Rail in New Zealand

Overview

The national rail network consists of a network of 1,067mm (3ft 6in) gauge (Cape gauge) railway lines in both the North and South Islands. National rail services are focused primarily on freight, particularly bulk and import/export freight, with limited tourism focussed passenger services on some lines.

Only Auckland and Wellington have urban rail systems, both of which are being upgraded and expanded.

KiwiRail

The national rail service in New Zealand is wholly owned by the Crown. It operates as a State Owned Enterprise named the New Zealand Railways Corporation, which trades as KiwiRail.

KiwiRail is a statutory corporation operating as a single entity with multiple business units. The key elements of the business are:

KiwiRail Freight provides rail freight services and locomotives for passenger services.

KiwiRail Interislander operates ferry passenger and freight services on the Cook Strait.

KiwiRail Passenger provides urban passenger services in Wellington. It also operates long distance passenger train Scenic Journeys provided on the Coastal Pacific, TranzAlpine, Northern Explorer and Capital Connection services.

KiwiRail Infrastructure and Engineering maintains and improves the rail network and controls the operations of trains on the network. It also services our locomotives and rolling stock at Hutt workshops and provides heavy engineering services at Hillside (Dunedin).

KiwiRail’s assets comprise:

• 4,000 kilometres of track
• 1,656 bridges
• 198 mainline locomotives
• 4,585 freight wagons
• 2 owned and 1 leased ferry
• Approximately 4,000 staff

Each week, KiwiRail's train control operations manage the movement of:

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

Two of the Interislander ferries, operated by KiwiRail, are rail capable and connect the North Island and South Island rail networks.  Visit KiwiRail's website .

Passenger trains

The KiwiRail passenger trains largely cater for tourist traffic. Visit the TranzScenic website .

KiwiRail Turnaround Plan

On 1 July 2008 the Government purchased Toll New Zealand's rail and ferry businesses. The Crown already owned the network infrastructure.  From 1 October 2008 KiwiRail became the single entity responsible for national rail services, some Cook Strait ferry services, and rail infrastructure.

In 2010 the Government agreed to contribute to the KiwiRail Turnaround Plan, which is a strategic plan which aims to help the rail freight business become self-sustaining. In the first three years of the Turnaround Plan the Government contributed $750 million, with a further $94 million in 2013/14 and $198 million in 2014/15.

KiwiRail is also contributing funding from its retained earnings to support the development of the Turnaround Plan.

In May 2013 the Minister of Transport commented that the additional investment in rail will help support the Government’s plans to improve New Zealand’s productivity and export-led economic growth. It will also increase the resilience of the transport system.

KiwiRail Operating and Financial Performance

KiwiRail increased its revenue over the first three years of the Turnaround Plan by over 25 per cent.  This was achieved in a trading climate affected by the global economic slowdown and the ongoing impact of the Christchurch earthquakes.

Rail carries approximately 15 percent of freight moved in New Zealand (measured in tonne-kilometres).

The KiwiRail freight business is based on four main components – movement of bulk commodities such as coal and fertiliser, movement of goods to and from ports, a specialised forestry business, and a domestic business which largely serves the freight-forwarding sector.

The volume of freight carried has increased over the first three years of the Turnaround Plan as shown in the following table:

Wider economic benefits from the investment in rail

The Turnaround Plan is seen to provide wider economic benefits.  Benefits include:

• Enabling the option of port aggregation to ensure New Zealand exports remain competitive
  • rail has been used to convey cargoes over longer distances to larger ports (the withdrawal of major liner services from Timaru and New Plymouth are two examples where this has happened).
• Providing alternative transport options to enable a more efficient domestic freight market
  • The freight forwarder market has continued to grow and some of the major players in the sector have invested in rail-served depots to take advantage of cost savings, capacity flexibility and rail’s “green” credentials
  • Major exporters and importers have increased the use of rail. More than 30 percent of New Zealand’s export goods travel on rail. Rail offers service flexibility to optimise shipping and port selection
• Contributing to resilience in the freight transport system
  • KiwiRail ensured the movement of cargo during the Port of Auckland strike, the Manawatu Gorge closure, and following the Christchurch earthquake.
• Providing direct economic savings
  • Direct economic savings include fuel and driver time savings compared to road, avoided road maintenance costs, and reduction in externalities such as road accidents and greenhouse gases.

KiwiRail balance sheet restructure

On 31 December 2012 KiwiRail restructured its balance sheet. KiwiRail Group’s freight, passenger, infrastructure and ferry businesses, together with rolling stock, rail infrastructure and plant and equipment were transferred from the New Zealand Railways Corporation into KiwiRail Holdings Limited.

KiwiRail Holdings Limited is a company registered under the Companies Act 1993 and included within the First Schedule of the State Owned Enterprises Act 1986.The KiwiRail Group comprises KiwiRail Holdings Limited and its subsidiaries. The KiwiRail Group has been designated as a Profit Oriented Entity.

KiwiRail Group carries assets valued at approximately $1billion, reflecting the revenue they generate, rather than the previous value of approximately $7.8 billion.

New Zealand Railways Corporation will continue to hold the 18,000 hectares of rail network land, from which no financial return will be expected. The sole purpose of New Zealand Railways Corporation is to retain the railway land and make it available for use by KiwiRail.

Heritage and Tourist Railway Industry

There is a well established heritage and tourist railway industry in New Zealand. Most of the participants in this industry are members of the Federation of Rail Organisations of New Zealand.  View the FRONZ listings of trains and trams in New ZealandVisit the FRONZ website .