KiwiRail is increasing the range of electrification in Auckland and Wellington for metro passenger trains.
OPINION
I am often asked why I chose to return to KiwiRail for my second “term” as chief executive.
The answer is that I seized the opportunity to see a long-term vision I had since 2016 turned into reality. At that time, our goal was to recapitalise the company to give it a sustainable foundation for the future. Our assets were underperforming after many years of underinvestment. As I was leaving, the Government had agreed to allocate an injection of $8 billion-$9b in funding. Since 2018, this has allowed us to focus on a strategy with our customers to build a productive, reliable transport network to boost economic growth for New Zealand.
I’ve always been attracted to transformation leadership, and I was honoured to be asked to come back and help KiwiRail through its next phase, as it transitions from a pattern of one-two year operational planning to a longer-term “connect, build and grow” pathway.
I firmly believe that our success is aligned to Aotearoa’s success. We have a clear vision to build a customer-centric infrastructure and transport services business that delivers world-class safety performance and superior customer service for our freight, metro and Interislander customers. To help us do that, we’re investing over a billion dollars each year — currently one of the largest capital programmes in New Zealand over a five-six year period.
The investment we’ve been able to make in infrastructure and network reliability has allowed us to deliver $1.1b of improvements and upgrades to the Auckland and Wellington metros, preparing our network for major projects like the City Rail Link. This will be a game-changer for Aucklanders to help enable the development of a world-class rail network, partnering with KiwiRail and Auckland Transport to deliver faster, more frequent journey times for passengers, reducing future maintenance needs and allowing passenger networks to operate at increased efficiency. “Readiness” work for Auckland and Wellington metro modernisation includes Auckland’s Rail Network Rebuild (RNR) and the Wellington Metro Upgrade Programme (WMUP) — upgrading the existing network and building capacity to support faster, more frequent trains. $2.1b of New Zealand Upgrade Programme funding has enabled the Pukekohe to Papakura Electrification, Wiri to Quay Park and the Third Main Line projects, as well as three new stations around Drury in Auckland.
We’ve also partnered with Auckland Transport to set out a 30-year vision for Auckland — the Strategic Rail Programme. This includes station upgrades and separating passenger and freight rail lines, which will cut travel time in half from the south to the CBD. It proposes a cross-town link from east to west, allowing freight to bypass the inner city and providing additional passenger routes.
In addition to the urban infrastructure, we’re investing $2.4b in the national rail network to improve reliability and to complete repairs from recent weather events. We are also working through the modernisation programme of our 30+ year aged Interislander fleet to deliver a safe and resilient supply chain and tourism service across Cook Strait.
Another element of our “connect, build and grow” strategy is to be a leader in decarbonisation, realising the contribution KiwiRail can make within the land transport system.
Both rail and road operators can work together by electrifying transport fleets and growing road and rail systems, reducing carbon emissions and congestion for commuters.
We’re already increasing the range of electrification in Auckland and Wellington for metro passenger trains and we have plans to electrify the Golden Triangle (Hamilton, Tauranga, Auckland), which could significantly increase electric freight movements to 50 per cent (now only 5 per cent).
Port of Auckland
Our recent Port of Auckland Value of Rail Study shows the huge scope that can be achieved by moving more containers from Port of Auckland to our inland freight hub at Southdown.
All port volumes are measured in Twenty-foot Equivalent Units (TEUs), giving a steady measure across containers and different weights within them. Our inland port at Southdown has the capacity to hold 400,000 TEUs, so effectively we’re the third largest port. By integrating our land and train movements, plus wagon capacity, we can help free up a lot more land at Port of Auckland and help improve productivity.
Moving containers by rail from Auckland’s port is a winner for Aucklanders and New Zealanders. Today, the 80,000 TEU of containers we currently shift delivers $106 of value per container. This is in the form of reduced congestion, reduced emissions, reduced truck movements and increased safety. We move 20 per cent of Auckland’s import containers. With our current fleet, we could double the number of container movements on rail per year, with significant economic and productivity benefits for Auckland.
Another example of where we deliver economic growth is our partnership with the Ruakura Inland Port. We’ve invested capital to ensure this is rail-enabled — globally we are seeing rail companies invest and partner with inland freight hubs to drive intermodal container growth. Here, the market has changed so cargo owners can achieve economic benefits through the aggregation of containers at inland ports. With rail providing one-way network pricing in collaboration with shipping companies, we’re able to deliver significant scale for cargo owners through inland ports.
In partnership with Ruakura Inland Port, Port of Tauranga and Nexus Logistics, we were able to provide a rail solution for Kmart, which is moving 9000 containers a year through Port of Auckland on rail to Ruakura, where it has a significant distribution centre. This project shows increased connectivity of our infrastructure to benefit cargo owners and consumers, helping to decarbonise land transport across the country.
A key point here is that we’re in a transition to a new phase. It will be two-three years before we have the complete platform of increased capacity, but we are moving fast to get ready for the transition of assets into service for our customers. I’m excited to be back for this once-in-a-generation opportunity to transform a business into a growth phase, which we know will support not just the success of KiwiRail and our customers, but the success of New Zealand.
OPINION: Tensions are likely to become more evident next year.