Speech to the Australasian Rail Association Conference 2019

Thank you all for the opportunity to speak with you today and to talk about the future of rail in Aotearoa New Zealand.

The importance of rail to our coalition Government can’t be understated. All three parties that support this government have each been strong advocates for rail.

Whether it’s boosting growth in our regions, reducing carbon emissions, or getting more heavy trucks off our roads and giving people real transport options in our cities – all three parties recognise the value that rail brings.

A good example of all three parties working together was last year when our Government stepped in and stopped KiwiRail getting rid of electric locos on the main trunk line.

Because the previous government had left them in a state of managed decline, KiwiRail didn’t have much choice until we stepped in and stumped up for the refurbishment of the trains and electric control system.

Treasury’s advice was that it didn’t make financial sense to keep them running. A perfect example of how when KiwiRail was in a state of managed decline, short-term least-cost procurement had a kind of logic.

But under this government, which has an expansive vision for rail as the backbone of a sustainable 21st century transport network, that short-term decision-making makes no sense.

Given our Government’s commitment to a zero carbon economy by 2050, it’s obvious that replacing electric locomotives with diesel would be a step backwards.

Keeping the electric trains on-track is the right thing to do for the future of rail, particularly as we investigate options for further electrification of the network and the role of hydrogen-fuelled trains.

Future of Rail and Budget 19

But that hasn’t been the only investment in rail our Government has made lately.

As you know, our Government has made a significant investment as part of the Wellbeing Budget.

Funding in this year’s Budget is just the beginning of the revitalisation of rail.

Previous governments took a hands-off approach and left rail in a state of managed decline.

That’s why we instigated the Future of Rail review to make sure we are taking a long-term, joined up approach.

The results of this work will feed into our Rail Plan, which will be released later this year, and will outline the Government’s strategic vision and give a 10-year programme of indicative investments and benefits.

It will ensure rail is fully incorporated into national and regional transport planning.

Until now, rail has been an orphan standing out in the cold, cut off from the funding, planning and decision-making in the National Land Transport Programme.

We are bringing in rail in from the cold – fully integrating it alongside roads, motorways and all the transport investments so that for any transport task, decision makers can consider rail alongside all modes and invest in the most efficient and sustainable option.

That is mode neutrality.

We want to move more people and more freight by rail and grow the network where it makes sense.

That means investing in the infrastructure, the rolling stock, the hardware, and the people that will make this system work as it should.

Along with my colleagues, I am proud that Budget 2019 provides a $1 billion funding boost for rail.

This includes $375 million for KiwiRail to invest in new wagons and locomotives; $331 million for track and infrastructure upgrades; and $35 million to begin the process of replacing the current ferries, which are a crucial transport connection between the North and South Island but are nearing the end of their lives.

This funding package also includes $300 million from the Government’s Provincial Growth Fund allocated for investment in regional rail initiatives.

Contribution that rail can make to freight

All of this will help us build an efficient and sustainable supply chain for our economy.

The EY Value of Rail Report says that KiwiRail’s freight service provides significant economic value and that it is an economic enabler to the many regions it serves.

The report estimates that rail’s share of the freight task is worth over $350 million per year and our Government wants to make sure that the regions get their fair share of the opportunities.   

On top of the Budget, the Provincial Growth Fund has already given nearly $200 million to rail to create more growth in the regions.

A great example of this was last Friday when my colleagues Rt Hon Winston Peters and Hon Shane Jones re-opened the Napier-Wairoa line.

After being closed for seven years, this line has been re-opened and will be crucial for the local forestry sector.

We have to get ahead of the curve. Forestry harvests around Wairoa are predicted to quadruple in the coming years, rising from around 150,000 tonnes currently to 600,000 tonnes by 2023.

Trucks won’t be able to haul all those logs alone. Trains will be needed to get this vital export to the Port of Napier.

When the train services are fully up and running, they are expected to replace 15,000 truck journeys each year on the region’s roads, making them safer and reducing wear and tear.

This is a living example of mode neutrality. We’re not picking favourites, but are making sure that we are using the most efficient mode in each situation.

Rail in urban public transport

This applies to our cities, too.

Our policy is that one of the most urgent things we have to do in our cities is build rapid transport networks - fast, high frequency services that are the trunk architecture of the whole public transport system.

We’re taking a balanced approach and integrating public transport with roads and motorways.

Heavy rail has an important role to play.

For example, look at the City Rail Link.

A $4.4 billion investment in urban heavy rail that will carry the equivalent of 16 – one six – extra lanes of traffic in and out of Auckland CBD every day during peak hours.

It will double the number of people who live within 30 minutes' travel of the Auckland CBD and unlock urban development opportunities along the route, including high quality intensification.

In Wellington, which for many years was NZ’s public transport success story, commuter rail has been the standout performer for the last 50 years.

Every weekday, about 18,000 commuters take the train in and out of Wellington.

The number of people using the train during morning and evening peaks has increased by more than 13 per cent over the last three years and is expected to keep growing.

Our Government invested $196 million in the Wellington regional rail network.

Without this investment, the line had been expected to deteriorate with more and more disruptions to services.

While the previous government may have been ok with letting it get this bad, it was simply unacceptable to our Government and shows our commitment to public transport.

As we look to other high growth cities that want to build their rapid transit networks, like Hamilton and Canterbury, we note that their underutilised heavy rail networks link to their population centres.

There is an opportunity to grow the modern transport networks by using the existing heavy rail lines.

Light rail has an important role to play in extending our rapid transit networks.

Light rail in Auckland will be a game changer. It will extend Auckland’s rapid transit network, which is already attracting 100 million passengers per year, and it’s a core part of our plan to build a modern transport system for the city.

It will be a magnet for private investment in urban renewal and will be able to carry 11,000 commuters per hour – the equivalent of four lanes of motorway.

Of course, the great advantage of light rail transit is it versatility and ability to efficiently move large numbers of people across a built up cityscape – sometimes using road corridors that heavy rail cannot.

Rapid transit is also an important part of the Let’s Get Wellington Moving package.

While the mode is still to be decided by the business case process, there’s a chance that light rail will be the spine of a rapid transit network in our capital city.

Inter-city rail

Rail is not just important in our cities, it’s also important between cities.

A great example of this is the long-standing Capital Connection commuter service from Palmerston North to Wellington.

Our Government is committed to it, we’re funding it, and it’s had an 8 percent increase in patronage in the last year.

We’re also starting up a passenger service between Hamilton and Auckland next year.

A couple of weeks back, I toured KiwiRail’s Hutt Railway Workshops to see the new carriages being refurbished for the service.

When it begins operation next year, the service will give the growing number of people commuting between Hamilton and Auckland real choice.

Not only will this service take the stress out of commuting, but the carriages will be comfortable and equipped with Wi-Fi, toilets, and disability access which allow passengers to use the travel time productively.

Transport infrastructure, particularly rail, lies at the heart of our efforts to better manage the growth of our major urban centres.

Transport is the most powerful driver of the shape of our towns and cities. We know from painful experience that unless we invest in rapid transit, including rail, alongside roads and motorways, we condemn people to a future of gridlock.

For example, one of the major growth areas in the country for the next 50 years will be Auckland’s southern growth corridor.

The Auckland region is projected to reach 2 million by 2033, and much of that growth will be in the southern corridor.

The southern motorway is already a terrible bottleneck and the only sustainable solution is to give people and freight the choice of moving alongside the motorway corridor by rail.

We are already working on making this a reality. 

In this three year period, we are investing in a third main line, and in electrification of the track to Pukekohe.

This will mean a 30 min express service from Pukekohe to Britomart, and we’re working on plans to extend electric commuter rail to Drury, as well as Pokeno and Tuakau to support this burgeoning growth area.

We’re also investigating modern rapid rail from Auckland to Hamilton, which effectively unite the two labour markets. My hope is that when this is rolled out, commuters will be able to go from Hamilton to Auckland’s CBD in under an hour. 

With such a fast and efficient link between these two major growth areas, and Hamilton with its abundance of land for future development, this is potentially the big medium to long term fix to Auckland’s growth problems.

As part of this work, a future link to Tauranga will be looked at as well.

This could also be the first step to realising the benefits of the golden triangle - the geographical areas between Auckland, Hamilton, and Tauranga.

By 2043, 55 percent of our country’s projected population will be living in the Golden Triangle and sustainable transport links will give commuters and families’ real choice about how they get around.


But it’s not just New Zealanders who we want to be using rail.

We want overseas visitors to also enjoy our train services and spread their spending across the country. 

It was only a few years ago that KiwiRail was casting around to get someone to run the tourism business as it wasn’t considered core business or economically viable.

Our Government is giving KiwiRail the certainty and confidence to invest in its tourism services.

We made a $40 million investment in the award-winning TranzAlpine scenic train, which already is bringing 82,000 passengers into Greymouth each year and supports around 400 local jobs.

We expect that close to 120,000 passengers will be using the expanded TranzAlpine service within a decade. The many millions of dollars more those people will spend in the region is expected to support about 290 new local jobs.

When you look at the projected growth of New Zealand’s visitor numbers, it’s obvious to see why KiwiRail now sees the potential of a high end rail tourism experience.


Finally, I want to recognise an under-rated part of the Future of Rail story. We talk a lot about investing in the network assets, the track, the rolling stock, and the ferries.

But KiwiRail’s greatest asset is undoubtedly its people.

At the Hutt Workshops the other week, I met delegate Matt Cordell-Bain who told me it used to take one of their teams 101 days to overhaul a loco.

They’ve got it down to 52 days. They’ve also achieved a 45 percent reduction in workplace injuries.

The High Performance High Engagement programme led by KiwiRail and the Rail and Maritime Transport Union is founded on the simple truths that:

  1. Workers and management have a shared interest in the success of the company, and
  2. The people actually doing the work on the shop floor are a rich source of good ideas on how to improve the business

This work is an inspiration and should be a model for other firms and industry to learn from.


In conclusion, we’re determined rail will play its part as nation-building infrastructure for the 21st century.

Whether it’s building a more efficient, sustainable and resilient freight supply chain, or easing congestion and unlocking growth in our high growth cities, we’re leading.

But neither the Government nor KiwiRail can do it on our own.

The skill, foresight, innovation and commitment of rail industry professionals such as yourselves is essential to our success.

I look forward to working with you to make it happen.