Ports' $5m rail project

Ports of Auckland has a $5 million plan to extend its container catchment area by running its own rail freight service between Auckland and Palmerston North.

The company has negotiated a 15-year agreement with Tranz Rail under which it will buy one train from the rail company and pay an annual fee for access to the tracks to run the service.

The service - to be operated by the Ports of Auckland's container division, Axis Intermodal - will enable export containers from the central and lower North Island to be shipped from Auckland.

Import containers unloaded in Auckland will balance the flows on the southbound return journey.

A second quarter start-up is expected and an initial target of 50,000 containers a year has been set.

"This initiative will significantly reduce the total cost of transporting export containers to world markets and for import containers destined for the lower North Island," Ports of Auckland chief executive Geoff Vazey said yesterday.

It would enable Ports of Auckland to achieve efficiencies, lower costs and increase container volumes handled at Auckland, he said.

Palmerston North would also benefit. The service would boost its role as a centre of freight and distribution for the lower North Island.