KiwiRail chairman Greg Miller (left), acting chief executive Todd Moyle, Deputy Prime Minister Winston Peters and Regional Development Minister Shane Jones. Photo / Tania Whyte.
KiwiRail chairman Greg Miller (left), acting chief executive Todd Moyle, Deputy Prime Minister Winston Peters and Regional Development Minister Shane Jones. Photo / Tania Whyte.
Upper North Island freight industry shakers and movers are hoping KiwiRail is a winner in next week's Budget given the coalition Government's focus on regional development and zero carbon emissions. The question is where any Budget funds for the state rail operator should be spent. Andrea Fox reports.
Two Government-commissionedstudy reports recently released by infrastructure and associate transport minister Shane Jones - the Northland Rail Business Case and the Upper North Island Supply Chain Strategy - identified rail as key to economic freight flows, getting trucks off the road, and relieving traffic congestion in the Northland-Auckland-Waikato-Bay of Plenty triangle.
The Ministry of Transport-authored rail business case said the Northland rail line between Westfield, Auckland and Otiria, 60km north of Whangarei, is so decrepit it will be unusable within five years if not rehabilitated.
It identified it would cost around $800 million to renew and upgrade the existing north Auckland line and build a new rail line to Northport at Marsden Point, which along with Nelson, is the only port in the country without a rail connection. Construction would take at least four years.
A KiwiRail train hauls logs through Pekapeka Swamp to Napier Port. Hawke's Bay Today Photograph by Warren Buckland.
The business case, funded from the Government's $3 billion Provincial Growth Fund (PGF), suggests the fund could be a contributor to the project cost. This has already been the subject of "conversations", it says.
While some sector stakeholders suspect the other major project, the ongoing upper North Island supply chain study, will have a pre-determined outcome because it's championed by NZ First's Jones, a fan of ports consolidation, there's general agreement rail improvement is a no-brainer.
Where they may not be in total accord is where any Budget funds for the state rail operator KiwiRail should be spent.
Ratepayer-owned Ports of Auckland (POAL) puts a big red circle around the main trunk line through south Auckland where freight and passenger congestion is rife. The eastern Auckland line also enters this line.
Spokesman Matt Ball says POAL wants the "super busy" dual track between Southdown and Wiri turned into three or four lines which would enable trains to pass each other and criss-cross and "massively increase capacity".
KiwiRail had done a business case for a third and fourth line and Labour had indicated funding for the project, he said.
"We are hopeful for that (in the Budget). That whole project would be fantastic for freight and passengers and unlock the real potential of the rail network through Auckland."
POAL has little interest in the case for rehabilitating Northland rail because it doesn't have assets there, Ball says.
But it is not entirely self-interested. A third track would be very useful for the Port of Tauranga's south Auckland freight hub Metroport and KiwiRail's freight hub, he says. It would be the fourth line that would really benefit POAL.
Will the sun come out for KiwiRail on Budget day?
Port of Tauranga (PoT) and deepwater port Northport at Marsden Point have a keen interest in the future of Northland rail - and what the Budget may bring.
NZX-listed PoT owns 50 per cent of Northport. The other half is owned by Marsden Maritime.
PoT chief executive Mark Cairns says Northland is very poorly served by both rail and road.
He says a well-functioning rail system is essential for PoT and Northport and with a Zero Carbon Bill progressing through Parliament the need assumes greater importance if the proposed new legislation's emissions' targets proposed are to be achieved.
PoT had invested $267 million of its own funds in rail connections since 2010.
"If we didn't have rail in Tauranga there'd be another 60,000 tonnes of carbon added (per year) in truck journeys in and out of the port," says Cairns.
"We couldn't survive without rail. We need decent investment in it to handle export growth."
Listed global logistics and freight company Mainfreight is also a big user of KiwiRail.
But all freight heading north from its Auckland headquarters goes by road because the rail service is not fit for purpose.
"We are a big supporter of KiwiRail, we want to see it believed in and funded appropriately," says managing director Don Braid.
While rail must prove its case commercially, it should be an integral part of New Zealand's transport structure and the more support it gets the better, he says.
Minister Shane Jones wouldn't comment on the Budget's contents.
Regional Economic Development Minister Shane Jones.
Asked if the PGF could contribute to the Northland rail project, he said the coalition government agreement negotiated by NZ First and Labour in 2017 stipulated the three year $3 billion PGF would contribute to provincial rail.
Jones, a list MP based in Northland's Kerikeri, says to date KiwiRail has received $262m from the fund, which still holds $1.3b.
"Obviously the figures associated with rehabilitating the northern line are not for the fainthearted. Northland farmers (have) questioned me in quite robust terms why are we not backing four lane roading as a key productivity contribution for the north?
"When you think about the adaptions New Zealand has to make in the face of climate change, there's a greater role for rail in provincial areas. I accept that the roading structure in the north needs to improve and I hope to lead a lot of that improvement, particularly from Whangarei to Marsden Point. We desperately need that improvement."
