KEY POINTS:
While taxpayers consider the high costs of buying and maintaining a railway operation, another transport asset remains undeveloped and under-utilised.
After forking out $665 million for a rail business, taxpayers may be intrigued to know that a perfectly good national freight highway exists that costs nothing to acquire
or maintain. It is the blue or coastal highway and is freely available around the country. With a few exceptions, it links every trading and commerce centre from Whangarei in the north to Bluff in the south.
As a freight highway it is dependable and poses no threat to motorists, cyclists, pedestrians, or to the environment at large. Best of all, it requires no investment to acquire or improve and is already serviced by a network of well-equipped and self-sustaining ports.
This highway is capable of carrying unlimited amounts of freight the length and breadth of the country, and doing so far more energy efficiently than roads or railway. A tonne of freight moving on it uses just 15 per cent of the fuel consumed by a heavy truck and 60 per cent of that of a diesel locomotive over a given distance. Yet the sizeable economic and environmental benefits of this freely available highway resource have been and continue to be grossly under-utilised.
Apart from short-hop ferry services on Cook Strait and transiting overseas vessels, the coastal blue highway has just three general freight ships linking five of the country's 13 commercial ports. The other eight, including the big hub ports of Auckland and Tauranga, have no dedicated coastal shipping services and rely on land transport for domestic freight connections.
It is not hard to see why. While road and rail modes have received ongoing taxpayer support and government subsidies, the business of coastal shipping has not, and does not, receive a cent.
That may be about to change, as the value of the coastal highway to New Zealand's economic health and trade competitiveness is more recognised. At the same time as the Government is splashing out on rail, it is also considering its options to financially support and re-invigorate coastal shipping.
It recognises that to meet its stated goals for a sustainable, safe and efficient transport sector, it can no longer afford to ignore the economic, environmental and social advantages of coastal shipping. Having invested such a large stake in securing rail, however, is there room on the fiscal agenda for nurturing the revival of the industry? From a practical transport perspective, the answer must be yes.
Domestic freight volumes are set to double within 15 years and it is not credible that already congested main roads and under-resourced rail will be able to cope. Nor can New Zealand afford the huge capital investments needed to bring road and rail networks up to the required standard to handle such growth.
However, inter-regional opportunities exist for shipping and rail to complement each other and ensure increased volumes of freight can be moved over longer distances in a cost-efficient and timely manner.
But rail alone cannot do it. A much higher volume than is currently the case could be carried by an expanded fleet of coastal vessels linking regions such as Auckland, Bay of Plenty, Wellington, Canterbury and Otago.
Many of these regions have port facilities to support this expansion, but have no real incentive to encourage domestic shipping activity. Support is undoubtedly required from the Government to kick-start coastal growth and facilitate the commercial investment in ships, crews and equipment needed to make that happen.
There is no better time than now for New Zealand to make a serious investment in one of its most useful and least costly assets - the coastal blue highway.
* Rod Grout is the chief executive of Christchurch-based Pacifica Shipping.