Electric rail on track this year, Joyce promises

Transport Minister Steven Joyce is vowing to get Auckland's $1 billion rail electrification project back on track by Christmas, after yesterday announcing ownership plans for new trains.

That will follow a delay of at least six months caused by the Government's efforts to work out funding alternatives to a regional motor fuel tax it cancelled in March.

Although KiwiRail will own or hold long-term leases over rolling stock in both Auckland and Wellington, Mr Joyce said private companies would gain equal bidding rights to operate fleets for "contestable" shorter periods of possibly five or six years.

Mr Joyce said KiwiRail might end up as an urban rail operator, as well as owning the fleets, but would have to do so under a separate corporate structure to ensure equal and transparent opportunities as in a model used widely abroad, including in Australia.

That would include performance bonus components to ensure high-quality services for passengers, with the operating companies also in charge of routine mechanical maintenance.

He saw yesterday's announcement as a necessary step towards ordering up to $500 million of new electric trains for Auckland, for which the regional transport authority had planned to call international tenders in May, before learning of the fuel tax's cancellation.

"The next step will be how the trains will be procured - certainly the plan is by the end of the year [for calling tenders]," the minister said.

He expressed frustration at "inheriting" a range of unresolved issues which he did not believe would have been covered by the fuel tax, including a need for longer station platforms, and a potential conflict between freight and proposed 10-minute passenger-train frequencies.

But he said officials were making progress in resolving these, after he rejected a working party report which proposed a dramatically reduced and "mongrel" electric rail fleet.

Mr Joyce said the Ministry of Transport had since confirmed the feasibility of largely meeting a deadline of 2013 for completing the electrification project, although timing would be "tight" and it might be 2014 before the full fleet was on the tracks.

"There will be trains arriving all the way through 2013," he said.

But that failed to placate Auckland Regional Council chairman Mike Lee, who said the minister had failed to explain where he would find the money for the trains and had already missed a deadline of July set by the Cabinet for reinstating the procurement project.

"We had the money and he took it away," Mr Lee said.

"I hope he manages to nail this by the new deadline, because he failed to meet the old one," he added.

"We were promised something in July and it is now October."