Budget 09: Electric trains take back seat to freight

KiwiRail will be kept ticking over with a $90 million Government operating subsidy, but the Budget has offered Auckland no funding certainty for electric trains.

Previously announced extra Crown funding of $258 million towards a three-year boost of $961 million for state highways has also been confirmed. So has a reduction of $420 million in other transport spending over three years, and a $283 million increase in national fuel tax over two years from October, to help to pay for new highways including seven "roads of national significance" such as the Victoria Park motorway tunnel in Auckland.

More immediately, the Budget confirms an allocation of $142.4 million over the next year to accelerate several medium-sized roading projects including a new Kopu bridge, for which the Transport Agency expects to sign a contract for up to $47 million in July.

The rail subsidy is just what re-nationalised KiwiRail, chaired by former National Prime Minister Jim Bolger, told shareholding ministers after the election that it needed for each of the next five years to keep "non-commercial" services rolling in recognition of its strategic role in the economy.

Infrastructure Minister Bill English - despite having been a strong critic of Labour's buyback of KiwiRail - has also confirmed a previously announced loan facility of $140 million for the organisation, of which $75 million has been allocated for 20 new locomotives.

The subsidy will mainly cover freight operations, however, leaving Auckland Regional Council chairman Mike Lee and Labour lamenting a lack of provision for electric trains for urban commuters.

Although Transport Minister Steven Joyce has repeatedly assured the Herald Auckland's $1 billion rail electrification project is on track for completion in 2013, Mr Lee fears the lack of budgetary provision for new trains means they cannot be ordered for at least another year.

He said it scuttled Auckland Regional Transport Authority plans to call tenders this month for 35 four-car electric train sets from a short-list of preferred suppliers.

He feared it was a case of history repeating, after Auckland was denied rail electrification in the 1950s and the 1970s. He said many other countries were responding to the global recession by boosting their rail networks.

Mr Joyce said on Wednesday, in announcing that he was considering whether a public private partnership (PPP) could be used to buy electric trains, that he saw no reason why such an exercise should cause the project to miss a deadline which was four years away.