*This is a guest post by Roger Blakeley, Bob Norman, Alex Gray and Keith Flinders.

Dr Roger Blakeley, former Secretary for the Environment; Bob Norman, former Commissioner of Works; Alex Gray, professional civil engineer and Senior Project Manager; Keith Flinders, Electrical Services Consultant


Roger Blakeley, Bob Norman, Alex Gray and Keith Flinders

Leaked documents show that KiwiRail’s decision in December 2016, to replace electric locomotives on the electrified section of the North Island Main Trunk (NIMT) with diesel locomotives, was based on flawed logic and justified by misleading information.

Under the Official Information Act (OIA)1982, we applied in March 2017 to the Minister of Transport for the business case on which the KiwiRail decision was based. In response, we received a heavily redacted version of the Better Business Case dated 21 December 2016. Recently we received a leaked copy of the unredacted version of that business case. It is revealing.

We are releasing this information because the decision will exacerbate climate change. It will result in an extra 12,000 tonnes of carbon dioxide per year being released into the atmosphere – a giant step backwards when New Zealand has committed to reduce its greenhouse gas emissions under the 2015 Paris Climate Change Agreement. The decision does not stand up to scrutiny, now that we have the redacted sections of the business case.

Kiwi Rail Class 30 Electric Locos.

1.The KiwiRail Decision

What was the decision? The KiwiRail better business case states that it considered four options: 1) electronic control system upgrade to the electric fleet, 2) second-hand electric locomotives, 3) new electric locomotives, and 4) replace electric locomotives with diesels. The first two options eliminated were the upgrade of the electric fleet electronic control system ($10m cost) and purchase of second-hand electric locomotives (a fraction of the cost of new electric locomotives). These were the two lowest-cost options. They were rejected because: “they did not meet the business objectives of simplifying the operating model and standardising the asset fleet”. Long-run Net Present Value (NPV) cost cash flow was calculated for the two remaining options. The diesels were assessed to have a lower cost, and the decision was made to replace the electric locomotives with new diesel locomotives.

2. What the Leaked Documents told us

a). Delays due to changing locomotives at Te Rapa and Palmerston North

KiwiRail said that a reason for the switch from electric locomotives to diesels was to “improve reliability and efficiency for KiwiRail’s customers”. Reducing delays caused by switching locomotives from diesel to electric and back again at Te Rapa and Palmerston North was an objective. The scheduled delays are for 40 minutes at each location. The redacted sections of the business case included four trials in July 2016, which found that the delay for each locomotive change was on average 5 minutes, rather than the 40 minutes scheduled. The average 5-minute delay at both Te Rapa and Palmerston North is negated by the faster speed of electric locomotives on the electrified section of the NIMT, which makes up 10 to 20 minutes. Therefore, the decision to switch from electric locomotives to diesels does not save time.

b). Assessment of actions taken to resolve criticisms in the WorleyParsons Report

KiwiRail commissioned WorleyParsons (WP) to conduct a peer review of a late-2015 board paper and cost model. It identified serious flaws in the Board paper. The leaking of their peer review report, and another internal report, was referred to in a TV1 6pm News item on 12 May 2017: “KiwiRail says the reports were written in 2015 – a year before it made a final decision. Chief Executive Peter Reidy says there were three or four reviews.’It matured all the way through, so the initial information that we were looking at at the start looked very different towards the end,’ he said.’It’s not our job to cook the books – we are very comfortable that this is the right decision for our business”

Our analysis shows that many of the flaws identified by WP in their 2015 report on the board paper do not appear to have been corrected in the final better business case. We checked that against the unredacted version. Three examples are:

  • (Example 1) WP said: “The overall performance of the DL project has been, by any rational industry measure, extraordinarily poor. lt is remarkable that additional DL locomotives could be recommended as the solution to a locomotive reliability problem without first recognizing this state of affairs, and secondly, conclusively demonstrating that all problems, current and potentially arising have been identified and satisfactorily managed”.
  • Our Comment: In the redacted sections, KiwiRail acknowledged that performance was not satisfactory in the first batch of diesel locomotives, but said a performance-based contract (with financial penalties) had been applied to all future purchases. Mean Distance Between Failures (MDBF) rates for the DL locomotives are still lower than expected.
  • (Example 2) WP said: “the discount rate for NPV of 8.9% is higher than the NZ Treasury 10-year bond rate of about 3.5% currently (risk free rate, including inflation) (www.rbnz.govt.nz/statistics/tables/b2/)”. WP continued: “It is presumed that this rate includes project risk premium. The basis for the rate used should be stated”. 

Our comment: The effect of a very high discount rate in the NPV calculation is advantageous to the new diesels option (lower capital costs) compared with the new electrics option (lower operating and maintenance costs), because it heavily discounts future costs. The better business case of 21 December 2016 did not state either the rate used or its basis, despite the recommendation by WorleyParsons. Treasury’s recommendation for a NPV calculation for long durations is 6%, not 8.9%.

  • (Example 3) WP said: “It does appear however that the Board paper is biased towards the DL option at a number of levels.

Our comment: Based on our scrutiny of the unredacted business case, the bias still appears to exist in the final better business case.

c) KiwiRail Internal Review of Financial Modelling in 2015

In the December 2016 better business case, the diesel option was calculated to have a NPV cost range of $204m to $236m (lower and upper bounds, compared to the electric option, which had a range of $242m to $310m.

However, a leaked (early 2017) KiwiRail internal review critiqued the financial modelling that informed the Board paper at the end of 2015. It said that the financial modelling under-represented the cost of the diesel option and over-represented the cost of the electric option.  Based on the corrected model, that review assessed the cost of the electric option as $230m cheaper than the diesel option. The final better business case appears to have ignored that internal review.

3. Dual-Mode Locomotive Option

In our opinion piece for The Dominion Post (published 21 March 2017) headed “KiwiRail’s missing option for NI trunk line”, we observed that KiwiRail did not consider the option of dual-mode electric-diesel locomotives – a serious omission. This option would solve the concerns about delays in switching locomotives at Te Rapa and Palmerston North.The benefits of shorter journey times, with a mode share shift from road freight to rail freight, would still have been achieved. The retrograde step of increasing greenhouse gas emissions, by using diesel rather than electric locomotives over the electrified section of NIMT, would be avoided. Although dual-mode electric-diesel locomotives have higher capital costs, they have lower operating and maintenance costs, leading to lower ‘whole of life’ costs.

The Minister of State Owned Enterprises, in response to a written question from Megan Woods, MP (24 May 2017), said: “KiwiRail advises me that it did consider dual-mode locomotives as a possible option to be considered in the business case. However, KiwiRail’s assessment was that dual-mode locomotives would be too heavy and too long for New Zealand’s rail infrastructure and KiwiRail set aside this option quite early in the process as being physically impractical in New Zealand”.

We advised the Minister that developments in the design and manufacture of dual-mode locomotives over the last two years make KiwiRail’s assessment out of date. The Swiss locomotive manufacturer Stadler confirmed in writing (14 June 2017) that recent designs of dual-mode locomotives have an axle weight of 16 tonnes (within the acceptable axle weight limit of 18 tonnes), and they would be suitable on the curves of the NIMT route. We suggested that  KiwiRail review their earlier decision, recognising that these locomotive design developments are in their commercial interests, and because reduction of greenhouse gas emissions is in the national interest.

4. Climate Change Impacts

KiwiRail’s decision will increase New Zealand’s greenhouse gas emissions – despite New Zealand’s commitment to a reduction in greeenhouse gas emissions of 30 per cent below 2005 levels by 2030, under the 2015 Paris Agreement on Climate Change. We do not accept KiwiRail’s argument that the decision is justified because “more reliable and efficient services” will achieve a mode-share shift from road to rail freight. The same reliability, efficiency, reduction in travel time, and corresponding mode-share shift would be achieved by new electric locomotives or dual-mode locomotives travelling between Auckland and Wellington.

In New Zealand, 80% of electricity production is from renewable resources such as hydro or wind power, with a target of 90% renewables by 2025. Consequently,

only a small proportion of electricity supply required for an electric locomotive fleet depends on burnng fossil fuels.

KiwiRail will burn an extra eight million litres of diesel per year using diesel locomotives on the electrified section of the NIMT. While we are being encouraged to shift to electric cars, KiwiRail is reverting to diesel rail.

Professor Ralph Sims of Massey University said “the rail network would generate 12,000 tones of carbon dioxide per year by de-electrifying – more than cancelling out the 9,000 tones saved by using 3000 electric cars”.

5. Towards Full Electrification of the NIMT

The KiwiRail decision involves retaining the electrified infrastructure required for electric trains on the NIMT, and keeping the lines energised, at an estmated cost ot $2m – 3m per year. This funding could be at risk from future budget cuts, which could jeopardise any future opportunity to electrify the whole NIMT.

KiwiRail estimate it would cost more than $1 billion to complete the electrification of the whole NIMT, and more than $4 billion to electrify the entire North Island network. An OIA release shows that these are extremely rough order costs. Our preliminary analysis is that the costs would be much less.  A more rigorous analysis of fully electrifying the NIMT is warranted, to inform future consideration.

In Cabinet papers released under the OIA, Treasury reported that it had raised a number of questions and had asked for additional material from KiwiRail, which had not been provided in time for consideration in their report.

The options of a new electronic control system for the electric fleet, new electric locomotives or dual-mode locomotives would all potentially be part of a transition to a fully electrified NIMT. A first step could be electrification from Papakura to Te Rapa. This would also allow the extension of the EMU commuter service from Auckland to Hamilton.

6. Conclusion

The KiwiRail Board appears to have approved the diesel locomotive option from the 2016 better business case for five key reasons. We challenge each of them here:

  1. Lower overall cost – not accepted by the KiwiRail internal review of November 2015, which said that the total cost of the new electric locomotive option is $230m cheaper than the new diesel option.
  1. Reduced delays at Te Rapa and Palmerston North – the redacted sections of the business case record trials which showed on average a 5-minute delay for locomotive change at each terminal, rather than the 40 minutes scheduled. This is negated by the 10 – 20 minute speed advantage of electric locomotives over the electrified route.
  1. Standardisation of fleet – yet KiwRail already has different diesel locomotives in the South Island. Air New Zealand matches the aircraft to the operational task to optimise their operation, using large, wide-body aircraft such as the Boeing 777 on long-haul flights; narrow-body Airbus A320 on domestic and short-haul international flights; and turbo-props to service regional markets. When using electric locomotives, KiwiRail currently operates a similar business model to Air NZ. The steep topography in the central North Island section of NIMT is covered by powerful electrics and the flatter country is served by the less powerful diesels..
  1. Faster implementation time for DL locos – WorleyParsons’ 2015 peer review points to significantly less time than 4 years for completion of the electric locomotives’ upgrade programme, referring to a KiwiRail document that states 2.5 – 3 years for 17 electric locomotives. For a lesser number of electric locomotives, this period would be substantially reduced.

5.     Greater reliability and efficiency – contradicted by WorleyParsons’ peer review: “The overall performance of the DL project has been, by any rational industry measure, extraordinarily poor”. Although KiwiRail has taken measures with the Chinese manufacturer to improve reliability, the redacted section of the better business case says “Mean Distance Between Failures (MDBF) rates for the DL locomotives are still lower than expected”.

7. Recommendation

We recommend that the KiwiRail Board reconsider its decision to replace electric locomotives with new diesels on the electrified section of NIMT. Upgrade of the electronic control system of the electric fleet would be the most cost-effective solution. If that is not acceptable, we recommend that the Board resolve to purchase new electric locomotives or dual-mode electric-diesel locomotives.

Current status of the Type 30 Electric Locos all ordered in the late 1980s.
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    1. Dual-voltage electric locomotives are the answer! Electrify Papakura to Te Rapa and Palmerston Morth to Waikanae @ 25 Kva overhead and the change of voltage at Waikanae would be covered. The present Class 30 locomotives should be overhauled and retrofitted for both voltages. You would then ha. Ve the “Electric Trunk” long talked about. Total cost about $350 million to &400 million, Cheaper than the unreliable DL diesels. Job done!

  1. This is an absolute shocker. It is obvious our current govt has no idea about transport and this has trickled down to kiwirail. Whoever made this decision needs to be sacked

  2. I believe that the opposition spokesman for transport has given Kiwirail notice that the de-electrification decision will be reversed should he receive a promotion on Saturday

      1. To be accurate, the opposition is the formal term for the largest party not in government and as currently the Labour party are the largest party, the labour transport spokesperson would be the one being referred to.

      2. ‘The opposition’ is the term for all parties who are not part of the govt. The ‘leader of the opposition’ in our archaic system is however from the largest of them.

  3. There is an opportunity for Kiwi Rail and the Ports of Auckland to earn the limitless love and admiration of the people of Auckland by running dual mode or electric locos through our city instead of the carcinogen emitting and deafening diesels.

    Such a move would go a long way to buying all the social licence and political will they would need to get additional track and hugely increase the number and frequency of freighters working the port.

    The wires are there to Papakura, will soon go further, and of course are also still there between Te Rapa and Parmy. The existing diesels can focus Tauranga-Metroport run, Northland etc.

    Both these publicly owned companies could do with some positive PR. Ports of Auckland in particular. What would it take for them to acquire or lease their own electric locos for short shuttle between Ferguson Wharf and their Wiri depot? Say adding a small battery unit for the unwired sections in the yards…

    1. That is the basic issue here. Either Kiwi Rail get get the public on-side with them and prosper or they can piss the public off, in which case Kiwi Rail may as well wither until they are replaced by trucks.

  4. I have the feeling that someone in KiwiRail or the Government is kow towing to the Chinese, resupply of diesel engines. Classic case of ‘my future job is with you not here in NZ’.
    KiwiRail should be more transparent in its operational performance – fancy redacting what they do really well – 5 minute locomotive changeovers.
    Successive Governments have run rail into the ground and this decision confirms that this investment is short term. The Northland rail line is a classic…..not connected yet to Marsden Point and not upgraded to carry shipping containers…..in fact allowed to degrade so passenger rail cannot use the track. An efficient freight service from Marsden Point to Auckland could transport large volumes of fuel (in iso tank containers) whilst the pipeline is out of commision.
    New Zealand requires resilient infrastructure.

    1. Don the Chinese will bid to supply whatever we ask for. The problem is closer to home.

      It’s more that the current government have no strategy other than short term financial gain. Not economic value; not wealth creation, not a healthier, happier, safer, richer nation. Just simple accountancy, basic balance sheet stuff over a very short term. They run the country like a corner diary.

      So they discount the future away, pronounce rail as ‘failed’, don’t invest in it, or count its true benefits, while spending literal billions every year on the alternative system with huge equally uncounted hidden costs.

      Having no strategy means being hostage to distracting events and taking decisions on short term evidence leading in unwanted directions.

      1. How do you know that the problem doesn’t lie with Kiwirails management and the culture of company going back over 100 years. There was one quote posted on Transport Blog a while back that stated “New Zealand Rail difficult to use for 100 years”. Having dealt with previous iterations of Kiwirail in my working life I can absolutely confirm there is a completely illogical almost self destructive mindset. For example what is the best way to ensure that a branch line fails. Answer make sure that there is no lifting gear available to load containers and freight on the line. This was exactly what happened too the Napier Gisborne line. And if that isn’t enough then scrap any spare wagons so they can’t use them on said line. Then wait for a weather event.

    2. For a cash strapped business, clearly they should be choosing the cheapest option and upgrading the electronic control systems of the existing locos. This has the appearance of corruption within KR. I’d expect the SFO to be looking carefully at bank accounts of those involved.

  5. We are so fortunate that this blog – officially derided by the Government now – exists and presents such well-researched thinking. Just wish you hadn’t changed to such a generic name so that I always have to remind myself ‘that’s the one that’s Transportbog’.

    1. +1 Helga, I would like to thank those who have written this report and the individual who leaked the document. There are people in KiwiRail who have the right mindset and we should be clear that it is likely to be some real problems at the top of the organization.

  6. Rather than duel mode electric diesel, duel power electric locos of 25kVA/1500VDC would be a better option and required for operating in Wellington anyway, as it will be too costly to change the Wellington system from 1500VDC to 25kVA.
    Full electrification of the NIMT should be done by extending the 1500VDC from Paraparaumu to Palmerston North allowing for new electric Intercapital Connection

    1. Wallip: A better option is to finish electrifying the NIMT extending the 25 kV it has, as does the Auckland electrified train network, and employ dual voltage locomotives that can also run on the 1500 DC overhead in Wellington. Capacity of the Wellington DC system would need to be increased to cater for both suburban unit and freight traffic operating at the same time. In Europe there are already dual voltage locomotives in service and also trams.
      See https://en.wikipedia.org/wiki/Tram-train

      1. Palmerston North seems a more logical break point for voltage systems than Waikanae, as I don’t think there are any trains running Auckland/Hamilton to Waikanae, whereas there are trains running Wellington to Palmerston North.

        Dual voltage is more expensive than single voltage, so best to limit the number of trains that would have to cross this point.

        1. Most freight, at this time, is Akl – Tga anyway I think. Focus on electrification from Ham – Tga would be of more urgency me thinks.

        2. Also, given that consideration has already been given to expansion of Wellington’s suburban passenger rail network north to Otaki, extension of the electrification north of Waikanae using Wellington’s existing 1.5kV system has the advantage of permitting the operation of Wellington’s existing passenger rail fleet to new northern termini. A Capital Connection-like service could operate using cheaper and simpler straight 1.5kV electric locomotives if required.

        3. Jezza, there are four main substations between Palmy and Hamilton, and two for Auckland’s electrification, one is effectively redundant. I can count 4 subs between Wellington and Petone (12km) and another two between Petone and Waterloo – you need that many because voltage loss is so great, and that’s why 25kV is popular. Sure, the 1500 needed upgrades because new EMUs are powering from stations and have a more intense power requirement, but a similar density would probably be needed all the way to Palmy because a single electric freight loco will be as powerful as 4 Matangi EMUs – the longest allowed because of current draw issues.

        4. So what you are saying is it would be cheaper to buy dual voltage units every 30 years for a PN to Wellington passenger service than put in all these extra sub-stations? If so then I would agree with having the voltage changeover at Waikanae.

        5. Yes, and any EMUs bought to travel beyond Waikanae need to be a more of a long distance vehicle with toilets. For future planning, maybe 1500V to Otaki but 25kV beyond that. If SW carriages are replaced with a multiple unit (electric, hybrid, or diesel) then it’s likely they’ll also run to Palmy

        6. Just out of interest how does the voltage transfer work in practice? I assume there has to be some sort of gap between the lines, so I imagine the dual voltage units must require a bit of battery power to move between them?

        7. Typically an insulated section around 10m long; the locomotove coasts through it. Magnets on the track trigger the switchover

        8. As the length of overhead line over which a DC feeder station can transmit power is nominally 10km, to fully-electrify the line between Waikanae and Palmerston North using Wellington’s system you’d probably need at least 8 new feeder stations. This would, of course, also be affected by geographical constraints, access to mains power, and traffic frequency.

          Any electric rail vehicles operating south of Palmerston North are likely to be either based in the Wellington region, or heading to/from Wellington region destinations. Seems to make sense then that the system south of Palmerston North is compatible with Wellington’s existing network. Extending electrification north of Waikanae is going to be expensive no matter how you do it, what’s a few more feeder stations?

          The original proposal to electrify the whole of the NIMT was to use the 1.5kV DC system but, IIRC, was rejected in part due to cost. If it would have required in the order of ~70 feeder stations, that I could quite understand!

        9. I agree a better place for change of voltage would be Palmerston North, then the “Matangi” units could operate to P.Nth. Replace “Capital Connection” with “Matangi” units (4-car) then 2-3 hourly (2-car) and at night run 4-car Matangi to same evening timetable. A similar service could be run out of Auckland to Hamilton. Have we got anyone with the brains to plan and run such a service?

        10. I suspect Wellington to PN would have a separate fleet than the Matangis, much like the Wairarapa trains that have toilets and more comfortable seating, likely the same for Akl to Hamilton. The EMUs in Auckland and Wellington are really designed for suburban running not intercity.

        11. There is to be an additional substation installed out west as part of the CRL works to add resilience to the system.

    2. “as it will be too costly to change the Wellington system from 1500VDC to 25kVA.”

      Has anyone actually run numbers on that, in terms of costs involved versus benefits that high voltage AC has and benefits from not needing dual voltage locomotives. I know there have been such changeovers elsewhere in the world, so it isn’t beyond the realm of possibilities from a technical viewpoint.

      1. I don’t think it’s out of the realms of possibility Matt, some thoughts are that the matangi control system will probably be the same, but with a 25kV to 1500V transformer and rectifier in between. Most of the work will be finding space in the vehicle, installing it, and making sure the new components don’t cause too much chaos with existing electrical systems. Testing probably in Palmerston North.
        The systems can all be installed but remain off-line until the infrastructure is ready, then over Christmas they all get turned on, and everyone is happy, no dramas.
        But really I’m not sure if there is appetite for 25kV given that dual voltage is so easy going forward, and whether the current subs are inefficient enough to warrant a massive train upgrade that bring few tangible benefits (performance, safety, comfort)

    1. Winston has said he would sack the board of KR, Problem is he has to become King/Queen maker to do this. We need a KR board that are pro rail.

  7. Thank you to the authors. Wow. I have taken the following figures from New Zealand’s Greenhouse Gas Inventory 1990–2015.

    While an extra 12,000 t CO2 per year appears small compared to the CO2 from road transportation (13,282,300 t CO2 per year), the electrification vs diesel debate needs to be viewed in the wider context of the National Party’s lack of strategy to reduce carbon emissions.

    Road transportation contributes 40.9 pc of the Energy sector, which contributes 40.5 pc to the national gross emissions. Under the UN Framework Convention on Climate Change, New Zealand took a target to reduce emissions to 5 percent below 1990 levels by 2020. Instead, between 1990 and 2015, net greenhouse gas emissions increased by (63.6 per cent) to 56,372.5 kt CO 2 -e.

    The National Party’s only significant strategy to reduce CO2 emissions is encouraging conversion of our vehicle fleet to electric. Yet this will be negated by the increase in traffic they are simultaneously inducing with their road building.

    Patrick and mfwic’s comments about getting the public onside are to the point. Rail can be the knight in shining armour on the CO2 front – easily embraced by the public. But who would bother reducing their carbon footprint when decisions like this – and the road building – tower over any small change an individual could make?

  8. In case there is some hidden requirement for KiwiRail to ‘buy Chinese’ (it certainly looks like it!) it should be noted that this does not mean just diesel. For example, the South African class 20 and 22 electric locomotives are Chinese-built – same gauge as us, dual 25 kV AC & 3 kV DC (ideal for closing the electrification gap between Waikanae and Palmerston North, as noted by Wallip.) These locos are versatile, too – used on heavy haulage and the luxury Blue Train. Did KiwiRail bother to discuss new electrics, including maybe dual-mode, with their Chinese suppliers?

  9. The article doesn’t suprise me. To me, Kiwirail board and its senior executives have always been blinked and short sighted in their decisions. Most of the board is appointed by the Government and we now that the current National government is road fixated and rail is a thorn in their side and if they have their way, the national rail network would be scrapped and replaced by trucks for inter-regional and long distance freight.

    It doesn’t take a rocket scientist to figure out, if you already have the expensive infrastructure in place it would be cheaper to upgrade the existing EF fleet with new equipment for either single or dual voltage. The Union has said, that the EF chassis’s are still good shape so from their point of view, upgrading the existing EF fleet would have been the better option.

    Even the Union has said, electrification from Papakura to Hamilton and Palmerston North to Waikanae should happen to provide a complete electrified main line service between Auckland and Wellington for freight and passenger services.

        1. Sorry, your last sentence just made it sound like it was a surprise that even the union supported it, just doesn’t sound like a surprise to me.

  10. I reckon the Board has been given instruction by Joyce. Bridges and Co. to run it into the ground until it can’t be fixed. Unfortunately for them they are finding that Kiwis rather like their railways as opposed to thousands of trucks putting lives in danger!

    1. I was at Auckland Port and a DL Locomotive came in with a train of wagons and I watched it unhook then run around and hook onto another train to take it back to Wuri. I then walked down to the other end of the train. May be 5 minutes at the the most.When I got there the train took off. There is a train end monitor which is hooked to the brake air hose when the pressure comes on the train can go. So five minutes guaranteed.

    2. It’s Not Because Of Union workers. it’s for safety reasons. Like I pointed out with the mission bush derailment and many other operational incidents regarding locomotive set ups.

      Royce unless you know what you are actually talking about with your 5 minute brake test at the Ports of Auckland, you should perhaps not say anything. The reason there is a TEM at the rear of most port shunts of late is for safety reasons as well. Just to hook on and shift the thing would take 5 minutes. What we have been doing recently is hooking on, pulling the rake outside to the shunters hut and doing a brake test there while the rail operator picks up the work order(about 25mins)Also the comparison DOES NOT involve a second locomotive with a change over crew, and communications with TC for route signalling.

      The only thing this report really shows is incompetence (a dysfunctional kiwirail). It ignores many, many other factors. All this post is supporting is a big black hole for tax payer money with a railway that isn’t up to it.



        The fact the NIMT has Auckland at one end, and a reasonable percentage of the traffic on it is going to, from or via Auckland probably has something to do with it…

        1. SJC – Why is Greater Auckland blog having anything to do with the rest of the country? Cos we’re human too! And it used to be called Transport Blog ! And, because it is a good forum to discuss all things transport. And because it is a great forum to discuss things that are affected all over NZ by actions that KiwiRail do… I really appreciate your knowledge and your willingness to contribute SJC – please don’t stop! And please don’t confine your knowledge to just AKL based event…

  11. The usual suspects here with their “yellow peril” nonsense about the heathen Chinese being to blame for this should get lost. As someone else rightly says, China makes electric trains too.

    1. Just like how you have your head in the sand and are a Chinese apologist?
      Quite simply the quality is not as good out of China and the fact that they sent us dodgy locos filled with Asbestos FFS should being a warning light for you.

      1. Sorry, I forgot that the entire nation of China and every ethnically Chinese person living overseas is responsible for one Chinese owned company sending us locomotives that contained asbestos.

        1. …while we build our own schools using asbestos but that somehow doesn’t taint our vision of ourselves.

        2. Heidi – not sure what you mean there? NZ – as far as I know – stopped putting asbestos into products back in the 1980s – about ’86 ? So, yes, there will be asbestos in building materials from pre-86, but afaik none since? Unless you know something I don’t?

        3. Indeed, Guy, not many people are aware of how much asbestos has been used in NZ. Quickly googling it, from Asbestos Risk Management Ltd: “There has been a ban on the importation of raw asbestos into New Zealand since 1984 and from October 2016 there is also a ban on the importation of asbestos-containing products into New Zealand.”

          Even now the use of stockpiled asbestos products is not banned, I believe.

          In general, asbestos was still used because it was cheap. Added to that, the asbestos products had low desirability, and so the market kept them cheap. Enter the MoE looking for the cheapest possible products, and guess what was used in our schools for decades after the rest of the western world had given up asbestos?

          I know shocking stories at specific schools in Auckland but don’t think I can describe them without compromising the people who told me the stories. Start asking questions at every chance, at every rebuild and renovation.

      2. Or maybe we specified a shit design of old backwards-compatible locomotives intended to interoperate with 1960s technology…. and got exactly what we ordered? They sent us exactly what we ordered and paid for.

        Call me a ‘chinese apologist’ if you like, but I was very impressed riding the CRH380 Harmony doing 350km/h between Guangzhou and Wuhan. Turns out they are perfectly capable of making amazing trains… but yes, they’re are also perfectly capable of building poorly procured cheap ass trains too.

      3. That’s not entirely fair, AKL dude. Yes, the Chinese made locos had asbestos as a heat shield around the engines. Most engines made around the world for the last 200 years have used products containing asbestos to provide heat shield material, including Britain, Europe, USA, etc, until recently. People use asbestos cos it is bloody good at being a heat-proof material. About 30 years ago, we found that asbestos causes really nasty lung diseases if absorbed into the lungs. So, about 30 years ago, most countries stopped using it in new constructions – but millions of tonnes of it still exist all around the world, in buildings that you use every day.

        NZ has, as I am sure you have noticed, gone overboard on the Health and Safety front. We have, in my humble opinion, gone a bit silly on asbestos as part of that. It is safe, as long as you don’t breathe it in, or eat it. When it is encapsulated, the fibres can’t break free, and it can cause no harm. We could have, probably, left the asbestos wrapping on the heat shields on the Chinese made locos, for many years. But, being as we are NZ, with over the top H&S requirements – and being as they were new locos, which we had asked to be free of asbestos, we asked for it to be removed.

        Ever been in the underground overseas? Its full of asbestos. Loads of it. Just don’t tell anyone.

        1. The specifications for the locomotives stated no asbestos. The locomotives contained asbestos. Breach of contract. Simple.

  12. Great work. I’d be interested to hear how the OIA justifications for redaction stack up for each section. On what grounds for instance can they withhold something as material as that 5 minute changeover time?

  13. Actually I am not that shocked. From several exchanges I have had with staff in NZTA and Treasury I perceive that there is a hard core of economic rationalists in both organisations for whom the primary objective of transport policy is to minimise recurrent government expenditure. i.e. running costs. This trumps everything else. I perceive they place almost no value on climate change targets, other than doing the minimum to (just) meet policy targets. So if they can reduce Kiwirail running costs by 1%, whilst doubling emissions, they cheerfully will. Same with roads vs urban PT.

  14. How on earth does that group get labelled as ‘economic rationalists’ they are the opposite; ‘economic fantasists’

      1. If NZTA were economic rationalists we would have had congestion tolls a long time ago as we should have had. It doesn’t take much effort to implement what Singapore has now. It can be upgraded to full road pricing later. NZ keeps wasting precious capital to expand roading infrastructure for peak travel. The capital expenditure profile will be delayed with congestion tolls, not to mention increase PT patronage, reduce PT subsidy & drive more dense development around PT stations, & it would shift the financial viability towards more freight on rail reducing Kiwirail’s subsidy.

        We would also have defined future profile for carbon prices for socioeconomic analysis.

        I don’t know what is applied in NZ now but when I was doing such analyses10 years ago the base year real costs were applied to future years as well without adjustment. This does keep the analysis simple but misses real changes in future costs, eg the likely path of future real carbon prices.

        Where I am now changes in future real costs are considered (all denominated in the base year $’s). However, it does add further uncertainty as well as future real costs have to be estimated.

        Must say I am also perplexed by the amount of redacting. What is legally able to be withheld?

        I have two insights after 25+ years of transportation planning. Kiwirail should think about them.

        1) Planning studies always take twice as long as expected or twice as much resource. If a study finishes on time then its only 1/2 the quality it should be. Do it once & do it right.

        2) It doesn’t cost that much more in funding to do a proper study with peer review. Its the construction / infrastructure / transport services / policy implementation that costs big time. Far better to build the right thing a bit later than the wrong thing now.

  15. This is outrageous, not only because of the lack of competence (or corruption?) in KiwiRails board of directors but also that the issue was concealed through redacting information requested through the OIA process. The board should be replaced and I think there should be an inquiry!

  16. Electric locomotives are usually cheaper to buy and maintain than a comparable diesel loco. I suspect KiwiRail didn’t want the expense of maintaining and eventually renewing the overhead wire for a relatively small number of trains per day. The EFs needing a rebuild gave KR the chance to get rid of the electrification once and for all. However it seems to have backfired, as they now have to spend a couple of million a year maintaining it.

  17. An interesting idea for PoA. Perhaps two of the stored EFs such as 128 and 186 could be updated to work under Auckland OLE and do the shunt work between PoA and their Wiri inland port. There must be a spare diesel shunter that could be used at the docks to make up the trains ready for the EF to attach.

    1. In an ideal world that saw the entire North Island rail network electrified, then Last Mile electric locomotives would be the option for port work, and elsewhere, where electrification isn’t usually feasible. Such are already employed in Europe. See https://tinyurl.com/y72t2ylh which is but one example. Dual mode locomotives are the option where substantial sections of track are not electrified, and they can also be used in diesel mode for shunting operations.

      1. So a couple of dual mode last-mile diesel lococs would be perfect for PoA shunts from docks to wiri. As Patrick said above this would be great PR for PoA, cleaner quieter electric locos to replace diesels currenty used. Maybe since AC own PoA and AT then some AT expertise could be used to acquire dual mode locos, these may also prove useful to AT.

  18. Someone know how to forward this to Winnie & Prebble ? The more fresh air & daylight this gets before the election, the better. Good point about the board with no skills.

  19. As much as KR’s decision does seem to fly in the face of the overall evidence, swapping loco’s is not as straight forward as is described.

    Detaching the first loco, shunting it to a siding, securing it, starting up the second loco, performing whatever safety inspections KR’s procedures mandate, shunting it on to the front of the train, coupling up, performing a brake test.. all of this takes time, and I don’t expect 5 minutes is anywhere near achievable unless you have two Loco Engineers (LE’s), plus a shunter.

    Even if you allow longer, so only one LE is required, or you are able to time each train to coincide with a crew change at the location of changing locos (and that is bound to reduce efficiency of rostering) then you still have the added cost of employing a shunter to assist each movement.

    Add to that the inefficiency of having your assets (locos) waiting around at either end of the electrified section for their next service back, and the efficiency of changing locos starts to reduce.

    These are all inconvenient facts, which in the best tradition of all business cases which aim to reach a foregone conclusion, seem to have been missed in the case against de-electrification. Two wrongs don’t make a right!

    1. Normally the Electrics and the freight for the destination, Palmy or Hamilton, are uncoupled from the train and drive into the yard. Fresh diesel locomotives, likely heading to Auckland, Tauranga or Wellington, are attached to the remainder of the train for the onward journey, often with additional freight.
      The changeover takes at least five minutes, but no more than ten if the diesels are ready.

      1. I gave a break down of what was involved with a mainline changeover for a southbound freight at Te Rapa. It was over 30mins. A mainline changeover with staff ready to assist, locomotives ready to roll. Over 30mins. That is why kiwirail allows 40mins. They have for many years at such a location, and on the “hot” NIMT trains.

        If the train goes into the yard, it is going to take similar time, if not longer with conflicting movements.

        Through movements on trains that really do not need to stop at a location such as Te Rapa have the potential of big time savings by running straight through.

        All the carbon emission examples I believe is misleading. Especially if kiwirail can be more productive much more sooner, by removing many truck movements on the same routes that are burning much much more fossil fuel.

        If we fix kiwirail first without all this talk of massive expenditure that this country cannot afford, then it may have more hope of standing up and performing without dragging us all under a big dark cloud.

        And more hope of electrification later on down the track when it is proven over and over that rail in NZ really is the way to go.

        Look, it is decided wires are going up to pukekohe, and we are getting a third main with overhead wiri – Westfield while all this is being discussed.

        In saying all this, I have a “gut” feeling kiwirail will still run specific trains between palmerston north and te rapa even in amongst all the publicity about being diesel only on NIMT freight trains….

        1. I left the electric locomotives bit out of the last paragraph. That I have a gut feeling that kiwirail will still run specific freight trains between te rapa and palmerston north with the class 30 electric locomotives.

        2. So more freight on the main trunk line could save the electrics. I have seen some pretty good trains heading south lately. A large percentage of Coda containers. They have breathed a bit of life into things.

        3. Royce, even though we hear this and that. Alot of other things have happened. Look at the DBR locos, they were supposed to be all withdrawn in 2012 and weren’t until this year. And the class 30’s would surely last longer that any of those old fab locos. I wouldn’t be half surprised if kiwirail runs them right into the ground over the coming years. Now that there has been profits, they must just through money at them for certain trains. Example being 39* trains, 228, 229, 221, 220, 225,234 which all go into the yard for hours on end at te rapa for sure. So obviously locomotive changes are not a problem on such jobs. Where as diesels on such trains such as 217,215,216,212 are most likely more suitable. And a major point there also is the availability of diesels on the trunk when the overhead is off. A big thing that is being overlooked here.

        4. Yes, and look at were the LE’s are based. Of course the figures are cooked when they know if they don’t, Wellington and Westfield LE’s will run straight past their depots and travel much further up/down the NIMT.

          I fail to see anywhere in there that a crew change or loco change took 5mins. The best I seen was 7mins for a mainline crew change(no loco change) I know that scenario. It’s one locomotive only, and the train is relatively shorter.
          I cannot honestly comment on palmerston north figures, although some of those seem rather damn fast. But take a look at the te rapa figures. Alot of the sums don’t add up. Especially the grey TC arrival/departure times in comparison to what yard staff have recorded. I can assure you the TC times will be very accurate. But one thing amiss in all scenarios, is a through train not stopping. In stating that, those times all seem flawed to me, when it was KiwiRails initiative to have through trains that wouldn’t stop at all – of course specific services.
          I suppose I shouldn’t say this, but I do know all those people with their names blacked out. We have all had some “mighty” conversations over the years regarding such issues professionally. There are so many factors involving so many scenarios, it is quite somewhat mind boggling even for experts. Especially when it is pointed out that this hasn’t been done, and neither this, and this scenario wasn’t included which is the typical scenario. That may explain why I have used the term “dysfunctional”. Which is no real fault of those involved with that report.

        5. Additionally I read somewhere in that report, that it could cost up to $3.5bn to electrify waikanae-palmerston north, and te rapa-papakura. Yes up to $3.5bn.

        6. Hey SJC – I am trying to keep out of this until discussion on whatever the outcome may be becomes relevant after this weekend. Your insights were good until you came to the $3.5 billion figure. I could not let that go without a response.

          Here are some numbers to think about: electrification generally costs about $5 million/km for double track, and $2.5 million/km for single track. It will vary from region to region, but those are very generic international benchmarks.

          Papakura – Te Rapa is 98km double track. Therefore $490 million to electrify.
          Hamilton – Tauranga/Mt Maunganui is 107km single track. Therefore $267.5 million to electrify.
          Palmerston North – Waikanae is 81km single track. Therefore $202.5 million to electrify. One might add 20% margin for crossing loops and sub-stations.

          However, the total number of perhaps $1.152 billion to do all the above routes comes in well under the $3.5 billion you have just quoted which I note did not include Hamilton – Tauranga. Even if you double the numbers I have provided to go really high-side on the international benchmark estimate; it is still way less than $3.5 billion.

        7. Fair enough tuktuk. I just happened to view that in this same report.
          I have to ask though, do the figures you quote just now, include substations, possible overhead transmission lines, realignment and double tracking amokura – te kauwhata, and purchasing of electric locomotives. The report did say between $1.5bn – $3bn. (Correction I stated upto $3.5bn, when it was upto $3bn). So I am assuming $1.5bn for the overhead itself. Not inclusive power feed, associated track works new locos.

        8. SJC You obviously have considerable knowledge on KiwiRail, so may I clarify what we said in the article. The average time for changeover of locomotives in our article of 5 minutes was based on a total of four trials by KiwiRail in July 2016 at both Palmerston North and Te Rapa. The redacted sections of the better business case included the results of those trials. They showed the specific times for locomotive swap, and separately other transactions such as attaching or detaching freight. The time taken for swapping locomotives has been put forward as a reason for a switch back from electric to diesel locomotives on the central part of NIMT. Our article shows that argument does not stack up, because the 5 mins or so delay for swapping locomotives at both Palmerston North and Te Rapa is negated by the 10 mins to 20 mins faster speed of the electric locomotives over the electrified section of the NIMT (taken from the KiwiRail better business case).

          I am not understanding your comment that:

          “All the carbon emission examples I believe is misleading. Especially if kiwirail can be more productive much more sooner, by removing many truck movements on the same routes that are burning much much more fossil fuel.”

          As discussed above, based on the KR better business case, the decision to switch back from electric to diesel locomotives will give no saving in time on a journey from Auckland to Wellington or vice versa. So this option is not making KR ‘more productive’ as you seem to suggest. Other options such as upgrading the electronic control systems on the electric locomotive fleet, new electric locomotives, or our suggestion of dual-mode diesel-electric locomotives, would all make KR ‘more productive’ while providing the improvement in “reliability and efficiency for KR’s customers” that KR says it wants. These other options would give the same or better journey time (compared with a switch from electric to diesel locomotives) and therefore the same benefits in mode share shift from road to rail freight. That is, it is illusory for KR to claim the reduced greenhouse gas emissions from mode share shift as applying only to the option of a switch from electric to diesel locomotives. And of course the switch from electric to diesel locomotives adds an extra 12,000 tonnes of carbon dioxide emissions per year to the atmosphere, by burning an extra 8 million litres of diesel fuel per year.

        9. Notwithstanding the numbers quoted in that KR report, the issue is that 5 minutes seems a very optimistic figure for a loco changeover to occur… and regardless of this, there are labour and loco utilisation costs associated with the changeover process which need to be factored in. Achieving the faster possible changeover time can increase the labour costs too – I haven’t seen any discussion about the costs involved, merely the circular argument about the changeover over time versus faster sectional times possible with electric traction.

        10. @ AB: On the other hand, there is wastage in unnecessarily using two DL locomotives over the long flat sections between Hamilton-Auckland and much of Wellington-Palmerston if the locos are NOT changed.

          I believe Roger’s main point still stands, that the better business case does not make a justifiable case for ditching the electrics.

        11. Dave B. Exactly, you have nailed it. The better business case does not make a justifiable case for ditching the electrics.

  20. I think at one stage Peter Reidy talked about needing to electrify the entire North Island network to achieve standardisation which just made him look silly. That may be where the $3.5 billion figure came from.

    I allowed 20% for passing loops and substations to get to the $1.152 billion. This could be a little tight as I don’t have the international benchmarks for those costs. Locomotives? If the DL fleet is currently 63, then multiple that by $5 million per electric locomotive, one gets a figure of $315 million.

    1. The $5 million figure is a very rough translation of the cost of CRRC (Chinese) built electric locomotives for South Africa. I should also quote a price closer to home of $6.8 million per Siemens electric locomotive for Queensland. Note however that the Siemens locomotives are substantially more powerful than a DL.

      It should also be commented that CRRC’s electric locomotives have been in service in South Africa since 2013 with little comment or reported issue.

      In contrast recent orders of CRRC Chinese built diesels to South Africa have thrown up major problems with the alternators and (MTU) engines showing once again that CRRC (and MTU) do not know how to build successful diesel locomotives.

    2. How much did you allow for resignalling necessitated by electrification? I understand that it typically cost around the same as the electrification itself.

    3. To quote a real example, Auckland cost $80 million to electrify (wires, masts, power supplies), and signalling upgrades cost another $90 million (required to cope with the delicacies 25kV).
      So if the total cost was $170 million, and 175km of track were electrified, that’s $1 million per line km. And remember that it was installed on weekends, and at night, while keeping the rest of the network running in-between (mostly).

      So say $1 million per km. Double track: $2 mil per km.

      Time to stop mucking around with batteries and diesels – just get it done!

      1. I imagine the signal spacing between Pukekohe and Hamilton will be further apart as the frequencies wont be as high. This should mean the per km cost of signalling will be lower than within Auckland.

  21. In New South Wales they used to swap diesel and electric locomotives at Lithgow and Gosford. For passenger trains the time allowed in the timetable was 8 minutes.

    1. …and leaving the changeover times aside, they must have changed the loco for a reason. I’m picking that Gosford and Lithgow were the limit of electrification and the trains couldn’t continue without changing.
      While the change would have been a pain for the staff, the changeover must have been worth it by some metric (Sydney Underground?) – electrics are faster, less noisy, are zero-emission and are cheaper to run – all the reasons the Kiwi Rail need to keep theirs and expand their range.

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