KiwiRail is reviewing railway leases, affecting landowners along national rail corridors.
It has more than 2000 individual leases nationwide, mostly small bits of land along the rail corridor.
The review of leases includes liaising with land occupiers to determine the condition and nature of the land in question and its productive use. In some cases, substantial increases in rentals have been proposed.
KiwiRail also wants to recover its costs, with rates and administrative expenses to be covered by the occupier of the lease. A minimum fee of $350 will apply.
Farmers are already responsible for boundary fencing and stock control, as under the Fencing Act of 1978, KiwiRail is exempt from responsibility for boundary fencing. In the past, pest and weed control have also been undertaken by farmers.
Since the rental review began, Federated Farmers has been contacted by farmers concerned by the size of proposed rent increases and a lack of an objective standard for the value of the lease.
Federated Farmers has met KiwiRail to discuss management of these leases. While recognising that individual farmers will make their own agreements with KiwiRail, we wanted to establish some general principles, to achieve fair and reasonable settlements.
These include having a realistic, independent valuation of the land, which should be the basis of rental paid. A formula of from 1-4per cent of the land value (depending on land use and contour) was discussed.
We do not think that KiwiRail's administration costs should affect the value of the lease to the farmer. Longer term leases (with several reviews and right of renewal) are a good option, making the lease more valuable to farmers and reducing KiwiRail's annual administration costs.
Access grants are a separate issue and should be dealt with as such.
Weed control and boundary fencing should be agreed as a component of the lease agreement.
Federated Farmers advises all members who don't agree with proposed lease conditions to not feel pressured into signing, but talk to KiwiRail about more favourable terms.
Federation policy staff are there to help.
- Dr Lisa Harper is a Federated Farmers regional policy adviser.