Trains save NZ $1.5 billion a year - report

  • 27/11/2017

The Labour-led Government is promising to invest in rail after releasing a report it says National sat on which shows $1.5 billion of hidden benefits from rail a year.

The study by EY quantifies the savings from having fewer trucks and cars on roads, less damage to roads, not as much congestion and reducing greenhouse gas emissions.

The benefits far exceed what the taxpayer is spending on rail, KiwiRail chairman Trevor Janes says.

"These benefits do not show up on the balance sheet, but they are very real, and they make a huge contribution to New Zealand," he said.

Transport Minister Phil Twyford says the EY report was commissioned by NZTA and KiwiRail in 2016 and was sat on by the National Government because it had an ideological bias against rail.

The report says rail networks have long been thought of as monopolies with high up-front costs and significant barriers to entry.

Many expect Governments to be involved, but there is debate about how much.

The experience of KiwiRail is a live embodiment of this debate, with several operating models over the past 30 years from full public ownership to full privatisation, the report says. The current model lies towards the public ownership end of the spectrum.

KiwiRail is a state-owned enterprise which receives capital from central Government and subsidies from regional council rates and from the National Land Transport Fund.

The quantifying of the public benefit of rail will help support the rationale for continued intervention, or provide a basis for the retreat from financial support for rail, the report says.

Mr Twyford says rail has been on life support for too long.

"The Labour-led Government will restore balance to transport funding, boosting investment in rail infrastructure both for passengers and freight.

"This will include significant investment in regional rail via the Regional Development Fund, as set out in the Labour-New Zealand First coalition agreement."

The establishment of a light rail network in Auckland will significantly increase the $1.3b a year of benefits that road users, including freight companies, experience from reduced congestion, Mr Twyford said.

The report's findings

  • Rail contributes up to $1.5 billion in often unseen benefits to New Zealand each year.
  • Using rail reduces the number of deaths and injuries on our roads by a net 271 a year.
  • Reducing congestion saves $1.3 billion, the equivalent of 100,000 fewer daily car trips and taking 30,000 trucks off the road for an hour a day.
  • Reducing carbon emissions by 488,000 tonnes a year - the equivalent of taking 87,000 cars off the road, saving $8.5 million.
  • Improving safety outcomes, saving $60 million.
  • Reducing road maintenance, saving $63 million.
  • Rail is also an important and sustainable economic contributor to the regions, and links New Zealand to export markets.

KiwiRail's asset base

  • 4,000km track (of which 500km mothballed)
  • 1,656 bridges
  • 18,000ha of land managed
  • 198 mainline locomotives
  • 4,585 freight wagons
  • Two owned and one leased ferry
  • 4,200 staff

Each week, train control operations manage the movement of:

  • 900 freight trains
  • 44 inter-city passenger trains
  • 2,200 suburban passenger services in Wellington
  • 2,000 suburban passenger services in Auckland.