Yesterday Kiwirail released their annual results and once again they lost a significant amount of money – $167 million for the year. The shortfall obviously has to come from the Government. They were also keen to point out that the main reason for the loss was the cost of maintaining the rail network which includes 4,000 kilometres of track, 1500 bridges and 150 tunnels.
As sure as night follows day the truck lobby were quick to complain about Kiwirail getting government support.
The argument put forward by KiwiRail won little sympathy from the main trucking lobby group.
Ken Shirley of the Road Transport Forum accused KiwiRail of seeking special treatment, and he said the company should stand on its own feet.
“No business can say that they can only conduct themselves if they have an input from the taxpayer,” Mr Shirley said.
“They have to look at their whole pricing methods, they have to look at their management of their assets and they have to organise their business.”
That’s quite a bit rich coming from the trucking industry which is heavily subsidised by tax and ratepayers. But just how much support do they get. Below is some information from the NZTA and Ministry of Transport on his.
The three year National Land Transport Programme identifies where funding comes from and where it is spent. It predicts that over the 2015-18 period of the current NLTF over $2.7 billion in funding for transport will come from local council rates which goes towards paying their share of non-state highway projects. These are of course the roads that most trucks need to use on their journeys to get to the doors of their customers
Then we have the National Land Transport Fund – the place where fuel excise duty (FED), road user charges (RUC) and vehicle registration fees go. As the graphic shows road user charges – of which the largest contributor will likely be trucks – are expected to contribute about $4.3 billion in funding while other road users contribute $5.5 billion. Lastly there are other sources of funding which go towards projects such as the government’s regional State Highway programme which is funding a number of projects directly from general taxes.
The Ministry of Transport also have information on who pays for what and where it goes. Helpfully it also breaks RUC by heavy and light vehicles (less than 3.5 tonnes). It shows that heavy vehicles make up about 4% of the NZ vehicle fleet but pay about 26% of the taxes raised. The reason for this disparity is that heavy vehicles cause significantly more road wear.
As the charts below show taxes from Heavy RUC pay for about 23% of State Highways and 25% of local roads.
With those numbers in mind let’s turn attention to one of the biggest projects coming down the pipe – The East-West Link. As we know a near motorway quality road is proposed along the northern side of the Mangere Inlet. Auckland Transport and the NZTA say the early indicative costs are $1 billion however I believe they’re now pushing up around $1.5 billion. The reason this project is getting so much attention is primarily due to the strong lobbying from the Truck and Business lobbies. They argue that the new almost-motorway is needed to free up truck movements making it quick and easier for them to operate.
Given the truck lobby are so adamant Kiwirail shouldn’t get any help from the government and the East-West Link is primarily being built to improve freight movements I look forward to the announcement that the trucking companies are paying the full cost of this new mega road.
Of course we know not all trucking companies share the view that Kiwirail shouldn’t get any help. Mainfreight has long been a supporter of having a stronger of rail network. Richard Prebble – the former leader of the ACT party and a person with an infamous history in the history of rail in NZ – has called for it to have more investment. That is in part from him seeing the value in it as a director of Mainfreight.
Just to be clear I’m not saying we should go and start charging truckies for all projects but surely it’s about time they dropped the “we’re not subsidised” act.
One positive to come out of all of this news about Kiwirail is it appears the government are coming around to the idea of having the NZTA manage the freight network
State-owned KiwiRail is pressing the NZ Transport Authority to take over funding the national railway network and believes it has Transport Minister Simon Bridges onside in a way not true of his predecessors, Gerry Brownlee and Steven Joyce.
In comments at KiwiRail’s annual public meeting, chairman John Spencer and chief executive Peter Reidy highlighted the inclusion of a new top priority in the NZTA 2015-2019 statement of corporate intent to “integrate road and rail to improve freight network productivity” as a sign the government is coming round to the need for an integrated approach to road and rail network investment.
This is positive to hear as it’s a position that seems to be almost unanimous across a broad spectrum.
A presentation by Kiwirail (from page 41) to the Auckland Council Infrastructure Committee provides some interesting insight into the future of the Auckland Rail Network. Unfortunately the council don’t record the infrastructure committee and put it on online so we can’t see exactly what was said by the CEO of Kiwirail but the presentation which has been uploaded to the council website does give an indication.
For the most of the presentation the slides appear to be a fairly typical business presentation talking about how they’re performing and supposedly changing their business to be more customer centric. The most interesting parts are the last four slides which highlight that there’s a lot more to do to improve the rail network than just the City Rail Link. The first of these is below and gives an indication of what needs to be addressed.
Auckland strategic issues & opportunities
- 23% pa Metro Growth
- Freight growth into Auckland
- Port of Tauranga
- Ports of Auckland
- Network Resilience
- Funding Shortfalls – DART perception/reality
- Integrated land transport planning (AT/NZTA/KR)
The remaining slides show how the network needs to be operating within the next year or two, how it will need to be working in the future and finally how an indication of specific pieces of work needed to realise the vision along with some cost indications.
For the short term it appears the need is to get the Western Line up to 10 minute frequencies, improve network performance and get more freight trains through South Auckland. On the latter point it the image suggests at least two freight trains an hour in each direction at peaks south of Otahuhu.
Moving forward to the future and by 2041 you can see a lot more trains will be on the network thanks to the City Rail Link. At peak times there would be 18 trains an hour on the Western Line in the peak direction plus 12 an hour on both the Southern and Eastern lines. There are also more trains on the Onehunga Line and more freight trains along with higher performance requirements. In a way this highlights one of the biggest benefits of the CRL, it allows us to get a lot more use out of our existing rail corridor. I personally remain disappointed they don’t plan on increasing frequencies past Henderson and I still feel like AT are trying to complicate the future train plan too much, especially with the Henderson to Otahuhu trains.
The most interesting slide – to me at least – is the last one showing a whole range of projects needed to get the network up to spec. It suggests that prior to the CRL opening around $400 million is needed not including level crossings or the Onehunga line which will be for some of the items on the list here plus I suspect a lot of catch up maintenance that still hasn’t happened yet. As you can see some of the urgent items include:
- More cross overs,
- more signals
- Infill balises (transmits the signals to the train)
- Getting freight trains using the new signalling system
- Level crossing closures
- 3rd main between Westfield and Wiri
Some of the more interesting items I can see include:
- What appears to be three different options for getting 6 car trains to Onehunga – extending the current platform, reconfiguring the station or a new platform at Neilson St.
- Changes to the eastern end of Britomart – getting more trains through Quay Park perhaps
- Extending the third main all the way to Pukekohe.
- A new Mt Smart station – this seems odd giving the close proximity to Penrose.
- Shifting the long distance services back to the Strand – surely this will not be good for the usage of them.
- Different options for reconfiguring Henderson station.
- A grade separated Westfield Interchange
- An upgrade to the junction at Newmarket
To me the considerable amount of work still needed to get the rail network up to speed is reflection of the level of neglect the network suffered from for decades.
Interestingly I suspect related to all of this, a week ago Auckland Transport posted this on their tender website although it has now disappeared.
This RFI sets out to identify a company or individuals who will be able to best provide AT with rail infrastructure design and constructability knowledge, for on-going commissions on the Auckland rail network.
Auckland Transport requires a Rail / Track geometrics, signalling and overhead line design and rail constructability consultant with at least 20 years experience in the provision of design and constructability services within a live operating environment. New Zealand experience is preferred with an intimate knowledge of the Auckland network an advantage. Experience working with KiwiRail is necessary.
This capability will be drawn upon on a regular basis to provide design and constructability services for modifications to the Auckland rail network such as:
- New stations and Park & Rides
- Grade separations
- Modifications to stations
- Level crossing upgrades
- Additional stabling facilities
- Additional mainlines for freight
- Extensions to electrification
- Signalling Modifications
- Track realignments
As you can see there’s a lot more than just the CRL to do to the Rail network.
I and I’m sure many others were surprised the other day to see such a good opinion piece on why we should invest in rail from Richard Prebble – especially given his history with rail. It was in response to the news last week that Treasury recommended closing the rail network down the freight network. He highlights well a few new points in the debate.
1. There is a significant difference between theory and reality when it comes to the ability to build new roads
The cost is huge. The OECD says the annual cost of traffic congestion in Auckland is $1.25 billion. An incomprehensible figure but most Aucklanders can put the cost into personal terms. The cost to me is that today to be sure of getting to a meeting on time I have to drive up to Auckland the night before.
What will happen to our roads if the freight that now goes by rail has to travel by road? The treasury says that is not a problem. Road freight pays Road User Charges that meets the full cost of roads. If road freight volumes increase then treasury says that will automatically fund new roads.
While the math is correct the answer is wrong.
It is not a question of money. Road funding is allocated on a cost benefit/ratio. But it has proved impossible to get planning approval for new motorways in the cities. Even if we reform the Resource Management Act, something that needs to be done, it will still not enable new motorways. The public is opposed to new inner city motorways.
He’s not quite right when he says that road funding is allocated on a cost benefit ratio as we know the RoNS have sucked a lot of money away from higher value projects. He’s also not quite correct on the cost of congestion and nor was the OECD, the report they pulled the figure from specifically highlighted the issues with the methodology that produced that result and notes a more realistic figure is ~$250 million. However none of this distracts from the point that it’s (rightfully) almost impossible to build new motorways in the city.
2. The rail network has spare capacity (outside of Auckland)
We need new thinking. Let us think of the motorways as corridors. If we cannot get new road corridors into our cities is there any other corridor? Yes, the rail. Is it possible to increase our use of the rail corridor? Yes.
The only transport corridor that has spare capacity is the railway. Warren Buffett has explained his huge investment in railroads, in just these terms. Railroads he says have the only corridors with spare capacity. The railway network goes where the freight needs to travel.
Looked at this way, Kiwi Rail, is not “unsustainable” but a national asset. Kiwi Rail owns corridors to all our ports and connects all our cities and most towns. We set up systems and then they blind us to the obvious.
3. That we need a more holistic approach to transport rather than marginalising rail because of some arbitrary way it’s been set up.
The State Owned Enterprise Act that requires Kiwi Rail to be a profitable enterprise and the Road User Charges that makes our roads user pay has resulted in officials thinking in boxes. As one of the architects of the present system I think I am allowed to say it is not perfect. To solve road congestion we need a more holistic approach.
If there is no other way to reduce traffic congestion why not spend a fraction of the road taxes on rail?
He also adds that spending money on rail doesn’t mean we allow Kiwirail to waste it on things that aren’t needed – something Treasury noted wasn’t happening.
I am sure the Government is right to ask Kiwi Rail to make savings. As owners we are entitled to ask the management and staff to be making continuous productivity improvements. But it is unrealistic to expect Kiwi Rail to make a profit and pay for the full cost of the track.
4. He comes up with one of the same solutions we’ve suggested, allowing the NZTA to fund rail infrastructure. It’s an idea that seems to be gaining growing agreement from a wide cross section of political and economic viewpoints.
Parliament needs to give the NZ Transport Agency the responsibility for also funding the rail network. As we know the cost of congestion the agency can calculate a cost/benefit ratio for funding the rail track to reduce congestion. It has to be at least $100 million a year.
Today rail has the capacity to carry twice as much freight. We motorists would notice the difference. With more investment Kiwi Rail could speed up delivery times and attract even more freight from the road.
5. Lastly and perhaps most interestingly is that he says all of this as a director of the trucking company Mainfreight.
I need to declare my interest. I am a Mainfreight director and shareholder. Mainfreight has reduced the number of trucks we put on the road by making more use of rail.
Right now Auckland needs a third freight track into the city. Mayor Brown’s rapid urban passenger trains run on the same track as Kiwi Rail’s freight trains. Unless a third freight line is built then at peak times freight will be forced off rail onto to trucks. We will have spent billions of dollars to take cars off the road only to have them replaced by more trucks. It makes sense to use Road User Charges to fund the third freight line to keep rail freight off the road.
A single train can easily carry the equivalent of 50+ trucks worth of freight. The amount of capital companies like Mainfreight would need tied up in trucks to handle that plus the operational cost of the fuel and all of the drivers needed must be significant. He also makes good points about the third main between Otahuhu and Papakura which compared to most motorway projects is actually quite cheap.
Overall a very good and useful piece from Prebble.
There can occasionally be interesting bits of information found within the written questions asked of government ministers and so I keep an eye on it from time to time. Going through them the other day I stumbled across a few questions that Green MP Julie Anne Genter had recently asked about the rail network. In particular about faults in Auckland and Wellington, and about level crossing incidents in Auckland.
On faults she asked about the number of point, signal and track faults (defined as rail breaks, buckles or pull-aparts) that had occurred each month for two years for each region and the results are surprising, especially in light of the answers to similar questions in the past.
In total for Auckland there were 544 faults in the 12 months to the end of June, almost identical to the year before which saw 548 faults. This is made up of 58 points faults, 460 signal faults and 26 track faults. The previous year saw 65 points faults, 462 signal faults and 21 track faults. The number of signal faults certainly seems very high considering that in the past we’ve had the following numbers in response to similar questions (the new system was rolled out from ~2011).
- Apr 07 – Jan 08 (10 months) 144
- Feb 08 – Jan 09 (12 months) 214
- Feb 09 – Jan 10 (12 months) 172
- Apr 11 – Mar 12 (12 months) 454
While the increase might be alarming at first I understand it’s actually a bit of an apples and oranges type situation. As I’ve been told the faults we see now are quite different to those experienced before the new system was introduced. In the past the faults could each cause significant disruption however now I understand they are mostly very minor and the result of what’s known as a dropped track – something that can be fixed remotely and with very little delay for trains.
What is good news is that points faults have reduced dramatically. The 58 over the last year compares very favourably with the old results below that were were around 4-5 times as high.
In Wellington the numbers for the most recent year were 80 points faults, 383 signal faults and 11 track faults with the year to June 2014 seeing 81 points faults, 554 signal faults and 27 track faults. As Wellington has a different signalling system I’m not sure if the same processes and impacts around faults apply.
Here’s a table showing all the numbers provided
As mentioned there was also information on level crossings. The data provided covers a 13 month period from 1 June 2014 to 30 June 2015.
7901 (2015). Julie Anne Genter to the Minister of Transport (30 Jun 2015): How many level crossing incidents, if any, have been reported by Auckland drivers per month from June 2014-2015, and at which crossings did these occur?
Hon Simon Bridges (Minister of Transport) replied: I am advised that there were 117 level crossing incidents reported to KiwiRail between 1st June 2014 and 30th June 2015 within the Auckland area (Pukekohe to Helensville); these records are only for designated crossings and do not include incidents involving trespassing. The definition of incident is in accordance with the Railways Act 2005 and National Rail System Standard 5: Occurrence Management. The list of crossings is attached
From what I can tell National Rail System Standard 5: Occurrence Management refers to collisions and near collisions. Below is the data provided where I’ve added totals for each crossing and colour coded it to highlight those with the highest number of incidents. As you can see the worst three crossings are
- Woodward Rd (this seems to be incorrectly labelled as a pedestrian crossing)
- Manuroa Rd
- Morningside Dr
The only crossings we know that are definitely planned to be removed are Sarawia St within the next 1-2 years and Normanby Rd and Porters Rd as part of the CRL.
As an aside, Simon Bridges and his office are clearly much more on to it in answering questions – his predecessors would often be weeks late before answering.
Yesterday the Treasury released documents related to the government’s budget announced a few months ago. One that has gained a lot of attention is the suggestion from Treasury that the rail network – with exception of Auckland and Wellington – be shut down. The paper can be found here and contains quite a bit of information – although a lot of the actual details such as how much funding Kiwirail want in the future are not shown.
The current New Zealand rail network
The paper discusses how Kiwirail have undertook a nine month study into its operations last year and the key findings were
- rail’s high fixed costs are spread across the network and do not materially vary with changes in volumes being transported
- revenue earned from train movements on most parts of the network is interdependent with other parts of the network because most freight movements travel across multiple network segments, and
- as a result of the high fixed costs and interdependence of revenue between the different network segments, it is challenging to reduce costs as fast or to the same extent as a reduction in revenue.
In other words this isn’t just a case where you can trim off a few dead limbs and carry on but that those limbs all combine to contribute to the overall network. For example trains carrying milk powder from Taranaki also use and contribute towards the busy Hamilton to Tauranga section on their way to the port. Just like has happened in the past here and overseas in places like the UK, cutting back the network can do more harm than good. As such it was recommended that one of two main options be pursued.
- retain most of the freight network and rationalise unprofitable services and some lines on the fringes of the network, or
- close most or all of the freight network, with the option of retaining the upper north island section only (Auckland to Hamilton to Tauranga) as this part of the network carries the most freight volumes and covers most of its costs.
Treasury’s preferred option was to close the network and in their argument for doing so they say that over the last 5 years earnings haven’t really changed. They do however note that Kiwirail have been hit by a huge number of external factors which even they suggest the magnitude of and extent of which have been greater than the company could be expected to deal with. These include the Canterbury earthquakes, the Pike river mine explosion, Solid Energy’s financial difficulties, extreme weather events and the Aratere being out of service for a period earlier this year. What’s more the hits keep coming and now it seems the next issue will be looming trouble with the dairy industry.
One aspect the paper does highlight is that Kiwirail are really running a shoestring operation. As part of Treasury looking for ways to reduce funding they note that there is no evidence of “gold-plating” infrastructure or inflating funding requirements. They also highlight the results of an independent assessment by AECOM who say that in comparison to Australian systems, planned spending on infrastructure per kilometre was low. They also couldn’t find opportunities to reduce what was planned without significantly impacting levels of service. This doesn’t surprise me as I frequently get the impression the company is running only on fumes after being institutionally and politically beaten up.
The report claims that shutting the rail network down
During 2014, the Treasury, the Ministry of Transport and NZTA undertook an assessment of the economic and policy considerations for continuing to fund KiwiRail at the levels required. The key findings from this work were:
- if all the freight currently transported on rail was transferred to road, the additional road user charges (RUC) earned by NZTA from the additional trucks on the road would be sufficient to adequately address road capacity and safety issues (resulting from the additional trucks) in most areas
- the estimated environmental and safety benefits from transporting the current volume of freight by rail of ~$10 million and ~$20 million per annum respectively do not outweigh the costs of continuing to fund rail, and
- a national cost benefit analysis estimated the net social cost of continuing to fund rail at the levels sought in this paper at between $55 million and $170 million per annum, which takes into consideration all the costs and benefits associated with funding rail at the levels required (another interpretation is that there is a shortfall in benefits of between $55 million and $170 million per annum at the current levels of funding).
I find it interesting the claim that shifting all rail freight to truck would pay for itself and any capacity and safety upgrades. According to the MoT there are currently around 900 freight trains around the network each week which probably equates to more than 3,000 trucks worth of goods being moved each day. The trucking lobby will be rubbing their hands with glee.
Treasury wanted the government to only provide one more year of funding during which public study would be carried out before what they assume would be a closure of the network. They do say that if the government didn’t agree to that, that they should provide Kiwirail more certainty by way of a three year funding package – something the Ministry of Transport supported. Thankfully the government didn’t agree with Treasury and agreed to keep funding Kiwirail – although only on a two year package.
I personally have no issue with Treasury looking at the issue of whether we should fund something, that is after all a key part of their job. What I do have an issue with is that there doesn’t appear to be a consistency in advice. Where’s the questioning of the RoNS businesses cases – some of which are as low as 0.2, where’s the questioning about why we’re pouring so much money in to new roads when people are travelling less and the assessment of many projects showing major flaws. Then there’s the absurd notion that the rail network should be a profitable business while ignoring the road network elephant in the room. For example the NLTP announced last week shows around $3 billion of funding from outside road taxes to build and operate the network.
In my view Kiwirail should stop being treated like a business and instead the government should stop the madness of the NZTA not being able to fund rail improvements. That would allow rail projects that meet certain requirements e.g. improve safety and/or capacity to compete on a more even playing field. The NZTA should also be required to consider and allowed to build rail projects as part of any other improvements they make to get the best transport network outcome regardless of mode. They are after all the transport agency, not just the road building agency.
Auckland Transport have announced the short list of companies to run Auckland’s trains from July next year onwards and none particularly fill me with confidence.
Auckland Transport has short-listed three companies that will be invited to tender to operate passenger rail services from 1 July 2016.
They are Serco NZ, Transdev Auckland and KiwiRail.
Mark Lambert, general manager AT Metro, says tender documents will be issued to the short-listed companies soon and the new rail contract will take effect from next year, when the existing contract expires.
Mr Lambert says there was a high level of interest internationally when Auckland Transport sought Expressions of Interest and the three shortlisted companies were selected after careful evaluation.
He says that the new contract will be performance-based and reflect the huge changes in the Auckland passenger rail system since the current contract was put in place in 2003.
Auckland’s Metro rail service has been electrified and modern electric trains will soon be operating on all lines, stations have been upgraded, new stations built and the Western Line double-tracked. The number of services has significantly increased from 40,000 to 140,000 per annum since 2003. Passenger boardings have passed a record 13 million a year and are climbing at record rates, with growth of 33% in March 2015 compared to the same month last year. Annual growth for the March year was 21%.
- Serco NZ is the New Zealand arm of the British Serco PLC, an international service company working in a variety of sectors including transport, health and corrections. Internationally, Serco’s rail operations include the MerseyRail and Northern Rail operations in the UK and the Dubai Metro in the United Arab Emirates. Serco delivers services to central and local governments in New Zealand and Australia with over 9,000 staff across the region and 600 based in Auckland.
- Transdev Auckland is part of the Transdev Group, one of the world’s largest private passenger transport companies. The Group, whose head office is based in France, operate light and heavy rail services in Europe, North America, Asia and Australasia. Transdev has been operating the Auckland Metro rail services since 2003.
- New Zealand Government-owned KiwiRail owns and manages the national railway network. It operates freight and passenger rail services throughout New Zealand, including the Tranz Metro commuter rail operation in Wellington, which provides 2,200 services each week.
With Transdev and its predecessors we’ve have more than a decade of poor performance – not all of which has been their fault. Perhaps most annoying to regular customers has been the frequent poor communication when things go wrong.
Serco also operates the Mt Eden prison and if they were to win the contract I’d certainly hope they ran the rail network better they were the prison a few years ago where the failed to meet half of their performance targets.
Lastly Kiwirail who own the tracks and currently run the trains in Wellington. In reality they are a freight company and to date have shown little regard for PT or its users in Auckland.
What’s also noticeable about this announcement is that the three companies shortlisted are the same as those shortlisted for the Wellington contract with one exception. In Wellington Kiwirail have bid in joint venture with Keolis Downer.
All the companies shortlisted will almost certainly be hoping to win both the Auckland and Wellington contracts which would allow them to leverage some economies of scale across both operations. That has the potential to be good if it means services can be delivered cheaper but might have negative consequences if it limits how easy it is for other companies to compete for future tenders.
The announcement that AT is looking at Light Rail has understandably received a lot of attention – and will continue to for some time – however there is a lot of other fascinating information in the draft Regional Land Transport Plan (RLTP) that is worth covering. Like more discussion of Light Rail, I’m going to try and get this information out over a few posts starting with this one.
One area in the document that quickly caught my attention is on what works are planned/needed for the existing rail network to get it working properly prior to the CRL. Improvements are needed to increase the capacity, performance and resilience of the network. Perhaps most concerning is they say that there’s still a significant amount of track and underlying formation that has yet to be renewed by KiwiRail.
The performance of passenger rail services has improved over the past decade at the same time as service levels have increased significantly. Service punctuality (trains arriving within 5 minutes of schedule) has improved from just over 70% in 2005 to around 88% in the year to June 2014. Delays to trains caused by network infrastructure problems have dropped from an average of 1.4 minutes per train in 2005 to just over 0.4 minutes in 2014. However, further improvement in infrastructure performance will be needed if desired levels of reliability and performance are to be achieved by the opening of the CRL.
One factor in improving punctuality and reliability will be ensuring that rail infrastructure is in a fit for purpose condition. While there has been significant improvement in the condition of the Auckland network over the past decade through KiwiRail’s DART and AEP projects, including total replacement of the signalling system, there is still a significant extent of track and underlying formation which has not been renewed.
To get the network up to speed there are four programmes of work planned.
Network Performance Programme – to address existing network performance issues, including catch up renewals to address existing formation, drainage and track issues and replace sleepers.
Network Resilience Programme – to improve current network resilience to provide additional operational flexibility, ability to recover from delays and incidents, make maximum use of the existing network capacity and capability, and improve management of network maintenance and development.
Network Capacity Programme – to enable the operation of regular 10 minute peak EMU services and existing peak freight services following the completion of electrification, and to provide the base for the pattern and frequency of passenger services planned for introduction following the completion of the CRL.
Level Crossing Programme – to remove level crossings on the Auckland electrified rail network to reduce safety risk for vehicles, pedestrians, cyclists and rail users through closure or grade separation, including safety improvements at existing vehicle and pedestrian crossings.
This has set a few alarm bells off for me:
If there’s still a lot of backlogged maintenance yet to happen that means KiwiRail is likely to need a lot more network closures to get this work done. That could mean that we’re likely to continue to see parts of the rail network shut down during some long weekends and probably the Christmas/New Year period for this maintenance to occur. While AT and KiwiRail might try and minimise the impact but doing the work when the network is quietest, such shut downs will increasingly affect more and more people as patronage continues to grow.
The second concern is the suggestion that work is needed to enable 10 minute frequencies. These frequencies have already been delivered to the Southern and Eastern lines however we’ve been waiting for them for around 5 years after they were promised to happen when the New Lynn station was complete. Now admittedly this could just be me reading into the text wrong however later in the document AT say one of the benefits of the investment is to “Increase capacity to enable the operation of regular 10 minute peak passenger rail services and to cater for expected growth in both passenger and freight services“. In the meantime then until I see a Western Line timetable with 10 minute frequencies on it I will remain sceptical. What is clear is that we need to get on with building the third main between Otahuhu and Papakura.
The third key concern is that to pay for what’s planned it relies on KiwlRail getting additional funding from the government. If that funding doesn’t happen then it could put the brakes on how well and how quickly the rail network develops and improves.
There does seem to be a few issues with this table due to there being nothing in the 2015/16 year and with the negative 2018/19 to 2024/24 column. This table from near the end of the document seems to be more accurate (click to enlarge)
In addition to the KiwiRail costs there are also Auckland Transport’s projects. The basic transport programme that has been proposed doesn’t include much in this regard with the only really notable point being the need to spend $8.1 million on refurbishing some of the old Diesel trains to service Pukekohe. I suspect that’s probably more than the trains are work these days.
This just really highlights that despite all the improvements in recent times that there’s still a lot of work to do even just to get our rail network up to a decent level of quality. Will the government provide the funding that KiwiRail need to get this work done?
Ports of Auckland did a press release back in September that didn’t really get picked up on:
Working with KiwiRail, Ports of Auckland has doubled the rail services between its Waitematā seaport and Wiri Intermodal Freight Hub.
The increased service starts this week and will bring the port to the doorstep of importers and exporters in South Auckland, potentially reducing the number of trucks coming into the seaport and opening up more space to handle growing volumes.
Ports of Auckland General Manager Commercial Relationships Craig Sain said, “This is just the beginning. With our developments in Palmerston North and Wiri, we’re on our way to make more effective and increased use of rail to improve our service offering.”
“Containers moved by rail was up by 64% in 2013/14, but it is still a small percentage of the total containers coming through the port. We’d like to see this number grow over the coming years,” he said.
In 2010, with the opening of the Wiri Intermodal Freight Hub, KiwiRail ran four services of 23 wagons a week in each direction. Over time, this number increased to eight services and starting today there will be sixteen services a week.
“There is ample capacity on the line to the Port to increase services further and we will continue to work with KiwiRail to get the most out of the line,” Mr Sain said.
KiwiRail General Manager Sales – Freight Alan Piper said, “Ports of Auckland’s drive to increasingly move freight by rail to its Wiri inland port has seen a rapid increase in growth of daily services this year. This is a great example of KiwiRail working closely with its customers and provide flexible growth capacity to enable more use of rail to transport goods around the country.”
Now sixteen services a week may still not sound significant, but each train can haul about 70 twenty foot equivalent containers. Each train is at least 35 trucks off the road. Take a look at this video – it’s been sped up 4x, since the train is so long:
With freight volumes increasing though, the need for a third track on the Eastern Line (in particular between Wiri and Southdown, with an estimated capital cost of between $50m – $70m) becomes more apparent as passenger services are increasing too. Kiwirail might argue that Auckland Transport should contribute to the cost, but I’ve heard that Kiwirail charge Auckland Transport a track access fee in excess of $18m annually .
As the owner and landlord of the Auckland rail network, it would be fit the current charging model for Kiwirail to invest more in the network, and recover the costs through an increased charge in exchange for higher passenger rail frequencies. This needs to happen before the opening of the CRL if Kiwirail wants to continue to grow its freight operations. Would it be too much to ask that the Goverrnment’s contribution to the CRL be in the form of a capital injection to Kiwirail, so that not only the CRL track could be built, but the third main as well?
On the other hand, $50m – $70m is at the bottom end of NZTA’s project expenditure, so perhaps it could be included as a line item in the freight focussed East-West connection project.
Minister of Transport Gerry Brownlee, along with Economic Development Minister Steven Joyce, issued a press release on Wednesday stating there is little evidence to support the reinstatement of the Gisborne – Napier railway line:
Transport Minister Gerry Brownlee and Economic Development Minister Steven Joyce today released a study of the East Coast region’s economic potential over the next 30 years.
The East Coast Regional Economic Potential Study assesses the region’s economic performance and barriers to development, and models five economic growth scenarios along with their implications for transport infrastructure and the skills needed.
Mr Brownlee says the study shows the economic importance of maintaining and boosting the road network in the East Coast, particularly in Gisborne.
“There will be an increase in logging freight over the next decade and improved roading will be vital to support that and other industries,” Mr Brownlee says.
“The study illustrates the need to develop further capacity for heavy vehicles on State Highway 35 north of Gisborne and to maintain the quality of State Highway 2 between Gisborne and Napier, and northwest of Gisborne to the Bay of Plenty.
“I will be asking the New Zealand Transport Agency to review its plans for these highways in light of this study.”
The report also concludes there is little evidence to support the case for reinstatement of the damaged rail line from Gisborne to Napier.
“When operational, rail only accounted for 2 to 3 per cent of freight from the region and the report finds no clear evidence of a significant economic impact following its closure,” Mr Brownlee says.
To provide context, a map of the area shows the distances involved in the region:
Hawke’s Bay and Gisborne
It is a distance of 214 km from Napier to Gisborne, and it takes about 2 hrs 40 minutes to drive according to Google maps. Tolaga Bay to Gisborne is 55 km.
The study referred to in the press release comes in two parts. The first is a desk-based review of available research and analysis of economic data, which runs to 197 pages. The second is a relatively lightweight 141 page document called “Economic forecasting and transport and skills implications“. The Transport and freight section of the second document on page 33 contains an analysis of heavy commercial vehicle (HCV) use, and also talks about proposed plans to use Tolaga Bay as an inland port for Gisborne’s Eastland Port. Bear in mind that traffic counts on the state highways in the area are low, with around 3,000 veh/day or less away from the main urban areas of Gisborne and Wairoa.
Storage space at both Napier and Gisborne is an issue for logs, but it isn’t clear from the report why Tolaga Bay has been chosen as the inland port for Eastland Port, who made the decision, or why the Government has effectively chosen to subsidise Eastland port by upgrading the road to HPMV (“big truck”) standards. The last sentence looks like consultant-speak for “upgrading SH2 between Gisborne and Napier to support heavy trucks will be bloody expensive and will have ongoing high maintenance costs”.
The report states that logs currently make up 97% of export traffic through Eastland Port. There are very few imports.
The Port of Napier exports a slightly less volume of logs and timber than Eastland Port – 1.4m tonnes vs 1.9m tonnes annually. However Port of Napier imports a significant amount of fertiliser, lime and cement.
The report sets out rail freight flows between Gisborne and Napier, before the line was mothballed in 2012:
Note that 2011 rail freight volumes were less than half of the 2005.
The report goes on to make assumptions about future economic growth over the next 20 years, including oil and gas production encouraging between $11bn and $85bn worth of investment. The report does not analyse how likely either of these scenarios are.
Page 75 of the report looks at the role of the railway between Napier and Gisborne:
The report’s conclusion on rail is:
We also emphasise that, even if rail services are reinstated, the majority of freight traffic and surface passenger transport will continue to travel by road. The possible resumption of rail services does not detract from the need to improve the road network to ensure the resilience and reliability necessary for providing attractive linkages in the region and minimising the effects of distance from the neighbouring cities and the rest of the country.
Not everyone shares KiwiRail’s pessimism about the viability of the line, however. A report by BERL in December 2012 called KiwiRail’s analysis “very conservative”, and there are fundamental flaws with the way KiwiRail have determined profitable freight volumes. That report states that the cash flow neutral tonnage is only 226,000 tonnes per year. The same report also states:
The spending on the Napier to Gisborne road in the last ten years has totalled $102 million. In the last four years it averaged $14.8 million per year. If the number of trucks, and heavy trucks at that, increased by 33% to 38% because the rail line is not available for wood freight, the annual spend on the road can be expected to increase at least proportionately, namely by $4.9 million to $5.6 million per year. This indicates that it would likely be in the national interest to make the capital expenditure required on the rail rather than having to increase spending on the road, and suffer the negative externalities on the road.
In their Draft Annual Plan, the Hawke’s Bay Regional Council is proposing to invest $4.5m in the Napier Gisborne Rail Establishment Group, which estimates that $10.7 million will be needed to finance capital and operating budgets, including $5.3 million to buy rolling stock, $2.4 million for working capital and a $3 million disaster contingency reserve.
A 51 per cent shareholding from the regional council is proposed, with a contribution of about $5.46 million through to the 2018-2019 year, with investors from Hawke’s Bay and the Gisborne region holding the remaining 49 per cent interest in a holding company, which would be formed especially for the purpose.
Submissions on the HBRC Annual Plan close on Monday 12th May. You can find out more and make your own submission here.
The decision made on the East-West link a few months ago not to run a motorway through the suburbs of Mangere was a significant victory for the community. However it also made a lot of sense as the majority of the transport problems are on the northern side of the harbour. Subsequently AT have also effectively ruled out any options that involve creating a new bridge between Mt Wellington and Highbrook. My understanding is the current plan is a variation of option two and would see a new road created along the foreshore from roughly Captain Springs Rd through to Silvia Park Rd (which would be upgraded) and have direct south facing motorway links added. This is shown below with the new sections in blue and the upgraded section in red.
Overall I think this is the right outcome for the project as it does enhance connectivity while making better use of existing infrastructure (the motorway and Highbrook Dr) while also likely costing significantly less than some of the other plans originally proposed. A case of probably getting 80% of the benefits for what may be 20% of the cost.
Immediately after the decision I heard there was quite a bit of anger from the road and business lobby groups who wanted a full motorway. The press release from the Auckland Chamber of Commerce (who I believe had been shown the plans along with other business/road lobby groups) contained a little bit of that anger calling the proposal only a partial solution. Their “other key requirements” would see the road turned into a full motorway between Onehunga and Highbrook. Also notice the use of the term RoNS to try and make the project sound more important.
“Auckland needs a full solution with an efficient and safe new road between SH1 and SH20 that eliminates traffic lights and intersections for trucks, avoids community severance and has a minimal impact on the industrial zoned land in the area,” said Auckland Business Forum chairman Michael Mr Barnett
“A partial solution is not acceptable. Given the national significance to the economy of the activity in the area, funding concerns should not restrict the design, consenting and construction by NZTA in an urban RONS basket.
“We need a complete solution presented covering freight as well as cars and buses and which can be consented and built by 2021 or earlier.”
This is in line with Prime Minister John Key’s confirmation last June that resolving the transport problems in this part of Auckland will be the Government’s next major focus for the Auckland transport network.
Other key requirements include:
- At the western end – an upgraded Gloucester Park interchange with SH20 at Onehunga to eliminate heavy trucks having to enter the Onehunga retail area and local streets – Neilson, Onehunga Mall and nearby rail overbridge, Selwyn St, and Gloucester Rd;
- At the eastern end – a full road interchange with SH1 adjacent to Mt Wellington that provides efficient, safe on-off south and north facing ramps;
- Efficient connections to freight transport and distribution businesses located in the Southdown area, including along Great South Rd towards Penrose and Otahuhu;
- Supports an east-west bus service and safe cycleway that is separate from heavy road traffic.
- Protects the need to connect to AMETI and Highbrook, either as part of the project or in the future.
“To meet these requirements we suggest the best solution to date is a new road built along the northern shoreline of Manukau Harbour and which then cuts inland to link with the Southern motorway. This option avoids community severance and taking up valuable industrial land in a business growth area of Auckland that needs more land not less.”
It’s worth remembering some of the business community were also behind the suggestion of an 8-lane horror show which included over 4km of tunnels.
So Auckland Transport made the correct decision and scaled the project down to what it should have been in the first case. Case closed right? Well it appears the business/road lobby aren’t going to give up that easy. This is an email sent to a number of people last week following on from an East-West Link discussion held by the Penrose Business Association. If you read the invite you will see they are also referring to pushing the option above.
Yesterday’s PBA’s “East West Link” meeting held at Turners Car Auction was very successful and well attended by an excellent cross section of business’s located between Onehunga and Highbrook including representatives from Road Transport, AA, EMA and the Auckland Chamber of Commerce.
As we move forward from this meeting the Penrose Business Association is keen to arrange a bus trip to explain at first hand to senior politicians and officers from both central and local government as well as business the range of roading opportunities that should be considered as we work towards finding the best solution to service one of the most important economic engine rooms in New Zealand.
It is only when you have the opportunity to visit these sites that you understand the scale of the transport operation that exists within our community which is largely out of site.
The transport companies shift some 15,000 cars from the Port of Auckland to Penrose each month, 4 container trains that depart MetroPort bound for Tauranga each day (currently down to two trains because of a locomotive shortage) and its only then that you realise how important a highly efficient transport system is and if done correctly brings significant savings for all of New Zealand.
To determine the interest level for the site visit please advise by return email if you wish to join the proposed bus trip which we propose to operate within the next 5 weeks.
I guess the point is that with this project in particular we’re going to continue to see a sustained push to make it larger and larger. Although in some ways this next suggestion might fall into that basket too.
A new Inland Port
You may recall this post where I looked at the East-West link and how it seemed to be primarily benefiting the Port of Tauranga through their Metroport operation. This suggestion looks at how the East-West Link could also help the Ports of Auckland.
When looking at the land around the area on Google Maps you may have noticed a large area covered in cars. This is shown in Green in the image below and the land happens to be owned by the Ports of Auckland Ltd (POAL). This is important because as you may know POAL currently run an inland port in Wiri however I understand that site is leased from Kiwirail and is smaller than what exists at Onehunga.
On the Northern side of the harbour much of the foreshore has already been reclaimed except for one section just to the east of the POAL land. With the East-West link going through this area along the foreshore and in a fairly straight line it would leave that section in yellow that hasn’t been reclaimed as a bit of an oddity. That raises the question of whether we could make use of it. Well there might just be a decent use for that area if it was reclaimed, most likely at the same time as the road was built.
In addition to above, it would be quite useful for the rail network (in black) if we also grade separated the Westfield Junction, thus reducing one potential point of conflict on the network. At the same time as building the East-West link we could do that rail grade separation and perhaps more interestingly we could use that reclaimed section of land to provide a direct connection to POALs land (shown in Purple). That direction connection could allow POAL to shift their inland port operations to their own land, thereby reducing their operating costs and allowing them to compete better with the Port of Tauranga. Alternatively they could operate both. The new land could also provide a additional storage space in its own right.
The impact of such an idea could be quite large. With more capacity and a direct link it would allow POAL to shift a lot more freight by rail which helps reduce the number of trucks on our roads. Let me know what you think of the idea.