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.
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.