This is a guest post by Darren Davis. It originally appeared on his excellent blog, Adventures in Transitland, which we encourage you to check out. It is shared by kind permission.
Rail Network Investment Plan quietly dropped
While much media attention focused on the 31st March 2025 announcement that the replacement Cook Strait ferries will still be rail-enabled, the 2024-2027 Rail Network Investment Programme quietly, and without fanfare, appeared on the KiwiRail website. This was nine months late as it should have been published before the start of the 2024/2025 financial year on 1 July 2024. This delay was due to disagreement between KiwiRail and the then Minister of Transport, Simeon Brown, on the content, quantum of investment and direction of the Rail Network Investment Programme.
The implications of the Rail Network Investment Plan are far-reaching and the investment focus is striking more for its omissions than for its inclusions.
According to the KiwiRail website, repeated in the Rail Network Investment Programme itself, the investment emphasis for the 2024-2027 period is for:
- investing in the busiest and most productive parts of the existing rail network to support the efficient movement of freight
- investing in the metropolitan rail networks to support the efficient movement of people in Auckland and Wellington.
The “busiest and most productive parts of the existing rail network” is code for the Golden Triangle of the Upper North Island (all classified F1 in the table above); the rest of the North Island Main Trunk (generally classified F2) and individual isolated sections of the rest of the national rail network.
But significant key chunks of the South Island rail network are classified as F3 including Christchurch – Picton and Rolleston (just outside Christchurch) – Sawyers Bay (just outside Dunedin). The North Auckland Line, just expensively upgraded to carry higher freight axle loads and with clearance for hi-cube containers, is classified as F4.
Connecting the dots between “investing in the busiest and most productive parts of the existing rail network to support the efficient movement of freight” and the classification shows that the Government’s emphasis is on the Golden Triangle of Auckland, Hamilton and Tauranga (which has around 40 per cent of New Zealand’s population) with a lesser emphasis on the rest of the North Island Main Trunk line.
This has significant implications for the South Island. While the decision to purchase new rail-enabled ferries is good news, what is not so good news is the low priority given to the spine of the South Island rail network from Picton to Dunedin.
Are we back to managed decline?
In the Efficiency and Productivity section of the Rail Network Investment Programme (RNIP), it states: “Value for money is a core driver of the GPS [Government Policy Statement for Land Transport] and for KiwiRail and is therefore woven through this RNIP. It means taking needs-based investment decisions which prioritise productive use of the network and safety critical investments.”
Again, what is not said here is as, if not more, critical than what is said. But this is made more explicit a bit further on where it states: “Over the next three years, KiwiRail will instead focus on improving reliability on the busiest, most productive routes, maintaining performance in other priority routes and safety and compliance on secondary routes.” [my emphasis]
This seems to clearly a signal to the return of the bad old days of privatisation where the network was “maintained” largely through speed restrictions where maintenance is either deferred or not carried out at all on “secondary” lines of the network.
It has been enormously expensive to recover the New Zealand rail network, including the metropolitan networks in Auckland and Wellington, to a more acceptable standard. Auckland will get close to this with City Rail Link while Wellington still has a significant backlog of overdue maintenance. And it would be terrible to return to the bad old days.
While it is a positive that the Government sees the benefit in metropolitan rail networks and in Golden Triangle rail, a return to what is in effect managed decline for much of the rest of the rail network is very bad news. This includes the trunk South Island rail network and nearly all branch lines in the North Island outside of the Golden Triangle.
The Rail Network Investment Programme somewhat euphemistically states that “At this level of investment, it will take longer than previously envisioned to achieve a resilient and reliable national rail network.”
There is (some) good news
Some (potential) good news
While I do not own a personal crystal ball, there are a couple of clues in the Rail Network Investment Programme itself. The plan provides $65 million in funding for a detailed engineering design for the Marsden Point rail link. This is a planned 19 kilometre spur designated in 2012 off the North Auckland line at Oakleigh to Northport at Marsden Point, one of the only non-rail connected ports in New Zealand. The bulk of this money is due to be spent in the 2025/2026 and 2026/2027 financial years.
In addition, there is still some funding left for the upgrade of the North Auckland line between Whangārei and Otiria to support 18-tonne axle loads, intended to promote rail transport of Northland logs. This funding was previously on hold pending the outcome of decisions on the Marsden Point rail link.
But wait, there’s more. There is also $40 million worth of Provincial Growth Fund money for land acquisition with $11.4 million remaining to be spent in the current (2024/2025) financial year.
According to the KiwiRail update to the Northland Regional Transport Committee on 1 April 2025,
“A lot of work has already been done – including geotechnical testing of ground conditions along the 19km route. We have been engaging with landowners and mana whenua along the route and have now purchased most of the land needed. We have also made a slight realignment to part of the route to avoid cutting across any Māori freehold land, with the required change to the rail designation (consent) currently with Whangārei District Council for approval. KiwiRail is working on the detailed business case, including accurate costings to build the new line…We intend to submit the business case to the Government later this year.”
While we need to wait until the New Zealand budget is announced on 22 May 2025, it would be very unusual for a project where land acquisition is close to being completed and where detailed design investment is committed not to proceed to construction.
Final thoughts
- The devil is in the detail of the Rail Network Investment Programme 2024-2027 and often such documents are written in a coded way where you need to read between the lines. And look out for what is not included.
- But clearly this is not good news for the secondary lines in the New Zealand rail network, and for the bulk of the South Island rail network in particular. It’s hard to read this as anything other than a return to the bad old days of “managed decline” of the secondary rail network of the privatisation era.
- In the list of things not included is any mention of passenger rail outside of Auckland and Wellington – apart from passing mentions of the existing tourist-oriented services and the existing commitment to new rolling stock for Lower North Island regional services.
- Northland appears to be the exception that proves the rule, aided by its position in the Upper North Island. People cognisant with the political dynamics of the current New Zealand coalition government may wish to speculate on why Northland appears to find such favour.
- While it’s mostly bad news, it was also curtains three decades ago for urban rail in Tāmaki Makaurau/ Auckland, Aotearoa/ New Zealand’s largest city (population ~1.8 million). Even with the current not particularly rail favourable government, there is heavy and ongoing investment in the Auckland and Wellington rail networks.
- The new Minister of Transport, Chris Bishop, has in the past expressed support for investment in Golden Triangle rail so it will be interesting to see if there are any specific announcements about this in the 2025 budget, including following on from business case work done on potential extensions of rail electrification.
- By the way, it hadn’t escaped my attention that both the Wellington and Northland regional transport committee agendas mentioned were for meetings on 1 April but I’m sure that the information therein contained is in fact true!
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While far from ideal, plans and budgets can at least be changed with the stroke of a pen. The decision to go with rail enabled ferries is a huge positive for the South Island network as it is a 30 year decision.
The South Island network could have been close to killed off had National and ACT got a couple more seats between them at the last election.
The outstanding question will be how much the Government wasted by cancelling the iReX boats when all they needed to do was cancel most of the bloated shore works.
(We are all thinking it- wherefore means why).
The word for “where is it going” is “whither”. I think I see why that wouldn’t look good in the headline.
This. Like, the prefabs are fine, the minimum viable product was the ramps, everything else is optional improvements that have to be done later. At least we’re not losing capability now, even if it’s a worse outcome that the previous status quo. But this is light years ahead of what NACT wanted, so NZF deserves credit.
About $800m wasted was the last suggestion. Yes, the should have simply scaled back the shore works and kept the world’s best boat deal, the one where the Korean government was paying for half our ships to keep their shipyard ticking over.
Wherefore means “how come”. I guess the title should have said Whereto now with KiwiRail?
Two points:
1. An examination of KR actions, rather than rhetoric, since 2008 strongly suggests it has always been in managed decline at the behest of the road lobby. KR are remarkably consistent and dedicated to the growth of road freight.
2. Regards the spur line to Northport, the allocated funds for detailed design and money spent to date on a scheme, that in principle wont get through the Environment Court, does not imply it will get built. Its just welfare for those involved with the design in a similar way to the $347M spent on design of the landside infrastructure for IREX – that was never intended to be built.
“Value for money is a core driver of the GPS [Government Policy Statement for Land Transport]”
And that is why the government priotises projects which return less than 10cents for every dollar spent and cancels projects which return more than one, two or more dollars for every dollar spent.
The party of prudent spending! 😀
They didn’t specify what kind of value for how much money!
Roads and highways in rural electorates that vote National: Poor value for lots of money!
The new Ashburton container hub is a good example of the local transport and council getting together to use rail. If there is local interest, then the Govt should get behind Kiwirail to ensure the rail lines are suitable to carry the tonnages involved.
So why Northland? Obviously logs and containers can be to be carried to Marsden Port if the new line is built. And it can help service the Auckland market. In the meantime, I would suggest local interests and Kiwirail should register their commitment by absorbing the costs of road bridging from the Whangarei rail yards to the port. Putting your money where your mouth is comes to mind. They might even learn something and if the line is built it can start carrying significant volumes from day one. At the moment going by David’s video the NAL is a single commodity line carrying containers to and from the Kauri dairy factory it should be much more.
Everybody knows why Northland.
Winnie and Shane want it, and the Coalition of Chaos needs Winnie and Shane.
Well there you go then and you don’t need me to waffle on. But isn’t that my point it’s not just politicians it’s also local interests like the port and the regional council and customers and transport operators. And the general public. We have to show we want it.
All these programs were started under the previous government and had the cyclone not thrown a spanner in the works they may well have ben or being built by now .
New Zealand is blessed to have a national rail network that currently connects 13 (14 once Gisborne / Te Tairāwhiti is reconnected to the network) of the 16 regions in the country, with a potential catchment of approximately 84% of country’s population with freight and increased passenger rail services excluding Auckland and Wellington metro train services.
With the Cook Strait ferry saga done and not quite dusted, Darren Davies opinion raises the question, what is the future of rail in New Zealand as a freight and passenger land transport system and does the current business model of Kiwirail Holdings Ltd t/a Kiwirail, a ‘for profit’ SOE, operating an under utilisied ‘closed access’ national land transport infrastructure asset, is fit for purpose as a future sustainable, environmentally friendly national land transport network, moving freight and people across the country?
There is strong support to reform rail, to provide better commercial and asset utilisation with the following concept –
a. Separate the national rail network (rail infrastructure including the Cook Strait rail link and train control) from Kiwirail Holdings Ltd, to become an ‘open access’ strategic land transport infrastructure asset for any domestic and/or international train operator’s, under the control of NZ Railways Corporation – a ‘not for profit’ statutory corporation, land holding entity of approximately 18,000 hectares of railway land, to become a land holding, rail infrastructure operator and future co-owner of the proposed national regional passenger rail fleet.
b. Kiwirail Holdings Ltd remains a ‘for profit’ SOE, with the government holding at least 51% share holding of the company, operating as a train operator of current and future rail freight and the 3 ‘scenic’ passenger train services.
c. Re-introduce urban metro in the Christchurch and Dunedin, regional and inter-regional passenger rail services with connecting local bus services across the country, using Motu Move – the national contacless ‘tap & travel’ payment system since the rollout of the system has started,
Planning and reforming of rail in New Zealand can start now with more action with less ‘what needs to happen’ talk fest’s.
The main thing that is needed is funding.
I’m not a fan of having a separate entity in charge of tracks and running trains, it’s what’s done in the UK and is inferior to the German and Swiss networks that have one operator of tracks and trains.
What ever is changed, you raise a good point. Look to overseas models to see what works best. Of course NZ might be different in other ways so this is not always a straight forward exercise.
Think we at least need have a separate national rail freight business from the other “things”.
Yes and funding probably our biggest issue. This from Wikipedia, but thought a good summary:
https://en.wikipedia.org/wiki/Rail_transport_in_Europe
“The European Union (EU) aims to make cross-border operations easier as well as to introduce competition to national rail networks. EU member states were empowered to separate the provision of transport services and the management of the infrastructure by the Single European Railway Directive 2012. Usually, national railway companies were split into separate divisions or independent companies for infrastructure, passenger and freight operations. The passenger operations may be further divided into long-distance and regional services, because regional services often operate under public service obligations (which maintain services which are not economically interesting to private companies but nonetheless produce societal benefit), while long-distance services usually operate without subsidies.[citation needed]
An ETR 500 train running on the Florence–Rome high-speed line near Arezzo, the first high-speed railway opened in Europe[3]
Across the EU, passenger rail transport saw a 50% increase between 2021 and 2022, with the 2022 passenger-kilometers figure being slightly under that of 2019 (i.e. before the COVID-19 pandemic).[4] The trend is expected to continue and rapid investments in European Union railways are under way.[5]
Switzerland is the European leader in kilometres traveled by rail per inhabitant and year, followed by Austria and France among EU countries.[6] Switzerland was also ranked first among national European rail systems in the 2017 European Railway Performance Index, followed by Denmark, Finland and Germany.[7]”
It makes proven sense to have a single competent NZ organisation operating both rail tracks and trains.
The efficiency of properly run rail networks is undisputed.NZ once had a rail system to be proud of and can have that again in future with visionary strong leaders.
The short sighted 2024 anti-Rail Govt in the palm of Corporate Big Road & Oil donors pushes to entrap 1960’s obsolete road & highways total dependency, glaringly out of step with progressive 21st Century multi modal rail passenger and freight transit.
nah, there has to be a separation of operations and infrastructure, else profit-centric right-wing governments will demand rail operations pay for infrastructure upkeep, and accuse rail of being economically unviable if it can’t.
rail infrastructure should be classed with national-level road infrastructure and funded from the same pool, with open access to both a nationalised publicly-owned rail operator and private operators (including heritage groups like Steam Inc and the RES)
A government could run down rail just as easily under either models if they wanted to. The key is to get rail to being a key part of our infrastructure for a large number of people. A right leaning government in Germany or Switzerland doesn’t see the rail network being run down.
Except that Germany has a bunch of different train operators. Netinera and FlixTrain are two very different examples.
Germany used to have an excellent train system – when it was all run by DeutshBahn – but now that they have divested and have the private sector involved, from what I’ve heard from my German friends, it is now a really shit system.
The network is still owned by Deutsche Bahn, 99% of long-distance trains are DB with some private operators in the regional passenger sector. The reason the network has declined so badly is 100% the fault of DB & the Government letting the infrastructure decay, much the same as in NZ. There is absolutely no blame that you can apportion to private operators in Germany for the chaos
Thanks for that info Kraut, very useful to know. Any idea as to WHY the DB would have let / wanted the Rail network to get run down? There must be some reason. They used to be so proud to have the trains all running on time. What has changed?
@average human Germany is first and foremost a car country.
I agree that the UK model has proved the way not to do it. However the German model has issues too, with a lack of investment (as claimed) causing a considerable drop in punctuality of services operated by DB. The other point about Germany is that there are multiple other private sector operators running services including National Express Group and Transdev. The entrance of private sector operators into each of the EU rail markets is driven by the EUs 4th Railways Package, so there will further entrants – even into France 🙂
Jezza – We currently have it with Kiwirail being a national rail infrastructure and train control operator, a train operator and ferry operator and we don’t have a national regional/inter-regional passenger rail network.
It is worth noting that:
(i) The German network is presently a basket-case as well.
(ii) The British model was an improvement on their previous state-owned model (and continues to deliver increasing volumes of freight; notwithstanding the end of coal).
Allowing private logistics companies to utilise the rail network will take them out of conflict with the idea of Rail; demonstrating its value to them (and their political proponents) and lead to further investment (not to mention greater accountability from Kiwirail in respect of its network due to the added scrutiny).
Didn’t we try that here with Toll taking over NZ Rail as Toll Rail – and then failing miserably? Wasn’t the rail system here then bought back for a single $ or something?
True but those railways are run as a public good and make money from operating in other countries, especially the German railways who own the UK’s main railfreight company.
For some reason, the Deutsche Bahn recently sold their DB Schenker business, a logistics company that actually made profit. Apparently, one of the reasons is short-term debt reduction…
Kris – the plain and simple truth is that rail to Gisborne is never coming back. Plain and simple. They’ve torn up the tracks through the Esk Valley just north of Napier, destroyed in the Cyclone, and they have zero plans to reconnect the line.
average human – Gisborne can be reconnected as a public/private partnership, as the Napier to Gisborne rail corridor is still availabe but a diversion would be rereuired to around Maiha (between Kopuawhara Monument and Beach loop) due to large slips along destroying that section of the rail corrodor.
Kris – face the facts – its never going to happen. Just: never.
Who on earth would be the private sector company willing to put the money up for this?
average human & jezza – Need to stop looking at the future through ‘here and now’ lenses.
The national rail network, is the country’s second and only sustainable, environmentally friendly national land transport infrastructure asset and the rail corridor between Napier and Gisborne is part of the network.
Re-opening of the corridor will allow increase short and medium rail freight and inter-regional passenger rail services between Gisborne/ Te Tairāwhiti and Hawkes Bay regions, with connecting inter-regional passenger rail services at Napier to Palmerston North, Whanganui and Wellington.
Currently rail freight in New Zealand is predominantly medium and long haul, not local and short haul freight, as Kiwirail doesn’t operate local freight and struggles with short haul freight, as they dont have the necessary locomotive’s for these operations.
It’s nothing to do with future lenses, it’s about cost benefit. There are many parts of the national rail network that need improvements or extensions that would give better benefits than this. We can’t even run passengers through the Kaimai tunnel at the moment a key part of the Golden triangle.
If in 30 – 50 years time and these improvements have vastly improved the rail network and brought short haul freight back then by all means open to Gisborne again but it’s so far down the priority stack at the moment.
TBH even then I think there would be more bang for buck opening a line between Blenheim and Nelson.
The road freight groups who pay for the government need to see a way to operate with good commercial value by combining road and rail carriage of goods. A structure that aligns commercial value with national infrastructure value is the one that will receive most support. Involving producers as well as logistics entities can lead towards a balanced infrastructure that includes rail ‘where it makes sense (or dollars)’.
Streetguy can you please provide evidence that “The road freight groups who pay of the government…” I’m not trolling I wan the evidence. I have gone through every registered donation to the National Party in 2023 & 2024 check every individual for shareholding and directorships and I Tcan’t find this smoking guy. The closest is a donation from Turners Cars (Tina’s mob) and that’s it. Lots of developers and builders and land bankers but no road freight or car companies. So please can you back up your statment.
I feel like A and B will happen.
The Ontrack 2.0 would make it’s money from leasing/managing the massive land portfolio and track access fees (Comcom controlled).
It’ll allow KR and other providers and even playing field for getting rail slots, and allow them to advocate for higher track uptime.
Makes sense, ideologically for Nats/Act, and for NZ. As current model KR underfunds maintenance as they don’t want to pay for it, and stops anyone else running services (like Dunedin rail etc).
I do think the regional/local rail will be a local gov thing rather than a central gov thing. But that’d not a bad thing.
Freddy – Your are correct. Regional/inter-regional passenger rail is with the 13 regional councils as it integrates with their local bus services.
Te Huia train service gives shows how this will work, being the main component (between Hamilton and Auckland) of Waikatio region’s public transport network, feeding into the regional council’s local and regional ‘Busit’ bus services where both transport modes use the BeeCard ‘tap & pay’ payment system.
Is it really good news that our rail investment is based on “does Shane Jones reckon its a good idea and will win him votes”?
It was based on “Simeon Brown doesn’t think it is a good idea and we should build roads”, so that is an improvement.
At least the roads will get used…
Unless they are committed to moving the port to Marsden Point, I am not sure I can see any point throwing money at it.
JimboJones, amazing it took this long for someone to mention the obvious! Rail line to Marsden Point is not to service the Whangarei area, maybe good for a few logs but ultimately it will be to replace the Auckland Port (container terminal)
Yes to the PoA moving to North Port.
Yes to NorthPort supplanting the present mess down at the bottom of Grafton Gully.
Yes to a decent Rail line from Marsden Point to Auckland – my question is, how much of that rail line from AK to MP already exists? Half? A third? Two thirds? Anyone know?
It’s around about 85 % that already exists.
No way they will move PoA to Northport in my opinion. Too much freight (and growing) to move from way up north on anything but some mega impossibly expensive freight system to get to where people live, ie Auckland (~1/3 of NZ). Ships are way too efficient at moving large lots of goods.
Grant – agree.
However, what I think is much more likely is the development of a container terminal at Marsden Point to service exports from Northland and take some of the Auckland import traffic as Tauranga already does.
The natural first step to this is a rail line to the port, which will also have the benefit of moving logs off the road in Northland.
Agreed jezza.
Also, I wonder if we ever reduce our car dependency somewhat they will be able to downscale the car import component which is a massive part of the PoA footprint.
Yes, there is size constraints at Northport & Tauranga as well if I understand it.
It seemed that Simeon both said terrible things AND did terrible things.
Bishop says nice things, but doesn’t seem to actually do anything.
I wonder if the coalition used Simeon to do the hacking and slashing it wanted, then brought Bishop in as a diplomatic lame duck to calm the waters while the Simeon stuff very much remained in place.
moved Simeon to slash and cut at healthcare, more like. probably to make the public service suffer and allow his successor to dangle privatisation in front of us as a “better” alternative.
New Zealand no longer can afford it – thanks to those who voted Labour!
Voted for Ardern, and added 104 billion to our debt (Ok circa 25 billion Covid).
Now interest in $10 billion per year (3 new Dunedin hospitals).
Vote socialism spend up on nothing tangible and then the debit hang over (in this case for a generation)
ok grandpa, go take your meds
Or vote National (Muldoon) and end up suffering in the future due to not having a super fund that could have funded infrastructure that is needed instead borrowing from overseas pension funds and have them profit instead.
poor old man forgot that debt as a percentage of GDP increased from 33.8% of GDP at the end of Labour’s government in 2023 to 44.3% in the third quarter of 2024, under NACT. Sounds like the “fiscally responsible” right wing parties are doing economically worse
but, y’know, some people are clearly dumb enough to believe lies about lower taxes and trickle-down economics; and that barely-left wing liberalism is “COMMUNISM”
The govt made KiwiRail cut $200mill out of RNIP before it could be issued
My guess is they’ll ‘announce’ Avondale Southdown but nothing particularly will change (and funding will be for some future term like 2027), and do similar with Marsden Point. This is for NZF rather than Nats particularly supporting/caring about the project, but it’s a lot easier to go with the flow with those projects, as Avondale – Southdown is still at the announcing but costing nothing stage (as KR is doing it all internally).
They’ll also do some more golden triangle electrification (my guess is on the Tron gap), and possibly another track on the Southern for part. Relatively cheap (or free for unfunded announcements) projects for decent headlines. The big ticket announcement will be something about level crossing removal in Auckland, and some Auckland/Wellington upgrades.
I think most of this will be unfunded announcements rather than anything else though.
The reduction in network funding is a response to the very low number of trains now using it. The North Auckland Line is shocking – it has one small train a day for one customer.
KiwiRail have exited most rail freight markets, to focus on a very narrow business plan that essentially just caters to the ports, moving import/export cargo, and increasingly just the overflow from trucks.
The network would be bustling if it were opened up to private rail companies in a normal competitive environment that promotes innovation and growth and competition, but no political party wants that, as they all want to be able to control how rail is used (or not used) in line with their politics. That means leave KiwiRail as a monopoly and keep it subdued.
The issue lies in how much money the Government is prepared to put into the railway network as a whole, if with one qualifier:
* The Golden Triangle (probably) pays its way, in terms of above- and below-rail costs, including a return on capital.
* The rest of the network (probably) meets its above-rail costs, but contributes nothing to its below-rail costs.
* Overall, this allows the KiwiRail management to report that the system /as a whole/ covers all its above-rail costs, but nothing towards the below-rail costings.
So, the public money needed for rail is needed for the three-quarters or so of the network outside the Golden Triangle. (The finances for urban rail are separate to this. The battle, then, is to find the public money to keep this wider extent of the network in operation, at all.
In terms of road freight economics, the level of RUCs does not recover the damage that trucks impose *as a whole* on the road network. However, they are sufficient to meet the costs that trucks impose on the ‘core’ network – that is, the part which competes with rail. The subsidy is needed for the rest of the road network, but this is not ‘unfair’ to KiwiRail because it does not run there. And once upon a time, the old Tranz Rail was the second-largest truck operator in the country.