One of the more interesting announcements from the budget in relation to transport wasn’t directly about money but the suggestion of a review of Kiwirail’s structure.

“The Government wants to put the rail network on a longer-term sustainable footing. In the year ahead we will be conducting a wider review of KiwiRail’s operating structure and longer-term capital requirements.

We’ve long argued that change is needed in this area. We currently have the absurd situation where rail improvements, even if they’ll benefit road users, are not allowed to be funded from normal transport funding sources. As a result, Kiwirail has to go cap in hand to the government to beg for funding, competing against all other government funding while roads have dedicated funding. It’s is a strong factor in high value rail projects, like the third main through Auckland, remaining unfunded.

Furthermore, rail projects are not even allowed to be considered as options, even if they might benefit an overall scheme. Again looking at the third main, at the very least it should be being included as part of the crazy east-west link project given the rail line’s role in allowing more freight in and out of the area.

A piece by Newshub sheds some more light on what is being looked at, and it appears quite promising.

Mr Bridges says the review will focus on ensuring KiwiRail is on an even footing when it comes to funding, which is currently separate from the National Land Transport Fund.

“It’s basically about having a long-term, transparent, sustainable model for KiwiRail,” he says. “We want to have a really good look at that and put them on a good even footing.”

That could mean KiwiRail will be allowed to apply for funding from the Ministry of Transport, in the same way other infrastructure programmes and local authorities can.

and

Another option Mr Bridges hinted at was removing the requirement for KiwiRail to be commercially viable and to make a profit, which it is required to do by law.

“One of the issues with KiwiRail is that it’s a state-owned enterprise and by definition, state-owned enterprises are there to make money,” he says.

While the terms of reference are apparently a few weeks away, this does give hope that the review will be meaningful. We’ve suggested before that perhaps the planning and maintenance functions of Kiwirail should be split out and placed under the NZTA, to be managed as a national strategic network just like State Highways are.

This review is definitely something we’ll be keeping an eye on.

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66 comments

  1. Watched terrible coverage of this on 3 news: Kiwi Rail ‘losing’ heaps of money. Right. So how much money do roads make? Roads too ‘lose’ billions every year, if looked at this way. Billions of tax and ratepayer dollars are spent on them, without comparable return. Their value, like rail’s value, is economic not financial. The difference is rail is held to a completely different and much narrower criteria than roading. Road and driving’s costs are socialised and many of its direct benefits privatised, while its value is calculated in economic terms, and often very loosely.

    This is no argument to run either mode in an un-business like fashion, but rather to understand and evaluate both on similar terms; tighten up how weakly road investment is tested, and to separate the operation of KR as a logistics company from the costs of the nation’s rail asset…

    I have great hopes for this review… And lets properly price externalities too. Especially carbon.

    1. “And lets properly price externalities too. Especially carbon.”

      Agreed, but what will happen is this, again another case of socialise the costs, and privatise the profits like we do with roads.

      The road freight guys like Mainfreight will want to be able to get carbon credits for shipping stuff via Rail.

      This will be on top of the lower freight rates they’ll pay because rail CO2 emissions are lower o attract less carbon taxes.

      But those lower carbon tax benefits will accrue to KR not the Mainfreights of this world.

      So they’ll either start their own rail services [on KRs own, but should be “NZTA owned/managed] tracks, and/or they’ll simply demand that KR hand over a large chunk of the carbon offset credits KR “Earns” from its business operations to the Mainfreights of the world.

      Now, I don’t know that having multiple rail operators is a very efficient model, nor is it fair to demand KR hand over those carbon credits it earns to their competitors.

      But under this government this is the crazy model we’ll end up with.

      1. I thought carbon credits only applied to those actually absorbing carbon, such as forest owners. Using less carbon would only expose the user to less tax, this would be applied to KR but passed on in a lower cost offered to its customers such as Mainfreight.

        1. Since the actual form of the governments approach to putting a price on carbon remains to be seen.

          its not clear exactly how any carbon taxes or credits will work. Its up to each government in the Paris and other agreements to decide and implement the reduction in carbon use within their countries borders.

          So who knows how Joyce will twist the carbon system to benefit his trucking industry mates.

          Note: I used Mainfreights name as they are the largest road freight operator, but they have an enlightened approach to road and rail, as compared to other trucking industry operators and also this governments ministers like Joyce, English and Bridges etc. So by calling them out I am not doing other than referring to the NZ trucking industry as a whole.

          1. Was going to say compared to the rest of the trucking industry in NZ, Mainfreight are a ray of sunshine.

          2. I think we all have some level of cynicism towards Joyce. However, that is taking it to another level to suggest that the government is going to give carbon credits to businesses who burn carbon but at a lower rate than other businesses and then order them to give give them to another business.

            I think we will likely end up at some stage with a carbon tax with a number of agricultural exemptions, similar to what the Greens proposed last election.

      2. The carbon emissions in freight come from burning fuel, or generating electricity in the case of electrified rail. So any carbon tax/ credits will be included in the price of fuel and electricity. This is already the case under the Emissions Trading Scheme.

        Downstream users like Mainfreight, Kiwirail etc will report ‘their emissions’ as that’s part of good corporate practise, but they only pay for them indirectly, via the charges bundled into fuel and electricity.

    2. Yes that 3 news video gives totally the wrong impression & message even about why they are doing this review, sound bites all out of context etc.

    3. Agreed – the coverage on 3 news was abysmally ill-informed (mentions of billions spent on “Kiwirail” but no mention of even more billions spent on “Kiwi Roads”, not just from NZTA but all the other parties as well) – but on the positive side, Mr Bridges did not seem to be as ill-informed. Thank goodness – because he is the Minister in charge of all this, after all. He seemed to be quite keen to get funding for railway line spending under the authority of the Land Transport Management System, which I believe this very blog has been asking for for some time. Rail is, after all, completely a method of Land Transport.

      There is partial funding of Highways by road user charges and a huge annual spend on roading. There is some logic therefore in planning for partial funding of Railways by rail user charges – but again, a warning: Britain tried that, and so far it has been one disaster after another. The pinnacle of just how spectacularly it had failed was, for me, the sight of a locomotive that had broken down – and instead of sending out another loco to tow it back to the yards, it was actually cheaper for the company to hire a crane and a large truck, lift it off the rails, and drive it back to the yards. That was a system set to fail – and so it did. So please Mr Bridges: don’t try this at home.

    4. “Watched terrible coverage of this on 3 news: Kiwi Rail ‘losing’ heaps of money.” Lloyd Burr has a bad habit of lazy buffoon reporting. No real thought gone into his interview just a loud noise with no substance.

    5. The benefit gained by rail should be monetised – such as passenger’s time productivity, environment benefits, healthy benefits, nearby property value capture etc…

      Then those gains will be compared to the loss to find a positive BCR.

    6. Regarding huge amounts of money being lost – Rubbish argument without providing context. I hate it when the media does that.

      If they provided a little context, they’d see the annual integrated report from 2016 – $86M operating surplus. Read it here: http://www.kiwirail.co.nz/uploads/Publications/Annual%20Integrated%20Report%202016.pdf

      KR split their money into “above rail” and “below rail”. Above rail includes operating trains and ferries, and managing the commercial property portfolio (cash positive). Below rail includes operating and maintaining tracks, bridges and tunnels (cash negative).

      Moving the below rail costs to the National Land Transport Fund would be good but they need to let the public know _why_ it’s good. KR diverts over 200,000 tonnes of carbon emissions, avoids approximately 80 million litres of diesel consumption by road freight.

      On a separate note, it’s curious that their staff costs have increased by over $2M (2015-2016) when the number of staff employed has dropped by about 400…

      1. The report shows that the salaries and wages element of staff costs decreased but restructuring costs increased by more, which is not really that curious in a time of significant change.

  2. It has only taken nearly nine years but the government is finally undoing the second biggest mistake the previous government made around Kiwirail by separating the infrastructure and operations again.
    There goes one of Winston’s post election bottom lines.

  3. Reform of the arrogantly stupid and separate mechanisms for funding road and rail transportation is long overdue. Not to have honed in on this anomaly, by a government in office for nine years, is a real indictment of their competence or at least the competence of previous Ministers of Transport notably Steven Joyce and Gerry Brownlee.

    I would go so far as to say that the outcome of this review goes to the heart of determining whether voters should entrust National with a further term or whether they should make a change to a more perceptive Government. This is especially important for Auckland if we want to ensure ‘quality of place’ because ‘moar’ and ever-widening motorways will not hack it.

  4. So NZTA own and manage the rail network in a similar way to the highway network, Kiwirail operate their freight and passenger operations as a for profit SOE (without the burden of network maintainence and depreciation on the balance sheet), and we open the door to any other operators who want to compete/complement the Kiwirail offerings.

    What’s not to love?

    1. “and we open the door to any other operators who want to compete/complement the Kiwirail offerings.”

      And remind me again, Nick, how that model is working out for regional councils and their PT users since the forced privatisation of bus operations throughout NZ in the ’90s?

      As I recall we’re still picking up the pieces from that failed experiment now some 20 years on. And we’re still some years away from finally moving past that failed experiment in Auckland.

      Seems to me that that model for rails will most likely only result in any on-rail competitors to KR will simply cherry pick the best/most profitable routes [like PoT to Metroport] and leave KR to deal with the rest of the routes on a loss making basis. Just like their counterparts did with the bus routes in Auckland and elsewhere. That will result in KR further reducing services to stay alive.

      I think for now, its best that we leave KR as the only rail operator *on existing routes* KR operates. to stabilise and then rebuild its finances.

      But where a new operator believes that they can restart a service [like Napier to Gisbourne] or say a Christchurch to Dunedin passenger service, then sure, let them have a go. If it works well and good, if not, well so be it. nothing lost for either KR or the public.

      The only issue with this is how does the track operator [NZTA?] prioritise the various competing services when they compete for the same track space [as a Christchurch-Dunedin passenger service would with the freight]? Need clear rules round that to ensure a level playing field for all before we can even consider going there.

      1. You’re right that you need rules, but I think you’re overstating the risk involved. European rail networks appear to have run a bidding process to manage track access for several years:

        https://www.google.nl/url?sa=t&source=web&rct=j&url=http://abstracts.aetransport.org/paper/download/id/1734&ved=0ahUKEwiEpKydnZnUAhWKK1AKHUJmCqYQFgg4MAk&usg=AFQjCNFT-zXp05Gby_Q1qAhAL_ZabUc93w

        Seems like it should be possible to design a similar system for new zealand?

      2. They already have competition on the biggest part of their business – the Cook Strait ferries, and appear to handle that without any problem.

        TBH I think our freight network is too small, and has such a small pool of customers it would be hard for a competitor to break in. I can’t imagine another operator being able to build up the rolling stock and expertise to take Port of Tauranga or Solid Energy’s custom off Kiwirail.

        1. RE: Cook Strait – Does Bluebridge offer RORO containerised freight or just cars and passengers?

          Also it’s interesting that the Interislander is part of SH1 – I wonder what positive leverage can be brought to bear on the government based upon that…

          1. Bluebridge takes trucks, so it can take containers, although I suspect the Interislander takes the bulk of containers as it has rail capacity and is hooked up to the rail network.

          2. Despite what the Interislander may say, it is no more part of SH1 than Bluebridge is. The road and its associated funding etc bypass both Wellington ferry terminals (bizarrely, neither terminal is served directly by the state highway network) on its way to Wellington Airport (a much less significant freight objective), and starts again at Picton.

      3. “how does the track operator [NZTA?] prioritise the various competing services when they compete for the same track space”

        This is currently possible and happens – KiwiRail isn’t the only rail operator. It shared the track with TranzDev and a bunch of heritage operators. The legislation and operating rules don’t need to change, someone just has to apply for a rail license.

        However, the cost of setting up a separate rail company is significant. A locomotive will set you back US$2m plus development cost and it takes sometime before you can use it (trail runs etc). Also need wagons and the loading/unloading sites and equipment. This is why KiwiRail has struggled, it’s massively asset dependant but been underfunded until recently.

      4. Thats what I’m suggesting Greg, said nothing about forced privatisation. The difference with the bus privatisation era is that we don’t have a policy or mechanism to subsidise non profitable freight routes, whereas we did have a clear policy of subsidising non profitable bus routes. Correct me if I’m wrong but kiwirail doesn’t run anything for a loss, they are a for-profit SOE. Why would they be compelled to start to ‘pick up the pieces’? They don’t pick up any pieces as it is.

        An operator could only ‘cherry pick’ a run off kiwirail if they can operate a route more efficiently that Kiwirail can. Thats probably unlikely, to take on an established encumbent with existing fleet, depot etc and do better. And if they can, why stop them? Why would we want to regulate in less efficiency and higher cost? If PoT can rail their freight to Auckland with another supplier better, why stop them? Should we really care who pays the track access charges? The more likely outcome is operators picking up routes or runs that aren’t already done. We might have mainfreight run their own trains to suit their own logistics needs. Why stop them?

        Track access rules would sit with the NZTA as track owner and regulator. Policy would direct what is prioritised, which is probably (well maybe) better than having the Kiwirail dividend statement direct what is prioritised. Quite frankly if we get into a position where passenger rail and freight are crowding each other out between Christchurch and Dunedin the we have a very good position. In that case NZTA could start auctioning off prime slots at market rate and use the revenue to build new capacity.

        1. Rail is well under capacity in NZ because railway companies are not allowed to use it. Sounds like a bad joke, but it’s true.

          Interstate rail traffic increased three-fold when Australia replaced the monopoly state operator with an open-access network.

          It needs to happen here if we ever want to see real growth in use of the network. KiwiRail’s business model is very restrictive and lacks the flexibility to cater for all lines. High-tonnage, few-customers doesn’t cut it on provincial lines, better suited to locally-managed smaller players.

          Imagine if Telecom still had a monopoly on communications in NZ – we would all be on dial-up and using rotary phones.

          Our trains are still of a size and weight not seen in North America since the 1880’s. It’s that bad. The network needs new blood.

          1. Or new capital rather. I agree with you entirely Geoff. NZ rail is hamstrung by Kiwirail being basically the only one permitted to rail anything, but Kiwirail is hamstrung by a lack of capital and a direction to double down on main routes to drive efficiency without investment.

            Currently the only mechanism for any kind of development is the government handing over a grant.

          2. Anyone can start a rail fright company. But a simply not cost effective with a very low margin. We have an open rail network, there just isn’t the demand because of the high setup and ongoing costs. We need to help KiwiRail, not look for others to take more business off them.

          3. Damian, we do not an open access network. KiwiRail has monopoly rights for freight. No other freight operator can have independent access to the network.

          4. Its not economic for NZ to have a competing railway company, Do you have competing water companies delivering your water or taking away your sewage. Competition comes from roads
            The UK experience is that state owned but foreign firms carry 2 out of 3 train passengers, much the same for freight

  5. Let’s hope it’s a sign that the NZTA and the Government have learnt a valuable lesson about the importance of the rail network from the Kaikoura earthquake, and that it’s not just a stealthy way for the NZTA to shut down competition to their RoNS. Always seemed strange that Bridges kept saying the rail line repairs would be paid from KR’s insurance payout, while the uninsured highway got nearly $1b Government funding.

    I don’t think AT or KR are that keen on the CRL being handed over to KR (as a non-core asset for a freight/tourism company).

    1. CRL is an interesting case. So many pros and cons around asset ownership.

      I wonder what the projected opex is for the tunnel infrastructure – Especially if broken down into two parts, rail infra incl traction and everything else (ventilation, gen power, etc)…

    2. “I don’t think AT or KR are that keen on the CRL being handed over to KR ”

      I thought the wider Auckland rail network was sold to the then ARC about 15 years ago.

      1. The Auckland rail network was bought back before the rest, but I thought that KiwiRail owns what are commonly (but not quite accurately) called the “below rail” assets – the track, signalling etc, tunnels, underbridges, electrification and platforms – and leases the land from NZRC; AT owns the “above rail” assets, eg shelters, platform buildings and footbridges.

        I wouldn’t be at all surprised if in the complexity of things and speed of change that I’d missed a change here – I have a vague recollection that AT owns the land on which the Manukau Branch sits, and who owns the New Lynn tunnel?

        So who does own the various bits of the CRL? Given the situation elsewhere, it’s unlikely that the answer is simple! (For operational purposes KiwiRail is the effective owner, controlling track access and train operations – on at least some CRL drawings it’s shown as the North Island Main Trunk, extending that line beyond Britomart to the North Auckland Line at Mt Eden.)

        And I’m pretty sure that KR sees the provision of railway infrastructure, whether for urban passenger or long-distance freight, as a core activity.

  6. Yes, hopefully this is good news.

    Had to roll my eyes at Bill English’s blase’ statement on the news last night. Not so much what he said, just more about how he said it.

  7. Hoping that this is a proper, honest and fair review. Based on the outcome of better transport for NZ, not necessarily making the company profitable. Rail in NZ is a different beast to those overseas (scale is very different) but it plays a vital role (and should play larger).

  8. I hope this review results in a very substantial swing of monies into rail infrastructure and away from roading as a means of reducing or at least containing the number of big trucks on NZ’s highways.
    This a necessary outcome if we are serious about reducing the number of road deaths and should be component part of the proposed review.

  9. Once road pricing is implemented the whole rationale for cross subsidisation of rail evaporates. Given we are about to do the former, why bother trying to do the latter?

    1. We might be about to do the former in Auckland (however, I suspect it is still a number of years away), but I haven’t heard any serious suggestion it is going to be a nationwide thing.

      1. Once it is set up in Auckland and the decongestion benefits are demonstrated it will be the first solution to getting rid of congestion elsewhere.

        1. The vast majority of the country (geographically) doesn’t have to deal with congestion. I feel we are a long way from having demand based pricing on our intercity highways, which is where the benefits of most of what Kiwirail do would be felt.

          1. If we don’t have congestion, we don’t have a congestion externality that warrants rail cross subsidisation to alleviate.

          2. Nope but we do have other externalities such as safety to motorists, greenhouse gas emissions, transport resilience and the fact that as those long distance trucks near our cities, they DO encounter congestion, and cause congestion.

          3. Yes. GHG externalities can (should) be addressed through the ETS, any other meddling is likely to be super inneficient. As for safety, while I agree it could be a reason to invest in rail, safety really should be addressed by making roads safer.

          4. Matthew W: surely by safety w should be considering transport safety rather than just road safety? Statistics show that travelling by public transport is about ten times safer than travelling in a private vehicle, so where public transport is available encouraging mode shift is likely to be much more effective that just narrowly addressing road safety.

            If you’re about to travel in a car, the single most effective thing that you can do to improve your safety is to catch a bus/train/ferry instead.

          5. GHG externalities can (should) be addressed through the ETS….but they aren’t.

            A number of libertarian thinking business leaders including senior BP managers, Elon Musk, Bill Gates and others; think there needs to be a carbon tax. That tax needs to be at a minimum of US$40 per tonne to generate the necessary change in the investment environment. The current NZ ETS price per tonne is NZ$16.77 which is better than its been for a long time and should hopefully continue to climb. But nowhere near US$40 per tonnes, and still far too volatile for businesses to have sufficient confidence to invest in green tech without some sort of “offset” by governments to cover for the subsidies the oil industry receives globally.

          6. Congestion charging is about a lot more than subsidising rail. Even if there is no congestion to alleviate we will still need to charge users for the costs of building and maintaining these roads.

            Any attempts to take demand based charging outside of Auckland, Wellington and Christchurch will be very difficult for this reason.

  10. I worked for Tranz Rail, back in the day (1996-2005, at which point I moved to the UK) and before that I was a budgets officer for Transit New Zealand as-was (from 1989, when it was set up). This is not a new discussion. At all.

    * In 1990 the old Railway SOE was bailed out to the tune of $NZ1.5bn or so, in order to prepare it for privatisation. A major reason for privatisation was to shift the risk onto the private sector, because rail was seen as a “money pit” in the way the roads were not, and are not (because of the structure of road user charges and the road levy on petrol).

    * In 2003, the privatised Tranz Rail came within a fortnight of going broke. The Government response was to buy back the track, but they did not then commit to subsidising the system. Eventually this proved unsustainable as well. A paper I presented in 2010 has more detail, as I saw things, up to that stage:
    https://abstracts.aetransport.org/paper/download/id/3490

    With an eye to what has happened in the UK, separation of track and operation hasn’t worked that well, not least because of the subsidy demands and the quirks of the Network Rail governance arrangements. But there is a more fundamental issue: there is just not enough demand in the New Zealand freight task for the sort of work that rail does well, and nor is the market nearly strong enough to pay the charges for rail freight which would be sufficient to cover its costs. The Tranz Rail management of the time did realise that, but too late. And don’t forget that at one point, they were managing the second-largest trucking company in the country, via owner-drivers.

    Also, the only way to reduce the costs of the railway system is to reduce the extent of the network, given that network maintenance costs are more or less fixed. But we don’t want to go there … at all.

    What do we do, then? There does need to be a change in the rules to make it easier to use road user-generated funds for rail capital projects, because of the externality benefits (congestion, perhaps safety). But this doesn’t require a split of the network and operations, and combining the network with NZTA – something I would heartily recommend against.

    1. Can you elaborate a bit on your last para? And perhaps explain why we shouldn’t combine KR&NZTA? It seems to me that the”‘externiality benefits” are very significant and shouldn’t be subject to mere cost-benefit analysis. I realise I’m flying in the face of ‘economic realities’ but it’s just another example of why we’re never going to deal properly with global warming until we stop worrying about the cost and recognize that TINA (Thatcher’s ghost will struggle with this!)

      1. Several factors as to why NZTA and KR infrastructure should not be combined:

        * Managing a road network and managing a rail network are two very different processes.

        * A rail network needs to be managed around close co-operation with the operations running on it, in a way which is not the case with a road network. Ergo, keep the infrastructure and the ops together. The British experience has borne this out in spades. Also, open access for rail operations is easier said than done.

        * What does need to be combined is the central planning, or more accurately the money, so that NZTA takes much more cognisance of rail options. In Scotland, its Transport Agency provides a combined way of looking at transport strategy generally, and this shapes how the money is directed into the rail network (separately organised), the road network (directly controlled), and rail operations. You can find out more at http://www.transport.gov.scot .

        Thanks for your interest!

        1. Further to the above. The original Transit New Zealand was set up in 1989 with a view to being able to combine this sort of planning for road and rail investments – one of the ideas at the time was funding a light-rail system for Auckland. However, the whole concept died a death within six months of its establishment, for several reasons:

          * There was a huge budget cut in 1990, across the board.

          * The specific public transport component of the budget was cut by 40 percent in 1991, and it took years to get the money restored

          * When a serious effort was made to evaluate rail investments against the criteria used for road projects, it was discovered that in pure road cost-benefit terms, very few rail projects created enough *road* benefits to make them viable, and those rail projects which were viable could fund themselves from the additional revenue they would create. The whole logic of the benefit-cost analysis process, as it had developed to that stage, was that road user funds would only be spent on work which created benefits for road users – as distinct from the wider community. And even if community benefits were included (they weren’t at the time; I’m not sure what the rules are now), it would not have done anything to increase the quantum of funds going into the road fund in the first place, so no-one would have been that further ahead.

          As I observed above, this is not really a new discussion.

        2. ‘* What does need to be combined is the central planning, or more accurately the money, so that NZTA takes much more cognisance of rail options. In Scotland, its Transport Agency provides a combined way of looking at transport strategy generally, and this shapes how the money is directed into the rail network (separately organised), the road network (directly controlled), and rail operations. You can find out more at http://www.transport.gov.scot .’

          That’s the way forward.

          BTW on that Scottish site I found this ordinary piece of wisdom. Imagine NZTA saying this!

          ‘There are two lanes in each direction for general traffic on the Queensferry Crossing – it is replacing, not increasing, the road provision for general traffic. The Scottish Government’s emphasis is on public transport instead of allowing unconstrained growth in vehicle traffic.’

        3. Ross, you say that British experience had demonstrated “in spades” that infrastructure and ops should be kept to together.

          Britain uses precisely the opposite approach, rigorously separating those functions, and has the fastest-growing (in passenger terms) and safest railway in Europe. How could that be seen to demonstrate that what they’re doing is wrong?

          1. The growth in demand is in spite of the structures, not because of them. Also, there has been a big shift in the last few years towards operator and network “alliances”, as in Scotland (which is the situation I know the best).

          2. The evidence that the unprecendented increase in demand is despite something as fundamental and all pervasive as the structure, Ross? And what about the unprecendented levels of safety?

            As for alliances, the largest and I think the most formal one, with South West Trains, lasted barely a couple of years. Much talk, little action!

  11. Can not understand why ports don’t own their own trains and wagons and tax payer looks after the tracks.
    And you still have a governing body that looks after the train traffic nation wide.
    Be no difference to trucking companies.

    1. I suspect they see contracting a specialist rail operator in as a better business model than trying to be a rail operator as well as a port operator. The ports don’t generally operate trucking companies.

      Also not all rail freight goes to and from a port, and even for freight that does the freight is often being carried for a non-port customer, such as Solid Energy or Fonterra.

  12. Where does solid energy and fonterra finish products go to ports to get loadedon boats to go over seas.
    Also export places like fonterra get containers ship to them to load on trains…

  13. The problem with NZ’s rail network is that it is under utilized and that Kiwirail is being the infrastructure and a passenger/freight rail operator at the same time plus it is expected to make a profit. The other problem that rail is facing, that NZ’s population is small compared to the land mass.

    Firstly, the track infrastructure, signalling and train control needs to be separated from rail operations and the current national rail network operates as a separate entity and fund by central government or comes under NZTA. It appears that Sweden and Finland have merged their state road and rail networks into one state owned entities for each country.

    Secondly, Kiwirail becomes a rail operator like AT and GWRC and is operated on a commercial basis. Kiwirail as an operator can be government owned or a joint government/private partnership or sold as a non-government business.

    By separating out infrastructure from rail operations, then the track, signalling and train control can be opened to other interested parties who are interested in operating freight and/or passenger rail services through track access fees. This would be similar to Airways Corporation model.

    By the doing this will allow the re-instatement of the Napier to Gisborne line with the Gisborne Regional Council and Ports of Napier wants to do as public/private operation, the establishing regional passenger services like Christchurch/Dunedin, Wellington/Hasting/Napier, etc especially if NZ’s doubles over the next 10 to 20 years.

    What NZ needs is a government that think outside the square and can do long term planning with rail and road infrastructure development that takes into account global climate change.

  14. Rail is simply the most efficient way to move x kg y metres (except for sea freight).
    As such, it should be funded.

  15. My concern about NZTA taking over responsibility for the railway network is that NZTA sees itself primarily as a roading agency, harking back to its roots as the National Roads Board. Its staff are ingrained with a culture of roading and I fear they would show little enthusiasm for prioritising rail. A precedent for this was the “Alternatives to Roading” provison which was set up for Transit New Zealand in the 1980’s to fund rail solutions where shown to be beneficial, but proactivity to actually apply it was woefully lacking.

    Today, NZTA is up to its eyeballs in a culture of big-ticket motorway-construction and so for rail to benefit from a merger would require a very firm directive from government as to positive rail-outcomes. I struggle to see such a directive coming from the present government, despite the recent noises being made by Simon Bridges.

    The best hope for rail is a change of government to one less-idealogically opposed to its development and less-obsessed with pouring the bulk of the nation’s transport-resources into high-cost motorways of dubious economic-efficiency.

    I suggest that for now we disregard this late-in-the-piece gesture from Simon Bridges and concentrate on supporting parties with less-toxic priorities than the present crowd. Don’t be fooled into believing that the leopard has changed its spots just in time for the election.

    If National wins again, then that is another matter.

    1. I think that summarises how many would view NZTA and see no benefit for Rail if they were in control. Although Simon Bridges statement on KR may appear to be a positive thing the more pessimistic (real) view is that such a review may be used negatively to further reduce, not invest in, or even close sections of the rail network in favour of further expanding the motorway network.
      I have no trust in this govt concerning transport policy, their blatant anti-rail views and attitudes are obvious from previous comments they have made

    2. Simon Bridges and Bill English may well be more positively inclined towards rail than a number of others in that cabinet and may very well be the difference between rail surviving post 2014 election.

      However, the biggest problem is not the politicians but the predominant narrative that reaches their ears preached by a tranche of high level (highly paid job secure) career beauracrats working for MOT/NZTA/Treasury. Conversion of KiwiRail’s network to truck roads for platoons of driverless trucks is a classic ideologically pure piece of engineering garbage that emanated from this group. While these beauracrats have such influence, I cannot see any re-organization making any difference.

      Of far greater importance is the ability of the Don Braids of this world to cut through the B.S – real transport people with real knowledge and real success behind them.

  16. Rather than listening to the (informed) views of our transport blog site the government may be being forced to realise the commercial importance of rail by the likes of Mainfreight. An excellent interview of Don Braid by Mark Sainsbury a few nights ago where Don discussed the difficulties the loss of the rail line along the coast to Christchurch is causing for his business. He’s having to redirect with shipping and more trucking and can’t wait to get the rail line back. He’s not hopeful of the current review and said any transport strategy that doesn’t include rail will not work. The government may be feeling some pressure over this. (Has over 50,000 customers having their products shipped via rail).

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