Pressure mounts to build Auckland's electric trains locally

Business leaders are getting on board with unionists in campaigning for Auckland's new electric trains to be built in New Zealand.

That follows an economic impact report commissioned by Dunedin City Council and the Rail and Maritime Transport Union which predicts a contribution to GDP of up to $250 million from building about 70 per cent of the trains locally.

Although electric motors and other traction components would still have to be imported, the Berl economic consultancy says doing the bulk of the building at KiwiRail workshops - whether in Dunedin or the Hutt Valley - would create up to 1272 jobs over a 45-month period.

The report has won backing from the Dunedin and Hutt Valley chambers of commerce, as well as the Council of Trade Unions, and rail workshop employees from both centres will attend a rally in Wellington today to launch a build locally campaign.

But KiwiRail chief executive Jim Quinn, while welcoming the effort put into the exercise, said last night that the Government-owned corporation was unlikely to bid for its own contract.

"We haven't made our final call but think it would be very unlikely," he told the Herald. "It is hard to see any way we could be genuinely competitive - people around the world build these things for a living, and EMUs [electric railcars] are a sophisticated bit of kit."

The Government intends lending KiwiRail $500 million for a fleet of up to 114 railcars to start running on Auckland's tracks in 2013.

About $375 million is likely to be spent on the trains themselves, of which the Berl report estimates that $260 million could be kept on New Zealand soil.

It says that at a time when New Zealand is borrowing heavily overseas "it seems prudent for Government to be looking to New Zealand sources to produce the rolling stock, rather than sending a further $260 million offshore".

Despite the short run of the contract, which KiwiRail hopes to sign early next year, the report says skills developed to meet the order would flow into other industries and suggests New Zealand might earn itself a foot in the door of a lucrative international rolling stock supply market.

It also predicts "whole of life" maintenance cost savings from building up extra capability needed to produce the trains.

Berl director Kel Sanderson said KiwiRail's workshops had been building rolling stock for generations, from steam trains to Auckland's refurbished locomotive-hauled carriages.

Although electronic and motor equipment would have to be imported, "once you get rid of that it's not much different from making a bus".

He also noted that New Zealand firms were exporting buses, fire engines and airport air-bridges around the world.

Dunedin City Council member John Bezett, who chairs its economic development unit, said the Hilldale workshops in his territory employed 185 workers, including about 15 apprentices and would be "quite capable" of building electric trains.

"The addition of jobs would be huge for Dunedin - there would be significant spinoffs from the spend, and a lot of other jobs would be created downstream."

But Mr Quinn said bidding for its own contract would expose KiwiRail to too much risk, at a time when Auckland "desperately needs these trains and for lots of reasons we are doing this probably later than people would have liked".

"There just isn't the time to do this - we absolutely must deliver the quality Auckland needs for a world-class metro system."

Transport Minister Steven Joyce said that although the report was an interesting document, he believed its analysis was "a bit once-over-lightly" because of difficulties comparing supply costs from various countries.