Source: Radio New Zealand
KiwiRail has to meet budget cuts of $200 million over the next three years. Supplied by Kiwirail
Companies sending goods up and down the country’s railways could begin to favour road transport as KiwiRail manages declining assets, an expert says.
KiwiRail is focusing on upgrades and electrification in Auckland, Hamilton and Tauranga – the so-called “golden triangle” – and other main freight lines while it manages older assets elsewhere.
The company said it was the only option that would allow it to meet budget cuts of $200 million over the next three years.
It’s preferred option to make “modest improvements” to network reliability and resilience would cost $6 to 7 billion, KiwiRail’s Rail Network Investment Programme said.
But the option it was forced to take due to budget constraints “attempts to keep all lines open but accepts there is potential for some line closures” at a cost of $4 to 5 billion, it said.
Rail, freight and public transport consultant Michael van Drogenbroek, who used to work for KiwiRail, told Nine to Noon freight lines could become less reliable.
“There’s potential risk there, if the main trunk was degraded in some way south of the golden triangle, that train speeds would have to be reduced, and therefore productivity of the rail network reduces, and customers start to move away.”
That was particularly a risk for services that needed to meet Cook Strait ferry connections, said van Drogenbroek.
But he said there was still significant investment in rail networks, and KiwiRail was taking a pragmatic approach.
“What it does mean… is a focus on areas where there is perceived to be growth,” he said.
“KiwiRail will always focus on where the bulk of the traffic is.”
That included coal on the West Coast of the South Island and interisland rail freight between Auckland and Christchurch, he said.
“Whilst it’s a focus on the golden triangle… It’s not an exclusive focus on that.”
Places south of the golden triangle still needed rail investment in the longer term, he said.
“This doesn’t take the option away to do that, but it really does defer a decision in some cases, across what the future state of the national rail network is.”
KiwiRail would not leave “key customers” in the lurch, said van Drogenbroek.
“They’re not gonna walk away from coal on the West Coast, just like they’re not gonna walk away from Fonterra, which moves a huge amount of dairy powder from the likes of Edendale in Southland to the Port of Otago.”
With a “managed declined” approach, there was a point where lines could no longer be nursed along, he said.
“If you get past a certain tipping point, it all becomes too difficult and the regulator steps in and says you have to stop trains on certain sections of line.”
But van Drogenbroek said New Zealand railways were being managed pragmatically and there was still significant investment in the network.
KiwiRail’s chief infrastructure officer Siva Sivapakkiam said the funding constraints mean prioritising lines which are most used: Auckland and Wellington metros, the golden triangle and the main trunk lines in the North and South Islands.
“We are working to save money nationally by introducing new, more cost-effective approaches to upgrade work,” he said.
“For example, we are delivering more standardised bridge designs, where most bridges previously tended to be bespoke.”
Renewals on parts of the network would be “staged and partial”, and increased inspections and day-to-day maintenance would ensure service standards were adequate, said Sivapakkiam.
Rail minister Winston Peters said the point of the Rail Network Investment Programme was to “arrest the decline in network condition through prudent renewals of assets and efficient maintenance activity”.
He said KiwiRail has been spending 61 cents in its network dollar on maintenance and renewals, which was forecast to lift to 75 cents over the coming decade.
Taking an iterative approach and dealing with renewals over years would allow the network to stay open during that work, Peters said.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
