

    1. Yes I doubt that 20 million covers the full cost of safety issues arising from all the trucks suddenly filling up roads: more traffic; more slow trucks that impatient motorists will try to pass sometimes dangerously. more tired truck drivers being forced to work longer and more shifts to meet the demand. It will be awhile before road upgrades will improve safety on many roads. There are a lot of narrow winding roads that aren’t really suitable for trucks, especially not big trucks. Sending most to all freight by truck is going to encourage the use of bigger trucks.

      1. Agreed Nigel; it appears that they surely haven’t considered this. MoT states that: “In recent years deaths from crashes involving trucks have made up around 15 to 19 percent of the total road toll, while only about 6 percent of the total distance travelled on NZ roads is travelled by trucks” :

        I think it’s inarguable that our roads will be safer with any measurable decrease in road freight volume.

        1. So if we were to take the opposite view, that cutting all trucks from using the road (and thereby mandate a move to rail), then we should see a further 15 to 19% reduction in the road toll – ie saving about 57 people from death each year out of a 300 avg road toll. With each life saved worth about $2million, that’s a saving of $100m per year. Hmmm…. spend that money on the railway I say!

  8. As long as private vehicle fuel taxes and road user charges subsidise the trucking industry, the sums will always look like this. If transporting freight by road had to pay it’s full direct costs, let alone safety and environmental externalities, rail would look much more attractive and given the fixed costs are similar regardless of volumes then the price per unit would come down considerably. Why is it that the gov are falling over themselves to front load road funding, but rail has to run on a shoestring. Would be nice to see mode agnostic investment decisions being made. Agree that if NZTA were responsible for both the road and rail networks and required to optimise spending to achieve freight and people movements rather than car and truck movements things would look way different. Not sure just making the current NZTA take on rail would work though – is the thinking mature enough. If all you know is a steamroller, everything looks like a potential new road.

  9. Looking at the chart you have there, road user charges generate $4,292m, road mainteance costs will be $4,831m (to which it’s generally considered trucks do the most road damage), and road improvements $5,553. That looks like some fairly serious subsidisation to the trucking industry to me. Particularly compared to the paltry $200-300m p.a. shortfall for kiwirail.

    That Treasury paper looks to be something requested by Bill English, maybe to back up their political position.

    Anyone got data on the Interislander’s results? It’s nice to be integrated but if there’s a loss, does kiwirail need to operate ferries? Could this be given to someone else to do?

    1. There already is an alternative to InterIslander – called BlueBridge. Completely private, not subsidised by Government. I think the point to note is that (although not clearly stated as such) they’re not proposing to stop the InterIslander (although no doubt Treasury would like it to be privatised), but they would be looking to stop the carriage of trains on the InterIslander. That’s sort of happening already, as the new ship can’t take trains, but will just take trucks and trailers. Most of the freight going across the Strait now is carried by containers based on truck trailers, and it is shunted on and off the ferries by those little grunty tractor units.

    2. Heavy vehicles definitely are the ones that damage the roads. Road pavements have to be designed for the heaviest truck loadings (which have regularly been raised), and as I recall from my Highway Engineering course, dynamic forces are a cubic function, so doubling the loading increases the impact eight times.

      It’s fair to say that if it weren’t for heavy trucks on our roads, our roads would be much cheaper to build and maintain, as cars have very little deteriorating impact.

      1. Indeed. So increasing truck weights from 40 to 50 tonnes roughly doubles the damage they do to the road. This on top of safety issues. Plenty of hidden subsidies..

  10. Those subsidies for road will increase without rail. Perhaps that is why they were running around to be “saviours”?

  11. What no one seems to be doing is calculating how much money will be needed to import the extra diesel required to fuel the extra trucks on the road. Most trucks only average out at about 1 mile per gallon (in old terms), so that is a whole lot extra diesel that has to be imported, all requiring overseas funds. The last time I looked fuel imports were swallowing up about one third of our overseas earnings, so increase the fuel imports for the extra trucks and you could be looking at increasing that to anything up to 50 percent. We would make the Greek economy look pretty good. Add to that the money needed for the extra trucks – you don’t get much change out of half a million dollars per truck and trailer unit – and you would be looking at a petty expensive exercise just in those two areas. Sure, trucks can probably carry most of the goods going by rail at present – but what will be the real cost of doing so, who is going to pay, and what will be the political fallout for the government that implements it. Because let’s face it, New Zealanders are a nation of motorists, and one thing that gets them riled is having to share the roads with trucks that are getting bigger at the same time as their cars are getting smaller.

  12. If the NZTA is to take over the rail network, because it is all about us having an integrated transport ìnfrastructure, then it had better take the ports out of the hands of local councils as well.

    1. Of course, if integrated really meant integrated, and inter-modal really meant inter-modal.

      The roads are cut in the Central Plateau (and between Napier and Gisborne). Do Treasury still think “There Is No Alternative”?

  13. Once the freight system is closed the costs of keeping rail fall onto the few passenger services left and then they will close as well. What happens when the world wants coking coal again? Are we really going to run hundreds of coal trucks to south island ports?

  14. The rail lines aren’t making a decent profit? How about the cost of the roads is passed onto the trucking companies which use them and see how profitable they remain? The government seems more than happy to pour billions into roads on the claim that, while they themselves make no money, they generate revenue through businesses using them growing. So why is rail treated differently? Why the drip-feed of cash in expecting a quick buck in return?
    Where are the efficiency gains coming from of moving to all-trucking? Adding thousands of extra trucks, requiring thousands more tyres and gallons of fuel, putting more load on the roads requiring even more maintenance and expansion to cover the extra traffic, increased travel time with the extra slow traffic? Reducing all transport to single-mode which could all collapse in case of a critical failure?
    There needs to be more emphasis on rail and non-road transport. Instead of facing a continuously hovering the axe, Kiwirail should be encouraged to actively seek business and not bear the burden of paying for the rail, to put them on equal standing with the truckees. And rather than drip-feeding, there should be substantial investment in overhauling the network; get everything to the same standard, cut the oldest and least reliable in the fleet and get an efficient operation running. Drip-feeding cannot allow for the overhaul required. Non-road modes of transport have been abused too long in NZ, and the cost is coming to bite. It needs to be fixed now, or the future cost will be much higher, either trying to repair the damage or living without it entirely

  15. This is crazy.

    Look at the truck freight industry, aka the most heavily subsidised industry in NZ.

    This is a theoretical example and may not bear an exact resemblance to reality. If a heavy vehicle travels between Wellington and Auckland every weekday, that’s 170,000km and $66,500 in RUC on top of any diesel costs. If it is a 20 tonne vehicle it exerts 160k units of force on the road. A 40 tonne vehicle exerts 2500k units of force on the road. Double the weight but 16 times the force exerted. You can roughly equate this to the damage done to the road such that it requires ongoing repair. You would pay the same RUC for both trucks even though one vehicle does 16 times the damages. Make sense to any business to use fewer, heavier trucks because they are being subsidised by other trucks.

    My 1 tonne car exerts 1 unit of force on the road. This is almost negligible.
    A 2.5 tonne SUV would exert 39 units of force on the road.
    Both of these vehicles may use diesel and pay RUC. At the same distance travelled (170,000km), both vehicles would have to pay $10,540 in RUC.

    A cyclist exerts virtually no force at all, so they shouldn’t have to pay RUC in any shape or form.
    My 1 tonne car exerts 1 unit of force on the road at any one time and I would pay $62 in RUC for 1000km of travel.
    A 40 tonne truck exerts 2.5 million units of force on the road at any one time and they would pay $391 in RUC for 1000km of travel.

    They do 2.5 million times the damage to the road (not really, but still ridiculous levels) but they only pay 6.3 times the RUC.

    Can you tell who is subsidising the freighting industry by paying to repair all the roads they damage? Me. I shouldn’t have to be subsidising private companies like Mainfreight.

    If rail were subsidised like road freight, the railways would be flush with cash. If the road freight industry were treated like rail and had to pay all their costs, all the trucking companies would be bankrupt.

  16. And what about the costs of closing it down? That freight will end up on the roads, meaning more road improvements needed, safety issues, etc.
    I also wonder about the future..20 to 50 years from now, when maglev becomes viabile. Rail has a potential speed/capacity triple that of roads.

  17. It looks like David Heatley from the group calling themselves the “New Zealand Institute for the Study of Competition and Regulation (ISCR)” has got a job at Treasury. The news from Treasury sounds to ring from the one eyed report he did against our rail system in 2009.

    The question you need to ask, who funded the ISCR to make that completely dodgy report? Just sounds like the truck lobby up to its usual tricks.

  18. I listened to the Treasury Secretary, Makhlouf speaking a while ago and it was like listening to government policy, word for word on the need to increase the housing supply, education, immigration. I know they provide advice to the government but Treasury seems to be this government’s think tank. Unfortunately all of these policies have been adapted which gives concern for rails’ future. English and Makhlouf both recently went on a trip to China together. That may well be normal practise.

    There’s no independence there. I just hope we can get through the next two years without too much damage so we can get rid of both of them.

    1. I wonder if they looked at any of China’s recently-opened high speed passenger railways, high speed freight railways, and heavy freight railways? Much more being built as well. I wonder if they told the Chinese not to bother, they’re wasting their money, just close them down?

  19. British Rail went through a similar exercise in the 1980’s with the “Serpell Report”. Happily that got binned and the following 30 years have shown rail to be hugely in demand, in spite of Serpell recommending that much of it be closed down. Absolutely unthinkable today!

    Now in Britain rail expenditure is right up there with road, though a perverse outcome of privatisation in the 1990’s is that the railways have become far more expensive to run than they used to be or need to be.

    With the privatisation millstone remove from NZ’s railways, they ought to be poised for a similar comeback, just as soon as the deliberate policy of starving them to death can be likewise binned.

    Vote the present government OUT and all sorts of things might change for the better.

  20. I don’t understand the logic of trucks. How is it fundamentally different to sea freight where ships have been getting bigger and bigger because while they move slower individually it ends up being faster as there are that many more containers per ship. Surely the same is true of trains? That is, why doesn’t that logic apply? And you have the greater advantage of being able to travel without clogging things up..

    Having NZTA be in charge of the roads and rail sounds logical too.

    And wouldn’t it be neat if we had a bullet train Wellington to Auckland via Palmerston North and Hamilton? Even if it were two trips a day… And if we did get rid a lot of the freight it wouldn’t even compete for track space (although due to different variations on electrification I guess new tracks would probably be needed anyway).

  21. I’m very pleased about this. Now we can demand the same hard-arsed calculations are applied to road freight. It may of course have to by someone other than the current Treasury, who clearly suffer from the groupthink that starts with the assumption that anything on steel wheels is always without value, while everything on rubber is somehow as saintly as motherhood and apple pie, and almost entirely without cost nor negative externality.

    When is a subsidy not a subsidy? When it’s from private vehicle users and ratepayers to big trucking. Very curious.

    Assumptions, assumption, it’s always in the assumptions.

  22. The high level concern here is that Treasury is playing the role of extreme radical libertarianism in order to help position gov policy as ‘moderate’. Look say the gov as they dismember the rail network: ‘we’re saving it’.

    1. Very perceptive. I hope for the sake of the biosphere that it doesn’t come to that.

      How on earth are we going to meet our recently-announced emissions commitments by scrapping our railway network (or de-electrifying it)?

  23. This rabid neo-liberal mantra does not work for everything. Not in health, nor education, nor public transport, and more.
    In the past couple of days the only way to Auckland was via New Plymouth by road from Wellington, which I had to endure, but I’m guessing rail was still operating. There is a reason that rail was used to open up this country by pioneers and keep it connected. Roads will never be able to maintain these connections as well in a mountainous weather-vulnerable country like NZ. Multiple modes are essential. The playing field needs to be altered to not disadvantage rail vs trucks.

  24. The Treasury is clearly out of touch will reality, and revealing their true colours. It really does explain a lot that is presently going on, or not. A better Public Service is required which is informed, independent, and in the service of the long term interests of the public of New Zealand, and not the subsidised trucking industry.

  25. I’d be a bit suspicious about whether the additional RUCs collected covered everyones costs or just NZTAs share of the additional costs. Would the ratepayers end up having to find more money to fund the local share of extra wear and tear on the non-highway parts of the road network? Is that what they mean by “in most areas”?

    1. Good point. (Maybe all the councils and their ports should get together to have a stake in the railway network, as they will certainly see the value of it in terms of reduced maintenance costs and throughput capacity, as well as connectivity resilience, etc.)

  26. The rail has never recovered from being stripped by Fay and Richwhite, and daily beatings from the trucking lobby. The tracks are stuffed and senior management is about the same. They spent millions on a track maintenance software package when they already had one. It was too sophisticated for management to understand so something more “basic” was bought. Backup facilities are a wreck. At one one workshop electrical circuit boards are kept in the store that does not leak. Rail does not stand a chance.

  27. KiwiRail effectively consists of (at least) two quite different businesses – a railway infrastructure company and a freight company. The road analogy would be a trucking company also having to maintain and upgrade the state highway network.

    In order to protect the railway network I would like to see the infrastructure side of the business (which is actually not a business at all) transferred to the NZTA (as a Crown entity). This would make it much less vulnerable to being closed down and would allow the remaining KiwiRail (as an SoE) to focus on moving freight without having to also maintain the railway network. The NZTA has significantly more organisational capacity than KiwiRail and is generally a much better network asset manager. Bringing control and management of the highways and railways networks together under a single agency would also help to reduce the extremely unhelpful ‘road vs. rail’ arguments. This was contemplated in 2008 when the ‘above track’ assets were acquired but at the time it was felt that the NZTA was still a very new organisation and giving them responsibility of the railway network might be beyond the capabilities of such a young organisation. Crucially, as a Crown entity, they are not expected to return a profit and operate as a business like an SoE is.

    In time it may be possible / appropriate to introduce private competition into the rail freight industry (although admittedly this hasn’t worked well previously in NZ due to a range of factors but I think it could be made to work if the right conditions were provided).

    1. Yes I agree with this. One problem we face the badly executed experience of this in the UK. And we have a lot of people from the UK at all levels of what used to be called the civil service. It isn’t hard to find many convincing arguments for why many consider it to have been a mistake to separate track and operations there. However there are many differences between the two countries, the assets, and the use. Surely we could study and avoid the worst aspects of the UK system. After all this is exactly how the roads are run. The truckers don’t plan, build, maintain, or own the roads, they just use and destroy them for a low fee.

  28. If anyone remembers Rails magazine and Bob Stott the editor advocating for a level playing field between the trucking and rail industry, this has been going on for years. It’s a shame the Ontrak Toll thing didn’t work as this was a good model similar to what is in place in Australia now.

  29. A few salient points:

    1. The ratepayers pick up a substantial portion of the tab for trucking infrastructure. When the so-called HPMVs were introduced local authorites came under considerable pressure to allow these heavier vehicles on selected local roads with the requirement that bridges were modified and increased pavement wear paid for. When questioned on these costs the minister of transport at the time, Steven Joyce, stated that ratepayers would be the beneficiaries of the increased productivity (and by implication, should pay for it). Funny man. At the Pukekohe A&P show a couple of years back there was an Auckland Council booth were locals were invited to write their concerns on a whiteboard. I raised the issue of heavy HPMV traffic on Glenbrook Road and asked why AC agreed to designating it as an HPMV route. The nice man from AC asked me if I knew how much in rates NZ Steel paid (with the implication that money buys influence).

    2. Until recently truck drivers were on the list of immigrants as there was (it seems) a shortage of them. Seems like a good way for the government to assist in keeping the wage costs of the trucking companies down.

    3. With high fixed costs and relatively low marginal costs for additional volume what freight rail in NZ needs is right now is greater market share, not additional fixed costs such as further electrification. This greater market share is best captured by lower pricing (vis a vis road) or better service or some combination of the two. Rail is around 4 times as energy efficient than road for transporting freight. Each tonne transferred from road to rail is thus much more effective in reducing energy demand and emissions than a tonne transferred from diesel-hauled rail to electric hauled rail. In order for rail to transition to sustainable energy sources it first needs to survive.

    4. Trucking does not have the same safety rigour applied to it as rail. Why, for example, are speed governers not mandatory on trucks?

    My view is that the best approach is to substantially increase RUCs (with more of those RUCs going to local councils) to cover the actual costs imposed by trucking combined with the imposition of more rigorous safety measures.

    1. The critical issue seems to be RUCs. Looking at the fundamental physics, it would be interesting to see to what extent the charges reflect for example, the axle load difference between a 44 tonne truck and a 52 tonne truck. Likewise the difference between the family/farm diesel ute, an electrician’s van, a light local delivery truck and one of the typical inter-city B-trains. If the analysis can be done on the physics versus the charges, we have some irrefutable arguments with which to poke senior NZTA/MOT management with a sharp stick.

      Politically of course it isn’t going to be possible to raise RUCs for inter-city trucks to where they should be, but at least then we the have the hard data to provide the basis of what sort of subsidy the trucking industry is receiving each year.

      Added to the national figures are of course the council costs to upgrade local roads to take heavier trucks.

      On electrification, the NIMT overhead is apparently in good nick and should not require large scale maintenance for many years. The locomotives are structurally OK. At issue is their control systems – this is the tricky and expensive bit. So yeah, if we were starting from scratch, electrification of the main trunk would make little sense, but in this situation there is considerable sunk infrastructure costs that do not require major work. That is why the financial argument to repair/re-build versus removal is a lot tighter than would first appear. Of course, there is also that intangible selling point of electric locomotive powered freight trains using off-peak hydro or wind power as they grind their way up onto the volcanic plateau in the middle of the night.

  30. An interesting issue is whether parts of the rail system could be operated as private or regional government, short lines. Such operations operate much of the old US rail freight systems. The Otago council brought the Wingatui to Middlemarch line with running rates into Dunedin and despite the difficult geography, seems to have maintained it fairly well. The line from Kaikoura to Bluff might be possible for a much lower staffed rail operation, with say max speed of 65km. Other routes might be Port Chalmers to Bluff, Napier to Gisborne.
    Both Fay Richwhite and Toll found economical operation of rail here impossible. In first five years of Fay Richwhite operation they did contrary to myth, invest quite heavily in renewing track, rebuilding the Stratford- Taumaranui line ( A better route to serve the Taranaki dairy industry than the NIMT ?), purchased the Aratere and massively leverage it, maintained passenger services on a National basis till 2001/2 which Ruth Richardson and National probably wouldn’t have done, purchased and refitted the Capital Connection ex Brit rail carriages and the Carriages and railcars used on the Auckland suburban system. The second period of Fay Richwhite operation they invested little and ran the rail at max speed to minimise losses. This was the Rock Island approach and what Beeching recommened in phase two, (1966-71) in which he planned to close down, a furthur half of the rail lines that run today in 2015. Wilson sacked Beeching in response, but it is line with standard accountancy law.

  31. What about running track form New Plymouth to Te Kuiti?
    Would provide more freight movement options for rail.

    I think planning should be done to ‘split’ SH1 into separate North / South 3 lane roads using existing Highways and connecting them to the Waikato Expressway and Wellington’s Northern Corridor.
    The idea being that you have 2 lanes of traffic with one counter.
    e.g. Waiouru to Cambridge via Te Kuiti 2 lanes South / 1 lane North, Waiouru to Cambridge via Taupo 2 lanes North / 1 lane South.
    Waiouru to Levin would be trickier and a major upgrade of the Ohakune – Wanganui route would probably be required along with a 4 lane extension from Otaki / Levin to Bulls.

    Still Auckland to Wellington 2 lanes each way via Hamilton and Palmerston North bypasses would be good for intercity freight and transport.


  32. Surely if anyone had the political will, we could get most of the trucks off the road and get the bulk of freight back on rail. For some short term pain we could end up with better/safer traffic flow on the roads; safe and efficient transport of goods on an improved and efficient rail network and as an extra bonus have our regional towns able to have access to markets. We could even have some industry out and about in the regions!

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