The New Zealand Rail Plan - April 2021 - Ministry of Transport
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The New Zealand Rail Plan April 2021
Ko te pae tāwhiti, whāia kia tata
Ko te pae tata, whāia kia tīna!
Seek out the distant horizons, while holding
fast to those achievements at hand.
CONTENTS THE NEW ZEALAND RAIL PLAN 3
Contents
Rārangi take
Foreword 04
Overview of the New Zealand Rail Plan 06
Strategic context 09
1 Ko tō te rautaki horopaki
Rail contributes significant value to New Zealand 10
Why change is needed 15
Strategic priorities for rail 19
2 Ko ngā tino whāinga a te rautaki tereina
Part A 20
Establishing a new long-term planning and funding framework
under the Land Transport Management Act 2003
Part B 24
Investment priorities for rail
Strategic Investment Priority: Investing in the national rail 25
network to restore rail freight and provide a platform for
future investments for growth
Strategic Investment Priority: Investing in metropolitan rail 32
to support growth and productivity in our largest cities
Supporting regional development and connectivity 41
Measuring the benefits of investment 45
3 Me pēhea te whakawāriu i ngā painga huhua noa
Next steps 47
4 E whai ake nei
4 THE NEW ZEALAND RAIL PLAN FOREWORD
Foreword
Kupu whakataki
The New Zealand Rail Plan outlines the Government’s vision
and investment priorities for rail, and the significant changes
needed to strengthen rail in our transport system.
Our long-term vision is for New Zealand’s rail By 2052, freight tonnage in New Zealand
network to provide modern transit systems is expected to increase by more than
in our largest cities, and to enable increasing 40 percent and we would like to see the rail
volumes of freight to be moved by rail. network play a role in supporting this growth.
Enabling alternative transport options for
However, the national rail network has suffered
people and freight is a key part of providing
from under-investment and significant parts
a multi-modal transport system. Increasing
of the rail freight network have been facing a
the use of lower-emission transport options,
state of managed decline. Over the next
including rail, is an important step in the
decade, we need to invest in restoring a
Government’s response to the climate
resilient and reliable rail network. This will
emergency. Supporting increased use of rail
provide a platform for further investment to
will be a part of the changes needed for
support growth in rail freight.
transport to meet the draft emissions
budgets proposed by the Climate Change In Auckland and Wellington, we have seen
Commission. This will help to achieve the the benefits of investment into the
Government’s objective of net zero metropolitan rail networks, with pre-COVID
emissions by 2050. By moving more people passenger numbers continuing to grow
and freight onto rail, our roads will also be beyond projections. Over the next decade,
less congested and safer. the Auckland and Wellington metro rail
networks will continue to play a significant
The effects of the COVID-19 pandemic have
role in supporting growth in our largest
been felt by all parts of society, including the
cities. In Auckland, the City Rail Link will
transport system. COVID-19 has shown the
transform the rail network, significantly
essential role our transport system plays in
improving rapid transit, which will support
supporting people, businesses, and our
mode-shift from private cars to the public
economy. Our transport system will play an
transport network.
important role in our economic recovery,
providing jobs, industry development and While COVID-19 restrictions drastically
economic stimulus. With this in mind, we impacted passenger numbers, both
have confirmed that the investment metropolitan rail services have seen demand
priorities outlined in the Rail Plan remain start to recover as passengers return to
appropriate in the current context. public transport services as alert level
restrictions are lifted. This will mean some
short-term changes to public transport
FOREWORD THE NEW ZEALAND RAIL PLAN 5
Hon Grant Robertson Hon Michael Wood Hon David Clark
Minister of Finance Minister of Transport Minister for State Owned
Enterprises
forecasts, but over the longer term we expect Although we have already committed COVID-19. The Government’s regional
passenger numbers will continue to grow, significant funding to rail, it is clear that investments have contributed funding to rail
and public transport will continue to play a funding alone will not be sufficient to achieve projects that provide lead investments to
significant role in our largest cities. We the outcomes we want to see, particularly in support growth and jobs in New Zealand’s
remain committed to completing the rail freight. While the passenger networks regions.
significant investments we are making in the are already supported through the NLTF, the
We know there are significant ambitions for
metropolitan rail networks in Auckland and rail freight network has continued to suffer
rail in the transport system. This came
Wellington, before we consider the next wave from under-investment and short-term
through clearly in the public feedback we
of investment. decision-making. We are implementing a
received on the draft Rail Plan. We share
new approach to planning and funding the
We were also pleased to launch the new those ambitions for rail; however, we need to
national rail network on a much more
Te Huia service, which began regular first focus investment on achieving a resilient
sustainable, long-term basis.
services on 6 April. We remain committed to and reliable network.
considering the potential for further The Rail Plan is a key part of this new
To see true growth, particularly in rail freight,
strategic investments in the Hamilton to approach. It outlines our priorities for
is a long-term journey, which will require
Auckland rail corridor. investing in rail over the next decade. We
investment beyond our immediate priorities.
have also made amendments to the Land
We also acknowledge the tourism and Our investment priorities for the next decade
Transport Management Act 2003, which will
heritage rail sectors which run on our national will provide a platform for future investment
improve integrated planning and investment
rail network. These businesses have been as the rail network gets the maintenance,
decisions across road and rail. By making
hit particularly hard by COVID-19, like the renewal and asset replacement that is
these legislative changes, we have been able
rest of New Zealand’s tourism industry. critically needed.
to incorporate rail network funding into the
In less than three years, we have committed Government Policy Statement on land Investment now will benefit those who use
over $5 billion to rail. This includes a record transport 2021 (GPS), and allow KiwiRail to be the rail network; and will provide the platform
level of funding in Budget 2020, with over funded directly via the NLTF for the first time. for KiwiRail to grow as a commercial
$1.2 billion being invested in the rail system. business. It also acknowledges the broader
We will continue to contribute Crown funding
Budget 2020 also included initial funding for public benefits that rail contributes to our
to rail, both via the NLTF for the rail network,
the National Land Transport Fund (NLTF) to transport system and our economy.
and directly to KiwiRail for its commercial
support implementation of our new long-term
assets. We will also be establishing track user This is a significant programme of change
planning and funding regime for the national
charges to ensure rail users contribute to the for rail and the land transport system.
rail network.
NLTF. The Rail Plan will guide investment Rail is a long-term asset, and changes now
Funding has also been provided through the decision-making for rail through the NLTF and will positively influence the future of our
NZ Upgrade Programme and, more recently, future Budget rounds as we consider Crown transport system and the wellbeing of all
for ‘shovel-ready’ infrastructure projects funding. New Zealanders.
through the COVID-19 response and recovery
We remain committed to regional economic
fund. These investments are important for
development and the role that rail can play
our infrastructure and construction
in our regions. This is more important than
industries, ensuring a significant pipeline of
ever as our regions feel the effects of
work is in place to keep our industries going.
6 THE NEW ZEALAND RAIL PLAN OVERVIEW
Overview of the
New Zealand Rail Plan
This is the first New Zealand Our strategic priorities for rail are in This Rail Plan is a key component of the
two parts: new planning and funding framework for
Rail Plan (the Rail Plan). It rail. In the past, investment in rail has been
∂ Part A: Establishing a new long-term
outlines our long-term planning and funding framework under the
made on a year-by-year basis. This is not
commitment to rail and sufficient when making investments in
Land Transport Management Act 2003
long-life infrastructure assets such as rail.
the significant investment ∂ Part B: Investment priorities for a
The Rail Plan sets out our intentions for the
resilient and reliable rail network
needed to achieve a resilient, - Investing in the national rail network
investment needed to achieve a resilient,
reliable and safe rail network, over the
reliable and safe rail network. to restore rail freight and provide a
next decade.
platform for future investments
for growth In order to better integrate long-term
- Investing in the metropolitan rail planning of road and rail investments, we
network to support growth and have made changes to the Land Transport
productivity in our largest cities. Management Act 2003 (the LTMA 2003).
The investment priorities outlined in the
Alongside these strategic investment
Rail Plan will inform decision-making for
priorities, we have also made investments
rail investment from the National Land
in rail in regional New Zealand to support
Transport Fund (NLTF) under the
jobs and regional development. Further
Government Policy Statement on land
Crown funding has also been committed
transport 2021 (GPS), as well as future
to rail in the NZ Upgrade Programme and
Crown investment decisions. The GPS sets
Budget 2020.
expectations that investment in rail will
The Rail Plan is a product of the Future of align with the Rail Plan.
Rail Review (the review). The review is a
The Rail Plan does not provide a definitive
significant programme of work led by the
list of investments for rail over the next
Ministry of Transport, working alongside
decade, nor does it provide a funding
KiwiRail, Waka Kotahi NZ Transport Agency
commitment for any of the projects
(Waka Kotahi) and the Treasury. It has also
outlined (except where a project has
had input from Greater Wellington
already been funded). However, it does
Regional Council, Auckland Council and
send a strong signal of this Government’s
Auckland Transport.
commitment to rail, and the investments
The review found that significant parts of we expect will be considered over the
the national rail network have been facing next decade.
managed decline and that significant
The Auckland Transport Alignment Project
investment would be needed to restore
(ATAP) and the Wellington Regional Rail
the rail network as an important first step.
Plan have provided the basis of the
The review also recognised that
investments outlined for the metropolitan
investment alone would not enable rail to
rail networks. We expect to update and
play its part in the transport system, nor
refresh this plan alongside the GPS in
would it meet the Government’s
future years. This will enable us to reflect
expectations of a more multi-modal
changes in investment priorities for rail.
transport system. Alongside remedial
As this is our first Rail Plan, we expect it
investment, a new long-term integrated
to evolve and develop over time.
planning and funding framework for rail
would be required.
OVERVIEW THE NEW ZEALAND RAIL PLAN 7
The Rail Plan has four sections: Feedback on the draft Rail Plan for rail and the changes being made to
the LTMA 2003. These were outside of
We released the draft Rail Plan in
1 Section 1: Strategic context – this
December 2019, followed by the
the scope of the Rail Plan, as they related
outlines the contribution of rail to to legislative changes proposed through
release of the draft GPS in March 2020.
our transport system and broader the Land Transport (Rail) Legislation Act
The draft GPS included, for the first
outcomes, the Future of Rail 2020, which was being considered at
time, NLTF funding for the rail freight
Review, and why changes are that time by the Transport and
network. Public feedback was sought
required to our current system Infrastructure Select Committee. The
on both draft documents from 19
Land Transport (Rail) Legislation Act
Section 2: Strategic priorities for March to 11 May 2020.
2 rail – this outlines the new
2020 has since been passed, making the
Due to the COVID-19 Alert Level 3 and 4 changes needed to enable the new
planning and funding framework measures in place at that time, face-to- planning and funding framework for the
for rail and the investment face engagement on the two policy rail network. Work is now well underway
required to achieve a resilient and documents was not possible. Instead, to implement the legislative changes,
reliable rail network, as well as audio presentations were made available with work progressing on developing the
future investment opportunities on the Ministry of Transport’s website to first rail network investment programme
Section 3: Measuring the benefits explain the two documents. Despite the (RNIP) required under the new
3 of investment – this outlines the disruption of COVID-19, both documents legislation. The intention is to have
approach for measuring the received a significant response from the RNIP in place by mid-2021.
performance of the rail system, to submitters. The draft Rail Plan received
While we acknowledge the significant
ensure it is achieving the Transport over 1,100 submissions from a range
ambitions for rail in New Zealand, we
Outcomes of stakeholder groups (including over
believe the current investment
900 submissions from members of
priorities are an important first step for
4 Section 4: Next steps – this Generation Zero).
the rail network. The Rail Plan outlines
provides an overview of how the
The majority of submitters supported the strategic investments we need to
Rail Plan will be implemented,
the intent of the Rail Plan and the make over the next 10 years to restore
including the new planning and
investments the Government has made a resilient and reliable rail network.
funding framework.
in rail. However, submitters also felt This will provide a stable platform to
The Rail Plan and the new planning and that a greater level of ambition was consider further investments for
funding framework apply to the heavy rail required for investment in the rail growth in the future. These priorities
network in New Zealand – both the freight system, including in rail freight, need to be invested in first, before
and passenger rail networks. increasing inter-regional connections more significant transformational
and in existing and new metropolitan changes are made.
rail networks.
We also acknowledge that there is
There were a range of comments from potential for further work on other
submitters about the overall structure regulatory issues that submitters
of the rail system and how access to raised, including network access,
the network is provided. There were priorities and use. This is something
also clear views that there needed we will need to consider in the future.
to be acknowledgement and
We would like to thank all those who
consideration of all users of the
submitted on the draft Rail Plan. This
network, including the heritage sector.
feedback has helped inform the final
There were a range of comments about Rail Plan and will continue to inform
the new planning and funding framework further work.
8 THE NEW ZEALAND RAIL PLAN SECTION 1: STRATEGIC CONTEXT
1 2 3 4 SECTION 1: STRATEGIC CONTEXT THE NEW ZEALAND RAIL PLAN 9 Section 1 Strategic context Ko tō te rautaki horopaki Rail is an integral part of the transport system in New Zealand Rail enables access and mobility, transporting This section outlines the contribution the people and goods to where they need to go, current rail network makes to New Zealand supporting productivity and business growth, and why change is required to support the reducing emissions, congestion and road Government’s vision for rail. deaths, and strengthening social and cultural connections between communities. It is a key part of a multi-modal transport system for both freight and passengers in New Zealand.
10 THE NEW ZEALAND RAIL PLAN SECTION 1: STRATEGIC CONTEXT
Rail contributes
significant value to
New Zealand
Rail has a long and proud history in The following types of traffic use the rail network:
∂ import-export freight to and from major ports
New Zealand, stretching back over 150 years. ∂ domestic freight between major cities
Today, the national rail network consists of ∂ bulk commodities for processing or export, such as logs
3,700 km of track covering 18,000 hectares and coal
∂ passengers on the Auckland and Wellington metropolitan
of land, crossing more than 1,300 bridges and networks, including inter-regional rail services
including almost 100 tunnels. The network ∂ freight and passengers across the Cook Strait
∂ tourism and heritage operators.
links most major cities, ports and freight hubs
and connects the North and South Islands Rail plays a key part in New Zealand’s freight supply chain system
and supports distribution of goods between key transport nodes.
through the Cook Strait ferries. It also makes It is well suited to support mass transit of people in urban areas,
a significant contribution to the public and provides rapid transit links as part of our public transport
transport systems in Auckland and Wellington. networks in dense urban environments.
KiwiRail is the owner of the national rail network and provides
freight and tourist passenger services, as well as the Interislander
ferries, and manages a significant property portfolio.
KiwiRail also operates the inter-regional passenger service between
Wellington and Palmerston North, and began operating the new
Te Huia service between Hamilton and Auckland on 6 April 2021.
Auckland Transport (AT) and Greater Wellington Regional Council
(GWRC) are responsible for planning and funding their
metropolitan rail services. They own the passenger rolling stock
and related infrastructure required to support passenger
operations (i.e. station buildings and maintenance depots), and
are responsible for procuring the operator of passenger services.
Transdev Wellington and Transdev Auckland are contracted to
provide passenger rail services in these cities.
There are a number of heritage and tourist rail operators that offer
unique excursions on the national rail network, providing tourism
and regional benefits. The Federation of Rail Organisations of
New Zealand (FRONZ) represents the interests of member
operators in New Zealand. This sector, like the rest of the tourism
industry, has been significantly impacted by COVID-19.1 2 3 4 SECTION 1: STRATEGIC CONTEXT THE NEW ZEALAND RAIL PLAN 11
KiwiRail has 4,000 staff operating in
more than 50 towns and cities across
the country; it is a significant employer
in New Zealand
Otiria
Whangarei
The national rail network Dargaville Waiotira
Wellsford
The bold lines show the major network rail routes, the regular lines
North Auckland Line
show the minor network routes, and dotted lines show mothballed Helensville
AUCKLAND
Westfield
(disused) routes. There are also busy metropolitan networks in
Mission Bush Pukekohe
Auckland and Wellington used by commuter and freight trains.
Tauranga
Rotowaro Mount Maunganui
North Island Main Trunk Hamilton East Coast Main Trunk
Te Awamutu Kawerau
Te Kuiti Kinleith
Murupara
Kinleith Branch Line
Gisborne
New Plymouth Taumarunui
Wairoa
Stratford National Park
Kapuni Karioi
Whareroa
Napier
Hastings
Marton – New Plymouth Line Whanganui
Marton Waipukurau
Palmerston North –
Palmerston North Oringi
Pahiatua Gisborne Line
Waikanae
Masterton
Wairarapa Line
WELLINGTON
Picton
Spring Creek
Ngakawau
Lake
Westport Grassmere
Stillwater – Ngakawau Line Reefton
Rapahoe Ikamatua
Greymouth Kaikoura
Hokitika Otira
Main North Line
Midland Line
Rolleston Lyttelton
Ashburton
CHRISTCHURCH
Main South Line Temuka
Timaru
Oamaru
Palmerston
Taieri Port Chalmers
Ohai Gore Dunedin
Wairio
Balclutha
Edendale
Bluff
Invercargill12 THE NEW ZEALAND RAIL PLAN SECTION 1: STRATEGIC CONTEXT
Rail delivers positive Environmental sustainability ∂ Investment in rail safety enhancements,
including level crossing improvements
social, economic and ∂ Moving more people and products by rail and automatic train protection, is
will help the transport system play its part
environmental benefits in reducing carbon emissions, supporting
expected to further reduce the risk of
deaths and serious injuries on our rail
the Government’s objectives to reduce network.
Rail has an important role to play in greenhouse gas emissions overall. ∂ Higher levels of physical activity are
the New Zealand transport system and ∂ On average, every tonne of freight associated with public transport use
contributes to the overall wellbeing of all moved by rail produces at least than with trips by private vehicles,
New Zealanders. Rail has a role to play in 70 percent less carbon emissions supporting healthier travel patterns.
contributing to the following outcomes.1 compared with heavy road freight.2
∂ The electrified commuter rail networks
in Auckland and Wellington also deliver “In 2016, two or three trains a
emissions savings from the efficient week were moving containers to
mass movement of people and avoided and from Midland to the Port. Now,
car trips. KiwiRail operates up to 16 return
∂ Even greater environmental benefits can services a week from Midland. Not
be achieved through further investment only is this taking at least 120
in rail, for example, new modern rolling trucks off the road each day, it is
stock and ferries, and further ensuring that containers are moved
electrification of the rail network. to and from the Port efficiently
without traffic delays and at lowest
cost to customers. A number of
Healthy and safe people containers moving through Midland
∂ The wellbeing of every New Zealander is Port never touch the road, making
at the heart of this Government’s vision, Midland Port a key part of reducing
and healthy and safe people is a critical our customers’ carbon emissions
outcome for the transport system. and providing a sustainable
∂ Increased use of rail transport for logistics solution.”
passengers and freight will support the
Simon Munt, Marketing Manager,
Government’s Road to Zero Strategy and
Lyttelton Port Company
aid in reducing road deaths by lowering
the number of trucks on the road and by
individuals choosing to use public
transport as opposed to driving.
∂ In its 2020 study, EY has estimated that
rail eliminates around 280 safety
incidents per year by reducing the
volume of heavy traffic on the road.3
1
T hese five outcome areas are based on the Transport Outcomes Framework, which identifies what Government is seeking to achieve through the transport system.
This framework is available on the Ministry of Transport’s website via the following link: https://www.transport.govt.nz/
2
Ministry of Transport (2019), Real-world fuel economy of heavy trucks, Transport Knowledge Conference 2019
(available on the Ministry of Transport’s website www.transport.govt.nz).
3
The Value of Rail in New Zealand 2020, EY for the Ministry of Transport.1 2 3 4 SECTION 1: STRATEGIC CONTEXT THE NEW ZEALAND RAIL PLAN 13
$ 1.7 – $2.1 BILLION
RAIL CONTRIBUTES BETWEEN
$1.7 AND $2.1 BILLION PER
YEAR IN BENEFITS
Economic prosperity ∂ Rail makes a significant contribution to Inclusive access
the functioning of our biggest cities with
∂ Rail enables the efficient movement of the metropolitan rail networks in ∂ Metropolitan passenger trains play an
large volumes of goods. It connects our Auckland and Wellington. Despite the important role in providing people with
ports and regions, allowing goods to get to impact of COVID lockdowns, there were access to places for learning, earning,
international markets. This contributes to still around 28 million passenger trips in and participating in society. Rail is one
both national economic productivity and financial year 2020.7 of the most efficient and sustainable
regional economic growth, supporting ∂ Congestion in cities, particularly forms of mass transit. Over the last
people, businesses, producers and Auckland, constrains national decade there has been significant
tourism. productivity, reduces people’s access investment to support patronage growth
∂ The freight task in New Zealand has been to job markets, and affects people’s in Auckland and Wellington. We expect
growing steadily. The Ministry of health and quality of life. Moving more this growth to continue.
Transport’s freight model has forecast people and goods by rail will help us to ∂ Rail networks shape cities, encouraging
that freight tonnage in New Zealand will manage congestion across the urban intensification along rail corridors
increase by almost 40 percent by transport system and mitigate these and around passenger rail stations.
2052/53 from that in 2017/18.4 This will problems. In particular, in Auckland and ∂ Better long-term planning of rail will
impact all transport modes. Wellington, where passenger rail support more integrated land-use and
∂ At present the national rail freight provides an alternative to car journeys transport planning.
network is facing managed decline in for commuters.
many areas, making it difficult for it to ∂ In financial year 2020, more than
support forecasted growth in the freight 710,000 passengers and 243,000 cars Resilience and security
task. Investment in a resilient and reliable were carried across Cook Strait on the ∂ Rail supports resilience in the transport
rail network is the first step to restore the Interislander ferries. The Interislander network and can provide an alternative
rail network. It provides a platform for ferries also carried close to 1.3 million transport option for both goods and
future investment to support freight lane metres of trucks, over 90,000 more passengers in emergency situations.
growth and will enable KiwiRail to grow than the previous year, and close to ∂ This was highlighted following the
commercially in the long-run. 540,000 lane metres of rail freight, Kaikōura earthquake, where the rail line
∂ Rail hauled 3.5 billion tonne kilometres of including road bridging.8 was re-opened before State Highway 1
goods in 2017/18, 11.5 percent of the ∂ The rail sector provides thousands of and was able to transport supplies
total freight task.5 In recent years rail’s jobs across New Zealand and is expected needed to reinstate the road.
mode share has been impacted by the to grow with further investments into ∂ The Cook Strait ferries also provide a
Kaikōura earthquake, and a reduction in rail. KiwiRail alone employs around 4,000 vital lifeline connection for the
coal traffic. people, and engages with a range of transportation of people and goods
∂ In certain sectors, rail’s contribution is businesses, subcontractors and rail between the North and South Islands.
higher. KiwiRail hauls 25 percent of all operators, which employ many more. The Crown contribution in Budget 2019
exports, playing a significant role in the ∂ COVID-19 has impacted on both the and 2020 to replacing the two ageing
movement of dairy products, meat, pulp freight and passenger transport networks Interislander ferries will ensure this
and paper exports, coal and logs.6 in New Zealand; it has also had impacts critical connection is improved.
on employment. While we have seen
signs of recovery for both passenger As part of the new planning and funding
transport and freight, we do not yet know framework for the rail network, we will be
the long-term impacts of COVID-19 and monitoring and measuring the benefits of
how it will affect our existing forecasts. our investments in line with these
Tourist and heritage rail continues to face outcomes. This is discussed further in
significant challenges. Section 3.
4
inistry of Transport freight model.
M
5
Ministry of Transport freight model.
6
KiwiRail Integrated Annual Report 2020.
7
KiwiRail Integrated Annual Report 2020, with data from Auckland Transport and Greater Wellington Regional Council.
8
KiwiRail Integrated Annual Report 2020.14 THE NEW ZEALAND RAIL PLAN SECTION 1: STRATEGIC CONTEXT
In the 2020 Value of Rail Report, EY has quantified the non-
monetary societal benefits of rail. This study has looked at the
benefits generated by rail, including reduced congestion (in
Auckland and Wellington), lower emissions and improved air quality,
fewer road accidents, fuel savings and less road damage from
heavy vehicles. The value of these benefits is estimated to range
between $1.7 billion and $2.1 billion per annum.9
$1.7B-
value of rail is: $2.1B
EVERY YEAR
Value derived Reduced
Reduced Improved
Reduced emissions & Fuel
from congestion improved
road road safety
savings
maintenance outcomes
air quality
costs
9
T he Value of Rail in New Zealand, EY report for the Ministry of Transport (2020). This report provides context for the contribution of the entire rail system in avoiding road
transport externalities from a national perspective. The study itself cannot be used for specific investment decisions on rail. The 2020 report updates the 2016 Value of Rail,
EY report.
2246_Kiwirail_Brochure_26Nov_PRESS.indd 5 26/11/17 11:01 PM1 2 3 4 SECTION 1: STRATEGIC CONTEXT THE NEW ZEALAND RAIL PLAN 15
Why change is needed
The railway system in Late 1800s to 1982 Today KiwiRail operates as a State-Owned
Enterprise.
New Zealand has faced a Rail in New Zealand was mostly
controlled by the central KiwiRail has been unable to fully fund the
number of long-term government under the Railways level of investment needed to sustain the
challenges Department full national rail freight network. Many core
operational assets are at the end of their
The Government is committed to ensuring
economic lives and need to be replaced,
rail plays an integral part in the transport 82 1982 such as the Interislander ferries, rolling
system. A resilient, reliable and safe rail
New Zealand Railways stock and maintenance depots.
network is the first step towards achieving
the transport and wider outcomes for Corporation created as statutory Operational restrictions, increased failure
New Zealand. It provides a platform for corporation from Railways rates across the network and unplanned
further investment for growth in the future. Department disruptions limit rail’s contribution to the
transport network. The full potential for
It is also an important first step for
commercial growth in freight and logistics
KiwiRail to grow as a commercial business 93 1993 propositions has not been able to be
and to help build the rail industry and
The rail network was sold realised. Despite these challenges, the
upskill its workforce.
for $328 million to a joint commercial disciplines and focus of
The realisation of these benefits has New Zealand-US private KiwiRail have been important to support
been hampered by a lack of long-term consortium, led by efficiency in asset management, and to
sustainable investment in rail, and New Zealand merchant bank drive commercial returns from the
inadequate planning and funding Fay Richwhite provision of freight, property and tourism
frameworks. While there has been past services to customers.
investment in both rail freight and
02 2002 In metropolitan areas, demand for
passenger networks, it has not been
passenger rail services pre-COVID had
consistent or sustainable. Auckland metro rail bought been increasing. Previous investment in
This has resulted in a backlog of deferred back by the Government for rail in Auckland and Wellington has
maintenance and renewals, with $81 million successfully delivered the intended
significant parts of the national rail outcomes, and patronage has continued to
network facing a state of managed decline. grow. Investment in the metropolitan rail
04 2004 networks is now moving on to the next
Toll takes over TranzRail, selling phase of expansion, as well as addressing
The history of the railway in the track infrastructure back to remaining legacy issues, and ensuring the
existing Auckland network is resilient.
New Zealand has also the Government for $1
created challenges
Over the last 40 years, rail has experienced
08 2008
a series of changes, which has affected its The Government buys Toll's rail
ability to provide services to support and ferry assets for $690 million,
growing freight and passenger demands. and reintegrates the business
Rail has changed ownership models from with the rail network infrastructure
Government to private and back again.16 THE NEW ZEALAND RAIL PLAN SECTION 1: STRATEGIC CONTEXT
The Future of Rail The review recommended that the rail
network investment should be planned and
Review considered the funded under the LTMA 2003. This change
challenges faced by rail provides for a longer-term approach to
planning and funding the rail network. Over
The Future of Rail Review (the review) time, this will improve complementary and
considered these challenges and trade-off investment decisions between
recommended significant changes to the transport modes.
way we plan, fund and invest in rail.
Section 2 outlines the new planning
The review recognised that our current and funding framework for rail, and
planning and funding framework for the the investment priorities for a remedial
rail network: investment programme over the next
10 years.
∂ involves short-term funding decisions,
which are inadequate for long-lived assets
∂ isolates road and rail infrastructure
decisions from each other, which makes
it difficult to deliver a coordinated land
transport investment programme.
To realise the wide-ranging and long-term
benefits of rail, the review recognised that
there needed to be remedial investment,
and that this investment should be
accompanied by a substantial change to
rail network planning and funding.1 2 3 4 SECTION 1: STRATEGIC CONTEXT THE NEW ZEALAND RAIL PLAN 17
18 THE NEW ZEALAND RAIL PLAN SECTION 2: STRATEGIC PRIORITIES FOR RAIL
1 2 3 4 SECTION 2: STRATEGIC PRIORITIES FOR RAIL THE NEW ZEALAND RAIL PLAN 19
Section 2
Strategic priorities for rail
Ko ngā tino whāinga a te
rautaki tereina
The Government is committed to seeing rail Our strategic priorities are in two parts:
play its part in a multi-modal transport
system. Our first priority for rail is to achieve a Part A:
resilient and reliable rail network that also ∂ Establishing a new long-term planning
improves safety. Over the next decade, this and funding framework under the Land
investment will take the network out of a state Transport Management Act 2003
of managed decline and provide a stable
platform for future investments for growth. It Part B:
will also support employment and economic ∂ Strategic investment priorities
recovery from COVID-19. for a resilient and reliable rail network:
- Investing in the national rail network to
restore rail freight, and provide a platform
for future investments for growth
- Investing in the metropolitan rail
networks to support growth and
productivity in our largest cities.
We have also made lead investments in
rail in regional New Zealand to support jobs
and economic development. The COVID-19
response and recovery fund has also provided
funding to selected ‘shovel-ready’ projects.
This section details each of these
strategic priorities.20 THE NEW ZEALAND RAIL PLAN
Part A
Establishing a new long-term
planning and funding framework
under the Land Transport
Management Act 2003 (LTMA 2003)
We have changed The new approach sees rail network investment Integrated and long-term
decisions taken under the LTMA 2003. This will
the way we plan result in the national rail network being planned planning
and fund rail in and funded on a sustainable long-term basis, Integrated long-term planning and funding of
New Zealand by alongside the rest of the land transport road and rail investments will:
system, including the road and public transport
moving from a networks. The changes to the LTMA 2003 have ∂ improve the transparency of Government
short-term to a been given effect by the Land Transport (Rail) investment decisions on the land transport
Legislation Act 2020. network
long-term focus ∂ see investments being made on a more mode-
The following sections outline how the new neutral basis, for example, road and rail
planning and funding framework will work, projects will be assessed on a similar national
including the roles and responsibilities of key benefits basis
organisations involved. ∂ facilitate a medium to long-term approach
towards investment in rail, consistent with
other land transport networks, reflecting
that rail investment provides benefits long
into the future.
This approach provides greater certainty for
KiwiRail, local government and other rail
participants to enable long-term planning and
investment in rail. It should also enable
increased customer confidence to support
increased volumes on rail in the long-run,
providing commercial and wider benefits.1 2 3 4 SECTION 2: STRATEGIC PRIORITIES FOR RAIL THE NEW ZEALAND RAIL PLAN 21
This approach provides greater
certainty for KiwiRail, local
government and other rail
participants to enable long-term
planning and investment in rail.
Agencies with rail responsibilities The New Zealand Rail Plan
The new planning and funding framework requires the Ministry of The Rail Plan is a non-statutory planning document that sets
Transport, Waka Kotahi NZ Transport Agency (Waka Kotahi), out the Government’s strategic direction for rail and priorities
KiwiRail, Auckland Council, Auckland Transport and Greater for investment over the next 10 years. The Rail Plan will guide
Wellington Regional Council to work together to plan and fund investment in the overall rail system, including via NLTF and
New Zealand’s rail network. This includes working with other Crown funding decisions.
councils who have responsibility for inter-regional rail services. The Rail Plan will guide rail investment decisions taken under the
Planning, operating and maintaining the rail network, and Government Policy Statement on land transport 2021 (GPS), which
providing the associated freight, tourism and property services the Minister of Transport issues under the LTMA 2003. The GPS is
remain the core business and responsibility of KiwiRail. an important strategic document that governs investments made
from the NLTF. The GPS sets expectations that investment in rail
Auckland Transport and Greater Wellington Regional Council will will align with the Rail Plan.
continue to be responsible for planning and operating
metropolitan passenger services in their regions.
A new funding model for the rail network
The Ministry of Transport will continue to provide strategic policy
Under the new framework enabled by the Land Transport (Rail)
advice to the Minister of Transport on rail. This role includes
Legislation Act 2020, rail network funding will be channelled through
developing the New Zealand Rail Plan (this document) on behalf
the NLTF, with funding coming from NLTF revenue, track users and
of the Minister. The Ministry will also play an important role in
the Crown. This will support rail to be funded on a similar basis to
coordinating the implementation of the Future of Rail Review,
other land transport modes. This funding will be primarily spent on a
including the new planning and funding framework.
programme of continuous maintenance and renewal of the rail
Waka Kotahi will be responsible for advising the Minister of freight network, as outlined in the GPS. If there is funding available,
Transport on the Rail Network Investment Programme (RNIP) and additional improvement projects can also be considered where they
its funding from the National Land Transport Fund (NLTF). Waka align with the strategic priorities of the Rail Plan and GPS, and an
Kotahi will also monitor rail activities funded from the NLTF and investment case is demonstrated.
will continue to be the rail safety regulator. The Treasury will
The RNIP will outline the rail network activities or combinations of
continue to monitor KiwiRail as a State-Owned Enterprise.
activities that will be partially, or fully funded by the NLTF, directly to
The following sections describe the key components of the KiwiRail. KiwiRail is responsible for preparing the RNIP.
new framework.22 THE NEW ZEALAND RAIL PLAN SECTION 2: STRATEGIC PRIORITIES FOR RAIL
Further work is underway to establish track This is particularly important while the Auckland and Wellington
user charges to ensure KiwiRail and other Government is making significant Crown
track users contribute to the cost of the rail investments in KiwiRail to enable Auckland Transport and the Greater
network in a fair and transparent way.10 intergenerational replacement of key Wellington Regional Council are major
We are carefully considering track user assets, such as locomotives and ferries, users of the rail networks in Auckland and
charges in light of the impacts of COVID-19 which support a resilient and reliable Wellington, operating extensive urban
on rail operators and markets. freight network. passenger rail services, and as owners
of rolling stock and station assets. It is
KiwiRail’s commercial freight and tourism Waka Kotahi is responsible for advising the essential that investments in the rail
services and ferries will continue to be Minister of Transport on whether the network take into account the needs of
funded as they are now, from commercial proposed RNIP, and the activities under it, these urban passenger rail services, as well
revenue and financing, and Crown contributes to the purpose of the LTMA as freight and inter-regional passenger
investment. 2003, is consistent with the GPS and takes services that also use the networks.
into account relevant regional land To recognise the need for coordinated rail
Auckland and Wellington passenger trains
transport plans. planning in these regions, regional rail
and services will also continue to be
supported by a number of funding sources, Waka Kotahi also advises on how the RNIP network activities will go through their
including passenger and council aligns with the strategic investment regional land transport planning processes,
contributions, and funding for public priorities in the Rail Plan and how the RNIP before they are included in the RNIP.
transport from the NLTF. The Rail Plan, fits with other transport investments in the KiwiRail is working with Auckland Transport,
alongside the GPS, will also guide these National Land Transport Programme that Auckland Council and Greater Wellington
investment decisions. affect the rail system. Regional Council to agree a programme of
The Crown may also invest for specific Waka Kotahi is responsible for monitoring proposed rail network investment to be
outcomes and purchase those directly rail activities and how the RNIP delivers land included in their Regional Land Transport
from KiwiRail or other providers; for transport outcomes. This is discussed Plans (RLTPs). This will create a formal
example, investing to support regional further in Section 3. Annual reporting to the opportunity for the Auckland and
economic development outcomes, or as Minister will be required on these matters. Wellington Regional Transport Committees
the owner of KiwiRail. to publicly consult on the proposed rail
Funding for continuous programmes, such activities alongside other regional
as renewals and maintenance, is intended transport priorities, before the RNIP is
Rail Network Investment to be approved at the same time as the finalised. The rail activities are included
Programme RNIP. Assessment of this programme will in the RLTPs for coordinated planning
include consideration of key documents, purposes. KiwiRail has joined these
KiwiRail is developing a three-year
including KiwiRail’s Asset Management Plan. Committees as a non-voting member.
investment programme for the rail
network.11 The Rail Network Investment Any significant improvement projects in the This approach to rail investment in the
Programme (RNIP) also includes a plan RNIP will go through an appropriate Auckland and Wellington regions will support
of the significant rail activities expected business case process and be assessed by the development of a better-integrated
in the next RNIP, and a 10-year forecast. Waka Kotahi as they become ready to regional view of transport investments in
The investment priorities signalled in the progress. these metropolitan areas, considering
Rail Plan and GPS guide development of passenger, freight, and inter-regional
the RNIP. These processes will help to ensure value for
money as Waka Kotahi provides advice on needs. It is important that the metropolitan
The Minister of Transport is responsible for the effectiveness and efficiency of the networks are planned and funded in a
approving the RNIP, in consultation with activities for funding. manner that considers all demands on
Shareholding Ministers. This allows the network.
Ministers to take a strategic view of rail The new legislation allows the Auckland
investment to ensure it achieves the and Wellington planning approach to be
Government’s goal to restore the rail extended to other regions in future, on a
network, so it is resilient, reliable and safe. case-by-case basis.
The following diagram outlines the new
planning and funding framework.
10
We recognise that there are existing track access arrangements in place in Auckland and Wellington.
11
Rail network activities refers to what is commonly referred to as “below rail”, such as track, overhead power supply, signals and platforms.1 2 3 4 SECTION 2: STRATEGIC PRIORITIES FOR RAIL THE NEW ZEALAND RAIL PLAN 23
New planning and funding framework for rail
Government Policy Statement on land transport (GPS)
Land Transport Management Act 2003
∂ Government’s strategic direction for land transport investment over the next
10 years, including allocating the National Land Transport Fund to different
types of land transport investments
∂ Sets expectations that investment in rail will align with the NZ Rail Plan through
the land transport planning and funding framework
∂ Issued by the Minister of Transport
New Zealand
Rail Plan Rail Network Investment Programme (RNIP)
Non-statutory Established under Land Transport (Rail) Legislation Act 2020,
which amended the Land Transport Management Act 2003
∂ Government’s vision and investment priorities ∂ KiwiRail’s investment programme for the rail network. Identifies rail activities
for rail over the next decade and beyond for full funding or partial funding from the NLTF
∂ Guides investment decision-making for ∂ Prepared by KiwiRail every three years, and approved by the Minister of Transport
rail in New Zealand after considering Waka Kotahi’s advice
∂ Issued by the Minister for State Owned ∂ Includes national rail network and metro network proposals for Auckland
Enterprises, the Minister of Finance, and Wellington
the Minister of Transport and the
Minister for Regional
Development
Regional Land Transport Plans (RLTP)
Land Transport Management Act 2003
∂ Regional Transport Committees develop RLTPs. RLTPs set out the proposed
land transport activities for the relevant regions
∂ Prepared by the Regional Transport Committees
∂ To support coordination of metro rail investment:
- Significant metro RNIP activities will be included in RLTPs in Auckland
and Wellington
- KiwiRail will join the Regional Transport Committees in Auckland and
Wellington as a non-voting member
Implementing the new planning The Ministry of Transport is working
and funding framework collaboratively with all agencies to support
implementation of the new planning and
The changes to the planning and funding funding framework.
framework are significant and will take
until mid-2021 to implement. It requires a By mid-2021, the new regime will be fully
significant commitment from all parties implemented, in line with the next National
involved in rail activity, particularly from Land Transport Programme.
the Ministry of Transport, KiwiRail, Waka
Kotahi, the Treasury, Auckland Council,
Auckland Transport and Greater Wellington
Regional Council.24 THE NEW ZEALAND RAIL PLAN
Part B
Investment priorities for rail
The new planning and The Government’s rail investment priorities ∂ support growth in the regions by
centre on restoring a resilient, reliable and completing rail investments committed
funding framework will safe rail network for New Zealand over the by the Crown including COVID-19
support significant next decade. This means first focussing response projects
investment in rail over the our investment on restoring our existing ∂ ensure that safety is enhanced
rail network. This will provide a platform for throughout the freight and passenger
next decade and beyond growth in the future. networks, and health and safety
obligations continue to be met.
This investment approach is vital to
support customer needs in freight and These priorities will guide investment
passenger markets, and to enable considered through the new planning and
continued growth in rail. funding framework, and the development
of the RNIP.
Our Strategic Investment Priorities
for restoring a resilient and reliable In addition, the NLTF provides investment
network are: in some inter-regional services,
specifically the Capital Connection from
∂ Investing in the national rail network
Wellington to Palmerston North, and the
to restore rail freight and provide
Te Huia service from Hamilton to Auckland.
a platform for future investments
for growth The following section provides further
∂ Investing in the metropolitan rail detail on our investment priorities to
networks to support growth and restore a resilient and reliable rail network,
productivity in our largest cities. and potential future opportunities.
This will drive a balanced programme to:
∂ restore resilience and reliability to core
rail freight assets as a foundation for
future investment to support growth in
the level of freight being carried on the
national network, and to enable
KiwiRail’s commercial growth
∂ support current and future growth in
Auckland and Wellington metropolitan
rail networks by first completing the
programme of rail investments
committed through the Auckland
Transport Alignment Project (ATAP),
NZ Upgrade Programme and the NLTF
transitional rail funding, and then
considering the next tranche of projects1 2 3 4 SECTION 2: STRATEGIC PRIORITIES FOR RAIL THE NEW ZEALAND RAIL PLAN 25
Strategic Investment Priority
Investing in the national rail network to restore
rail freight and provide a platform for future
investments for growth
Rail is an integral part of freight supply We need to invest to provide a resilient and reliable rail freight
network that supports current services. This investment will provide
chains in New Zealand and has potential a platform for future investment to support growth in rail freight.
to play a greater role This will take time given the state of the current network and
significant investment is required over the next decade, and beyond.
Rail is an essential part of New Zealand’s freight supply chain
In the long-run, shifting freight off the roads and onto rail will have
and helps ensure resilience by providing an alternative transport
significant safety, congestion and environmental benefits. In terms
option for distributors and exporters.
of environmental benefits, on average every tonne of freight moved
By 2052, freight tonnage in New Zealand is expected to increase by rail delivers at least a 70 percent reduction in carbon emissions
by almost 40 percent (from about 280 million tonnes in 2017/18, compared with heavy road freight.16
to nearly 400 million tonnes by 2052/53)12 and we would like
to see rail support this growth.
Rail plays a major role transporting New Zealand’s exports, hauling
25 percent of exports to ports.13 Rail makes a critical contribution
to particular sectors, and in particular regions of New Zealand.
In 2017/18, for example, some 40 percent of dairy product export “With rail infrastructure built into
movements were hauled by rail, mostly for export. For meat, the many of our manufacturing sites
figure was slightly higher at 43 percent. In addition, 76 percent and distribution centres, shifting
of all pulp and paper exports were carried by rail, as well as freight from road to rail is an
100 percent of export coal.14 Rail also makes a significant important aspect of our strategy to
contribution in other areas, such as logs, wood panels and steel. reduce carbon emissions from
freight transport.”
Rail moves significant freight between the Port of Tauranga and
Auckland, lessening the load on the roads. In 2019, up to three Brendan Miller, GM Global Supply
million tonnes flowed between the two regions, both imports and Chain Network, Fonterra
exports.15 It also handles containers to and from all major container
ports in New Zealand (except Nelson and NorthPort), reducing the
demands on the road network and alleviating congestion. Without
significant investment, the national rail freight network will not be
well-placed to capture growing freight demand.
12
inistry of Transport freight model.
M
13
KiwiRail Integrated Annual Report 2020.
14
KiwiRail data and the National Freight Demand Study 2017/18 (September 2019).
15
Ministry of Transport, Freight Information Gathering System.
16
Ministry of Transport (2019), Real-world fuel economy of heavy trucks, Transport Knowledge Conference 2019
(available on the Ministry of Transport’s website www.transport.govt.nz).26 THE NEW ZEALAND RAIL PLAN SECTION 2: STRATEGIC PRIORITIES FOR RAIL
Case Study
Kaimai Tunnel
The Kaimai Tunnel is an example of
the benefits of past transformational
distribution economics of the North
Island, conferring regional economic 30
investment in the rail network. benefits through more efficient rail links. MORE THAN 30 FREIGHT TRAIN
Opened in 1978, and the longest tunnel It has reduced travelling times between MOVEMENTS PER DAY THROUGH
THE KAIMAI TUNNEL
in New Zealand at 8,879 metres, the Hamilton and the Port of Tauranga by
Kaimai Tunnel links the Bay of Plenty
to the Waikato, Auckland and beyond.
approximately an hour and a half, and
has enabled heavier trains, running at 5,000,000+
It is an essential component of the East greater frequencies. This is much safer OVER FIVE MILLION NET TONNES OF FREIGHT
Coast Main Trunk rail route between than putting this freight on road, and IN 2018/19
Hamilton and Tauranga, linking key avoids the use of the difficult road over
customers such as Fonterra and the the Kaimai Range. 4
Port of Tauranga, and is essential to ALMOST FOUR TIMES THE VOLUME THE OLD
Today there are more than 30 freight
support KiwiRail’s freight business. ROUTE HANDLED IN 1978
train movements per day through the
Before the tunnel opened in September Kaimai Tunnel. Freight transported
1978, the East Coast Main Trunk route, includes import/export container traffic,
which passed through the Karangahake dairy products, logs, pulp and paper, and
and Athenree Gorges, was constrained manufactured goods. The volume of
by its length, difficult grades, and freight goods has grown significantly
inadequate rail, and prohibited the use since its opening, and has now increased
of the more powerful diesel locomotives. to over five million net tonnes in
2018/19, almost four times the volume
The Kaimai Tunnel was constructed to
the old route handled in 1978.
service this increasing traffic between
Hamilton and Tauranga. The rail link has
brought significant change in the1 2 3 4 SECTION 2: STRATEGIC PRIORITIES FOR RAIL THE NEW ZEALAND RAIL PLAN 27
Investment pipeline The key priorities for investment over the next decade include:
Over the next decade, the key investment priority will be to ∂ network renewals and maintenance – investment in tracks,
restore the freight network to a resilient and reliable state. bridges, tunnels and signals across the national network to
This will enable a better service offering to freight customers, improve service levels
supporting increased volumes and providing a platform for ∂ level crossing safety improvements
KiwiRail to grow as a commercial business over time. ∂ locomotive and wagon replacement – replacing end of
life locomotives and wagons with a modern, reliable and
Investment will be required to support a longer-term sustainable efficient fleet
programme of maintenance and renewal of the national rail ∂ installation of automatic train protection for all trains operating
network. Funding will come through the NLTF under the new in metropolitan rail areas and supporting alignment between
planning and funding framework, with support from the Crown Auckland and Wellington systems
and track users. ∂ mechanical depot upgrades and renewals – improved workshop
In addition, the Crown and KiwiRail will continue to invest in a layouts, safety and productivity enhancements and seismic
programme of intergenerational replacement of locomotives, strengthening of a number of maintenance facilities, including
Interislander ferries, wagons and shunts, and modernisation of Hutt Valley, Auckland, and Christchurch
maintenance facilities reaching end of life. ∂ design and procurement of two ferries to replace the ageing
Interislander fleet and associated landside assets, enabling
greater reliability, efficiency and resilience for this vital link in
the freight supply chain between the North and South Islands
∂ core asset renewals, such as mechanical overhauls and
parts replacement for the existing fleet of locomotives and
wagons, freight handling equipment, hoists, generators,
and enabling technology.
These investments will be the core focus over the next decade.
The first tranches of funding have already been committed to
a range of these projects by the Crown, including core asset
maintenance, intergenerational asset replacement of rolling
stock and Interislander ferries. This included $1.2 billion in
Budget 2020.
Investments that relate to Auckland and Wellington are primarily
outlined in the next section about the metropolitan rail networks.You can also read
