Report finds rail injects $1.5 billion a year into New Zealand's economy

The largest contribution rail was making was the reduction of road use, KiwiRail chairman Trevor Janes said. Photo / File

The Labour-led government is promising to invest in rail after releasing a report it says National sat on which shows $1.5 billion of hidden benefits from rail a year.

The study by EY quantifies the savings from having fewer trucks and cars on roads, less damage to roads, not as much congestion and reducing greenhouse gas emissions.

Transport Minister Phil Twyford says the EY report was commissioned by NZTA and KiwiRail in 2016 and was sat on by the National government because it had an ideological bias against rail.

The report says rail networks have long been thought of as monopolies with high up-front costs and significant barriers to entry.

Many expect governments to be involved, but there is debate about how much.

The experience of KiwiRail is a live embodiment of this debate, with several operating models over the past 30 years from full public ownership to full privatisation, the report says.

The current model lies towards the "public ownership" end of the spectrum.

KiwiRail is a state-owned enterprise which receives capital from central government and subsidies from regional council rates and from the National Land Transport Fund.

The quantifying of the public benefit of rail will help support the rationale for continued intervention, or provide a basis for the retreat from financial support for rail, the report says.

Twyford says rail has been on life support for too long.

"The Labour-led government will restore balance to transport funding, boosting investment in rail infrastructure both for passengers and freight.

KiwiRail's Trevor Janes. Photo / File

"This will include significant investment in regional rail via the Regional Development Fund, as set out in the Labour-New Zealand First coalition agreement."

The establishment of a light rail network in Auckland will significantly increase the $1.3b a year of benefits that road users, including freight companies, experience from reduced congestion, Mr Twyford said.

KiwiRail chairman Trevor Janes said the total amount far exceeded what the taxpayer was spending on rail.

The benefits far exceed what the taxpayer is spending on rail, KiwiRail chairman Trevor Janes says.

"These benefits do not show up on the balance sheet, but they are very real, and they make a huge contribution to New Zealand," he said.

"The areas where rail is delivering for New Zealand include cutting congestion, reducing greenhouse gas emissions, improving safety on our roads and lowering spending on road maintenance and upgrades," Janes said.

The largest contribution rail was making was the reduction of road use, he said.

"Rail is taking cars off the road and it's taking trucks off the road. That is saving the country $1.3 billion a year because it cuts congestion for all road users, including other freight movers," Janes said.

"Using rail cuts New Zealand's carbon emissions by 488,000 tonnes a year. That is the equivalent of taking 87,000 cars off the road, saving millions of dollars," he said.

"Rail freight has 66 per cent fewer carbon emissions than heavy road freight which is useful for New Zealand reaching its ambitious climate change targets."

The study found that without rail there would be an additional 100,000 daily car trips on the road each year - the equivalent of 76 million light vehicle hours reduced through rail, and 57 million of those hours were on Auckland roads.

KiwiRail's asset base:

• 4000 km track (of which 500km mothballed)
• 1656 bridges
• 18,000ha of land managed
• 198 mainline locomotives
• 4585 freight wagons
• Two owned and one leased ferry
• 4200 staff

Each week, train control operations manage the movement of:
• 900 freight trains
• 44 inter-city passenger trains
• 2200 suburban passenger services in Wellington
• 2000 suburban passenger services in Auckland

- additional reporting NZN