Government laying down tracks for the future

  • Rt Hon Winston Peters
  • Hon Grant Robertson
  • Hon Phil Twyford
  • Hon Shane Jones
Deputy Prime Minister Finance Regional Economic Development State Owned Enterprises Transport

Investment in rail infrastructure in the Wellbeing Budget will make trains more reliable and cut down on maintenance time and costs, rail ministers announced today.

KiwiRail will kick off the process of getting more than 100 new locomotives and 900 new container wagons, replacing and repurposing old and outdated stock, as part of the Wellbeing Budget’s $1 billion investment in making sure New Zealand has a reliable and sustainable rail network.

Deputy Prime Minister Winston Peters, Finance Minister Grant Robertson, Transport Minster Phil Twyford and Associate Transport Minister Shane Jones announced more details on the boost to rail.

Winston Peters says after too many years of decline, it’s time rail got back on track.

“We’re addressing the last three decades of under-investment in our rail system, and enabling growth that will ensure rail is sustainable.

“Part of the funding package will go towards replacing the tired and worn-out 50 year old locomotives in the South Island. We’ve kick-started the replacement process for more than 100 locomotives. New locomotives mean more reliable services and less maintenance costs.

“In addition, 900 flat-top container wagons will be replaced with new, larger ones in our busiest corridors, giving KiwiRail a more competitive freight service,” Winston Peters said.

Grant Robertson said the Wellbeing Budget provides opportunities to grow and modernise New Zealand’s economy while ensuring a just transition to a low emissions future – and investing in rail is a big part of that.

“Rail has huge benefits for New Zealanders’ wellbeing, including unlocking regional economic growth, reducing emissions and congestion, and preventing deaths and injuries.

“Our Government is already helping create 40 new jobs at KiwiRail’s Hutt Workshops through our investments in rail, including the new Hamilton to Auckland commuter service,” Grant Robertson said.

Phil Twyford said our Government has a vision for rail as the backbone of a sustainable 21st century transport network.

“After the chaos for Auckland commuters last week, it’s important to reassure New Zealanders that we are investing in tracks, bridges, tunnels, signals and control systems around the country to make train services more reliable.

“But we can’t wait for the Budget every year to make sure KiwiRail has the resources to keep their services on track. We plan to integrate rail alongside roads, motorways and all transport investments so that decision-makers can consider it alongside all transport options and invest in the best option.

“Our Rail Plan, which will be released later this year, will outline the Government’s strategic vision and give a 10-year programme of indicative investments and benefits,” Phil Twyford said.

Shane Jones said on top of the Budget’s $300 million for regional rail, the Provincial Growth Fund has already given $183 million to rail to create growth in the regions.

“We’ve re-opened the Napier to Wairoa line, which will be crucial for the local forestry sector and is expected to replace 15,000 truck journeys each year on the region’s roads, making them safer and reducing wear and tear.

“Despite it only being re-opened for two weeks, it has already created 4 jobs and KiwiRail expects to recruit even more staff.

“The value of rail to the economy carrying freight alone is over $350 million per year and as champion of the regions, I’m working to make sure that the regions get their fair share of the opportunities,” Shane Jones said.

Detailed breakdown of the boost to rail from the Wellbeing Budget

$331m: over two years to help address legacy issues on the rail network and help move the rail network towards a sustainable ‘steady-state’ condition.

This will include:         

Increased investment in tracks, bridges, tunnels and signals around the country – such as continuing important work required on the Kaimai Tunnel, upgrades to the train control system, and general track renewals.

  • This is work to improve resilience and reliability of rail infrastructure through New Zealand, prioritised according to levels of risk and growth opportunities. This is fundamental if KiwiRail is to run services on time and get more freight on rail.

Investment in handling equipment (hoists and generators) mainly at Westfield/Southdown in Auckland.

  • This allows for more efficient processing of freight at the largest inland port in New Zealand. The Southdown site is a crucial link in moving freight to and from the Auckland and Tauranga Ports.

Mechanical renewals for existing rolling stock (replacing parts) and the plant and equipment required to do this.

  • Without these works our existing fleet would simply stop running. All mechanical plant, such as locos and wagons wears out with use and as it ages it becomes more susceptible to failure. KiwiRail does a mix of component replacement and total rebuild of some locos.

A new freight reservation, booking and tracking system for customer use.                                                                                 

  • This new system will create a better experience for freight customers, including real-time tracking of their goods. Currently only 16% of all freight (and 25% of exports) are moved by rail. This type of system is industry standard today and will better allow KiwiRail to compete and grow its share of the freight market.

$375m: over two years towards replacing rolling stock that is at the end of its useable life and to upgrade maintenance facilities which are no longer fit for purpose.

This will include:

Final payment on 15 new locomotives for the North Island (arrived in NZ in October 2018).

  • These locomotives are progressively being phased into use and 14 out of the 15 are now operating. These new locos are more reliable and greater numbers of locos allow KiwiRail to improve the fleet’s reliability.  

Starting to replace KiwiRail’s oldest 48 long-haul locomotives, predominantly in the South Island, 52 short-haul locomotives across the country, and a small number of electric short-haul locomotives.  

  • Over time these will be replaced with approximately 50 long-haul and 50 short-haul locos, and new electric short-haul locos.
  • The South Island locos are up to 50 years old. Replacing them with new locos, means more reliability and lower maintenance costs. 
  • For the locomotives, the specification and market engagement is estimated to take around 12 months, with a further two years for manufacturing, delivery and commissioning of the locomotives once the order is placed.
  • The first locos are expected to arrive in New Zealand in 2022-23.

Replacing 900 flat-top container wagons. These will be used in the busiest corridors, allowing the worst of the 900 existing wagons to be retired with a small portion of those being re-purposed to carry logs.

  • The busiest rail corridors these new wagons will be used on are Auckland-Tauranga, Auckland- Christchurch, and all lines serving ports (Napier, New Plymouth, Wellington, Timaru, Port Chalmers, Bluff – in addition to Auckland, Tauranga and Lyttleton). 
  • The benefit is in replacing existing wagons that could potentially fail in service. The new wagons will generally be larger and able to carry more than the existing wagons.
  • Re-purposed wagons would be used for forestry, predominantly in the North Island where harvests are expected to increase.
  • For the container wagons, KiwiRail expects to select a supplier and place an order in late 2019. Delivery of new wagons from late 2020.

Major upgrades at the key Hutt and Christchurch maintenance facilities – to improve efficiency and safety:

  • Improve workshop layouts (tracks and buildings), do seismic strengthening, improve the appearance and run them more efficiently.
  • There will also various upgrades at other KiwiRail maintenance depots all around the country. 

$35m: for KiwiRail to progress design and procurement of two rail-enabled ferries, to replace the three aging ferries currently used by Interislander. In addition to the design work KiwiRail will be investigating various options for financing the purchase of the ferries.

  • The existing three ferries are nearing their end-of-life and need to be replaced in the next few years.
  • It’s important the procurement process is thorough to ensure the ferries that are purchased meet our needs for the decades to come.
  • The Cook Strait ferry crossing is essentially an extension to State Highway 1 and the main trunk line. Each year the Interislander ferries transport about 800,000 passengers, about 2.7 million lane metres of cars and trucks and 450,000 lane metres of train wagons.

$300m: for regional rail projects through the Provincial Growth Fund

  • KiwiRail is considering a range of rail projects around the country.

KiwiRail is currently working out priorities and will be discussing options with the Government before applying to the Provincial Growth Fund.