Red Alert

Investment in rail

Posted by Chris Hipkins on March 14th, 2010

Last week I posted about the current woes of our rail network, noting that under private ownership there had been a lack of investment in upgrading and maintaining the trains and tracks. In hindsight perhaps the then Labour government should have bought back the whole lot in 2003, not just the tracks, and now we’d be 5 years further ahead than we are. I’m not sure that was even an option back then, but regardless of the history, looking to the future it’s clear a big investment is needed if rail is going to be a viable transport option in New Zealand.

It’s interesting to note that the New Zealand government are one of the few around the world who haven’t included investment in rail as part of their economic stimulus package in response to the global recession. In the US they’re spending $17.7 billion on ‘transit and rail’ to reduce traffic congestion and petrol use. Italy are spending 960 million euro in rail and another 480 million euro in local public transport. Korea are spending KRW 11 trillion on ‘green transport’. The Aussies are spending 1.2 billion on rail, the Canadians 480 million and France 300 million. The list could go on…

Here in New Zealand Steven Joyce is obsessed with roads as if they are the only viable form of transport. Roads are convenient, and for a lot of passenger trips they are the most logical choice, but for freight and suburban transport, rail remains a viable and important option, but only if government backs it. As I noted last week, freight within NZ is expected to increase by up to 75% in the next 20 years – does National want to see all of that going onto the roads? Why aren’t we following the rest of the world and looking to rail to ease traffic congestion and reduce our reliance on imported oil?


29 Responses to “Investment in rail”

  1. Spud says:

    Agreed. :-(

  2. sweetd says:

    Chris, what is the population of those countries you mentioned?, Much bigger than NZ yes? Rail works best with big population combined with big distances. This has been discussed many times before. How about showing some accurate comparisons with regards to distance and population?

  3. Sam says:

    Yes, Sweetd, let’s just ignore the fact that Auckland is the most (or second most) sprawling city per head of population in the world and make completely unfounded and cop-out excuses for a lack of vision.

    I you want to look at some well researched posts on the importance of rail, check out http://www.transportblog.co.nz. It’s definitely one of my favourites.

  4. Seán says:

    Yes, the layout of NZ and its small population just doesn’t make rail conducive to NZ. I have been a logistics manager in a past role and I have found that rail is often on the backfoot when looking at the cost options. With a truck one can take a load straight from supplier to customer. But with rail you still need a truck to get the product from supplier to rail depot and then at the other end from rail depot to customer. For every extra handling of the product the cost starts to rise quickly. And then there’s the question of the storage while awaiting shipping/pick-up at the rail depots. So usually the volumes have to start getting quite big before it becomes financially viable, in most cases. Since we need such an upgrade, I’m not so sure it’s a worthwhile venture for the taxpayer to invest into.

  5. Sam says:

    You’re forgetting, Sean, that the government pays for the roads and the trucking companies pay a paltry sum toward their upkeep. It’s not fair to compare trucking costs with rail costs when KiwiRail is expected to build and maintain their own infrastructure when trucking companies are not.

    Further, just because something is expensive doesn’t mean it isn’t worth doing. I’d like to see you take that mentality to health or education. Oh wait, that’d make you a National minister then.

  6. The Gnat Exterminator says:

    Even Auckland does not have the population to sustain a point to point rail system like London, New York, etc. However Wellington has two good corridors suited to rail which are well used, but in need of bringing to the 21st century in terms of passenger services.

    I think a far better option would be more bus priority lanes in Auckland and Christchurch along the main transit routes and, possibly even an underground busway loop under the city centre of Auckland (allowing buses to get from K Road to Quay Street in a few minutes) to make buses much quicker than cars in the city centre.

  7. Tracey says:

    The population of london when they opened their undeground was 3.1 million. I get that cars were not invented yet.

    Budapest has a diverse transport system including trams, rail, underground and buses, their current (2009) population is 1.7m.

    Budapest public transport is provided by BKV (city owned company), the company operates buses, trolleybuses, trams, suburban railway lines, the metro, a boat service, a cogwheel railway and a chairlift, called Libeg?.

    Budapest’s tram network is extensive, and reliable despite poor track infrastructure and an ageing fleet.

    Two different examples, both built at a similar time…

  8. millsy says:

    What’s with all the anti-rail garbage on the comments here?

  9. Tracey says:

    I also get that Budapest isnt having to start from scratch. My point is every one of these cities had to start somewhere, with larger populations than we have in Auckland or fewer.

    At some point, someone, somewhere must get that it only gets more expensive if we leave it til “tomorrow”??

    ARTA has a good strategy in place what it lacks is meaningful political support in Auckland or Wellington.

    This city road peak now practically runs from 745am to 930am and then from 315 to 615pm, with pretty big motorway traffic in between.

    On the subject of trucks I’d like to see them OUT of fastlanes on motorways, keeping tothe speed limit and slowing through passing lanes on open roads. Trucks passing trucks in open road passing lanes is a joke and regular.

  10. salsy says:

    The issue which I believe underpins the urgency to develop NZ Rail systems is Peak Oil.

    Sure biofuels are on the horsizon but what about now? National are not pushing for alternative technologies, leaving Kiwis high and dry as they become less and less able to afford petrol. I find it incredibly irresponsible to be investing millions in roading at this time.

    Even the CEO of shell Peter Voser, has indicated that we will see less price conditioning (fluctuations) at the pump, replaced instead with volatile sharp rises. That hurts, not just indiviuals but business who rely on transport – virtually every business does. So for example be prepared for basics like supermarket costs go through the roof as Kiwis will be hit not only with GST rise but also the rising cost of goods & produce distribution.

  11. Seán says:

    Sam – I am not sure of the ratio, but I understood that petrol tax and RUCs was paid by the user for the upkeep of our roads. No doubt the initial building of new roads is funded by the appropriate government authority.

    What I was trying to get across is that it really has to make business sense to the end users or else it is just going to be another expensive flop. I wouldn’t take the “if you build it, he will come” approach.

    I am also wary of figures that predict the future in complex matters. Above Chris mentioned “freight within NZ is expected to increase by up to 75% in the next 20 years”. Hmmmm, what type of freight, in what quantities at what times, what routes, etc? I am all in favour of rail where it becomes the most cost effective option so I would suggest to take a very cautious approach and single out the routes that would be most profitable. But due to the elongated layout of NZ, and that most of the population lives in the top half of the North Island, I really can’t see there being too many viable options. Would be worthwhile looking into at least though, I guess.

  12. jarbury says:

    The myth that Auckland is the second most sprawled city in the world is a complete and utter myth. We have twice the densities of Perth and Brisbane. And both those cities have far superior rail systems to Auckland. So our supposed low density is not an excuse for a poor rail system.

    Auckland actually has a fairly limited number of development corridors and could be very well served by an expanded rail system fed by feeder buses. In Perth and Toronto (both very low density sprawled cities) around 70% of rail patrons arrived at their station on the bus. These systems work REALLY well.

  13. Clarke says:

    Sean – according to the Ministry of Transport “Surface Transport Costs and Charges” report from 2005, trucks pay only 55% of their direct costs; the rest is a subsidy from the taxpayer. In comparison, rail pays nearly 90% of its direct costs. So there’s clearly not a level playing field between the two modes.

  14. Draco T Bastard says:

    So for example be prepared for basics like supermarket costs go through the roof as Kiwis will be hit not only with GST rise but also the rising cost of goods & produce distribution.

    And don’t forget the cost of going to work. People already find it difficult to pay the costs of getting to and from work. Perhaps it’s time we made the businesses directly pick up the tab for their workers to go work for them. You’d probably find that public transport, especially rail, would suddenly become a valid option even in Nationals opinion.

    Auckland actually has a fairly limited number of development corridors and could be very well served by an expanded rail system fed by feeder buses.

    That’s the most logical system. My idea was that we should just rip up the middle lanes of the motorways and put in a double track of light rail. Feed those by buses and you have a viable public transport system (buses on the motorway is not viable).

    Oil is now @ $US82.70 per barrel at the beginning of the northern summer (when more people use their cars) and a recovery from a recession which is going to require more oil. I won’t be overly surprised if it hits $US100 by June which could throw the world back into recession by the middle of our summer.

    Under these conditions more roads and more cars is totally irrational which goes to show the extent of the NACTS delusion as far as economics goes. The price of oil keeps going up and sooner or later we just won’t be able to afford it at which points all those roads become even bigger lemons than what they already are.

  15. ghostwhowalksnz says:

    Jarbury you are spouting nonsense. The sprawl of Auckland is due to the geography , which is worsened by 3-4 narrow corridors.
    None of which apply to Toronto or Perth or Brisbane.
    I dont know where you get your figures of twice the density of Australian cities. The suburban sprawl of both is very similar to Aucklands density

  16. Tracey says:

    Brisbane is 1.8 million, perth 1.6 million and toronto 2.48 million. Dont know what the populations were when they introduced rail or light rail or whatever

  17. Seán says:

    Clarke – of course that was before the price of RUCs went up considerably a few years back so probably the ratio is closer now. And of course on top of that is petrol tax from non-diesel powered vehicles which is also used for road maintenace.

  18. jarbury says:

    GWW, depends on your definition of sprawl I suppose. As I wrote my Master’s Thesis on the issue I think I have some clue about things.

    Sprawl is not merely how far a city stretches, it is about overall densities, land-use patterns (single use versus mixed use) as well as the level of auto-dependency.

    Strangely enough, Los Angeles is actually the highest density US city, with 27.3 people per hectare. The reason it’s so auto-dependent is the same as Auckland: decades of throwing money at motorways and neglecting everything else.

    Sydney (20.4) and Melbourne (15.7) have similar densities to Auckland (don’t trust the Wikipedia figures), Brisbane is significantly lower at around 9.1 people per hectare.

  19. Spud says:

    Wow :-D I hope you don’t mind me saying, but that’s cool :-D
    I’ll leave you alone now.

  20. Jeremy M Harris says:

    Jarbury is absolutely right, a recent OECD report stated that of the 50 largest cities in the US, Canada, Australia and NZ, Auckland is the 7th densest… That Auckland is a sprawling city unsuited to rail is an absolute myth, propogated by the road lobby for 50 years now and I guess if you say something often enough……

  21. jarbury says:

    Furthermore, GWW’s point that Auckland ’sprawls’ along 3-4 main corridors actually makes it particularly suitable to public transport.

    By contrast, Melbourne has something like 16 railway lines and still struggles to adequately cover that city.

  22. Luke says:

    The worry is when the rail projects that Labour started have finished, there will be no work for the skilled workers that we hae had to retrain in the past 5 years. Therefore they will be all off overseas, so therefore we need to start working on the next major projects or the staff will be lost yet again.
    For anyone who doubts the usefulness of rail they should talk to Fonterra, Mainfreight, or any of the Ports or shipping lines that serve NZ. They know the value of rail to their business, and its growth potential.

  23. jarbury says:

    Good point Luke. We are still waiting for the first new public transport project to be announced by Joyce.

  24. Dylan says:

    It would be lovely to get rail back but how would we exactly? We don’t have the money. We had our state assets and from what I hear it was great while it lasted but they are gone for good unless our government is willing to take some harsh measures.

  25. Tracey says:

    Dylan, it would be a great investment in infrstrksha(those projects National promised to help us out of the recession and create more jobs) and a gift to future generations. For 30 years this has been delayed in Auckand because of cost, and guess what the cost keeps mounting, but not just to deal with the physical rail but all the results of nt having it.

    I have livedin Auckland over 4o years and intende retiring from her ein 5, I still would contribute to this project.

  26. Dylan says:

    Our government is already running a deficit though. What would we fund the rails with? With all the debt we owe?

  27. jarbury says:

    Dylan, how about some of the $11 billion the government wants to waste on motorways over the next decade?

  28. Tracey says:

    Dylan what about some of the money they are borrowing each week, this would provide a great injection into the economy and solve a problem, one that isn’t going away. If we are going into debt, and we are lets have something substantial and useful to show from it all.

  29. Ben says:

    i still cant get over your statement from original post,

    ‘Between its sale and eventual buy-back in 2008, very little was spent on upgrading or even maintaining rail services.’

    Thats Ontrack under Labour governance, are you red carded your parties performance here?

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