$100m At Least To Save Northland Rail


Once again, a big figure has been placed on what is needed to save Northland rail, a figure hard to see happening in the present Government austerity conditions.

It is estimated that it would cost in the order of $100 million to bring the Northland lines up to an acceptable level of service, including work on the tunnels to enable their use by hi-cube containers which may encourage greater rail freight volumes.

As we know no funding has been allocated for this work and a decision on what will happen is expected to be made by KiwiRail in mid-2012, for implementation later that year.

The figure appears in an Auckland Council transport committee report.

It says that currently, the line just meets its train running costs but it not its maintenance costs.

The closure of Port Whangarei led to a 70% drop in rail freight volumes.

A new rail line has been designated and consented to the deep-water port at Marsden Point and all needed properties are close to being acquired. However, there is no identified funding to cover the estimated $120 million construction cost of the line, let alone the $100 million needed to bring the North Auckland line up to an acceptable level of service and the ability to accommodate hi-cube containers.

KiwiRail intends to work with Northland stakeholders and the Government to identify any realistic options to increase freight volumes to the extent that the lines return to profitability. In the event that this is unsuccessful, one option would be to keep some or all of the lines open would be for funding support from outside of KiwiRail.

While little is new, it’s useful to have the facts.

KiwiRail states that the Northland lines earn revenue of $8-$9 million a year. This covers the cost of train operations but not the costs of infrastructure maintenance. This ranges between $3 million and $5 million a year, just to keep the lines in their current state, and is not to the standard needed to support growth.

This means that it takes five hours for a train to travel between Auckland and Whangarei, a distance of 215km by rail versus two hours for a truck to travel the 165km between the same two places.

The report notes the current Government’s “focus”on the Puhoi to Wellsford Road of National Significance (RoNS) to further shorten the travel time by road. In addition, NZTA is investing $51 million in upgrading State Highway 1 through Whangarei and is  anticipated to recommend a bypass of the Brynderwyns to the west as part of a strategic plan for the long-term development of the highway between Auckland and Whangarei.

According to the 2006 National Freight Study, rail currently moves approximately 300,000 tonnes per year, less than 3% of the total freight task of 12,360,000 tonnes in Northland. This excludes the Marsden Point to Wiri oil pipeline and coastal shipping.

Will any rail freight go north in the future?

Before the opening of the new port at Marsden Point, which does not have a rail link, rail freight volumes were around 1,000,000 tonnes a year, largely driven by the fact that the former Port Whangarei had rail access.

“Significant investment is needed to bring the lines up to an acceptable standard and to improve transit times. The only recent investment in the line west of Waitakere was some work by KiwiRail to bring much of the section between Waitakere and Helensville up from 25 km/h running to 70 km/h running for the Helensville trial passenger service’ says the report.

The line has inadequate clearance in six of its thirteen tunnels to create sufficient clearance for modern hi-cube containers, meaning all such containers currently need to be transported by road.

The deep-water port at Marsden Point does not have a rail link. It replaced Port Whangarei, which did have a rail link and this has led to a very significant drop in rail freight volumes in Northland from around 1,000,000 tonnes in 2000 to 300,000 tonnes in 2006.

In 2003, the Northland Regional Council (NRC) and TranzRail began a major investigation into the Marsden Point rail link, which established the preferred route, engineering designs, costings and drafted the Assessment of Environmental Effects.

In 2008, NRC entered into a joint venture with ONTRACK  to complete the designation and purchase the necessary land along the route, investing one-third of the $10 million cost of the designation process and meeting the cost of property acquisition itself. The remainder of the cost of the designation process was shared between ONTRACK and the Government. The designation and resource consents application have been granted, with one outstanding appeal expected to be resolved shortly.

NRC has purchased seven properties along the proposed rail corridor at a cost of $6.87 million with a final property to acquire at a cost of $4.45 million, with settlement on 1 June 2011.

It is understood that there are no further properties to purchase.

However, there is no identified funding for the estimated $120 million cost to construct the Marsden Point line.

“A key question to answer is whether the Marsden Point rail link would, in itself, be sufficient to return the Northland rail lines to profitability.”

Issues that may be looked at by Council officers include:

  • Potential financial costs relating to the section of the Western Line within the Auckland metro rail network that KiwiRail might wish to pass on to Auckland Council/ Auckland Transport. This could be in the form of increased track access charges with no revenue from freight to contribute to those costs
  • Potential impacts on rail towns (could be positive or negative)
  • Potential impacts on Auckland metro rail operations with what would be a passenger-only operation on the Western Line, including reducing conflict between metro and freight services
  • Potential impacts on the Auckland Electrification Project
  • Potential increase in truck movements on State Highway 1 between Northland and Auckland, including on the planned Puhoi – Wellsford highway
  • Potential impacts on operations at Wiri inland port and on the volumes of trucks accessing the port of Auckland
  • Potential impacts on the Ports of Auckland, which is fully owned by Auckland Council Investments Limited
  • Potential impacts on CO2 emissions and atmospheric pollution
  • Potential impacts on residences and businesses adjacent to the Western Line and on potential intensification around railway stations
  • Potential impacts on the proposed Avondale to Southdown rail line
  • Potential impacts on the Auckland Harbour Bridge and proposed new crossing.




  1. Matt L says:

    I still think the best option is to spend about $300m on upgrading the road from Puhoi to Wellsford with bypasses of the towns, realigned curves, more passing lanes and other safety features then spend another $200m on upgrading the rail line. That would give us most of the benefits of P2W plus an upgraded line and best of all would be over $1b cheaper than a motorway to Wellsford, money that could be spent on other roads in Northaland or something like the CBD tunnel.

  2. DanC says:

    What I wanted to say Matt L said. So that was easy!

  3. Simon says:

    Oh that Matt L was transport minister and Steven Joyce was some Jo bloggs living somewhere like Iceland :)

  4. tim says:

    Time to shut down the Northland line - an unnecessary distraction for the overpaid executives at KiwiFail. What a foolish investment for land when they couldn’t afford the construction - no one can plead ignorance here!!!

  5. Simon says:

    Oh that Matt L was transport minister and Steven Joyce was some Jo bloggs living somewhere like Iceland or somewhere preferably as far away from NZ as possible :)

  6. Simon says:

    Tim, maybe if you`re company had had little or no investment in 20-30years we might call you and your company a failure too. What do you expect?

    Still a hell of a lot cheaper at a few hundred million to upgrade the rail line and do a bypass and other remedial works on the current road with more benefit than stupidly spend a cool two billion on a road that even by it`s own BCR doesn`t show any justification for building it.

    And ever heard of planning for the future? There`s scores of road and rail routes that have been planned and protected in the past, and sometimes requiring property purchases. Infact at the very moment a group including AKL airport, Auckland Council, Kiwirail are in the middle of getting a designation for a rail line to Auckland Airport done. Hopefully in the case of that one it won`t require any or very few property purchases.

    Just because the link to Marsden isn`t being built now doesn`t mean it won`t get get built in the future. This govt will only be in for so long and hopefully the next govt will show more interest.

  7. Giel says:

    Sorry Guys but spending $200 Million on Northland Rail would be wasteful at this time. I agree spending over $1 Billion on PW2 would also be wasteful and that spending about $300 Million on upgrading the road would be best for now. The money saved there should be used to help fund the CBD Rail tunnel which has the higher BCR and makes Auckland a better city to live, work and play.

    The sad reality for Northland rail is that $200 Million doesn’t really fix Northland Rails fundamental problem - lack of suitable railfreight - to attract that it would need a lot more spent that $200 Million with line extensions (not just Marsden Point) etc. Probably $100′s of Millions more.

    Yes there is plenty of Forestry in Northland but most is away from Rail and that which is not requires lots of double handling and is very short haul for a rail portion eg Dargaville to Portland, Otiria to Portland. Rail can simply not charge enough and remain competitive with road on such a low value commodity on such a short haul and at the same time offset the double handling of logs between road and rail - that is a killer to rail competiveness on short line haul.

    The same is true of aggregates. This is a low value product that cannot support short haul rail if double handling is involved. Most quarry site and destinations are not direct rail served so again double handling. These sorts of commodities only work for rail where volumes are very large and there is no double handling involved or where the rail linehaul portion is greater than 300km to offset these costs. That is a very dangerous model for rail to force that freight onto rail and not sustainable - it would undermine all of rail in New Zealand.

    As for Dairy in Northland, the Kauri dairy factory is simply not big enough (it is no Edendale) and Dairy in Northland generally is not big enough. Maungatoroto Dairy is not directly served by rail either and requires double handling again and so is not economic for short haul. Dairy fright on rail works in places like Waikato, Taranaki or Southland where dry stores, milk loading facilities and ports are directly served by rail sidings and volumes are large.

    A Marsden Point rail link could help save Northland Rail if it became an Import / Export port - but why would it? Tauranga with its Metroport performs that function as does Auckland Port - both of which are not going anywhere in a hurry. So sorry but Northland Rails future is limited unless something big happens up there like major mining or other developments that could bring millions of direct served tonnage to rail.

  8. Matt L says:

    Geil - Did you even read the post above, this and previous information I have seen indicates that there is more than enough potential traffic to keep the line feasible if the Marsden link was built and the tracks upgraded. As mentioned in the story there was over 3 times as much freight going over the lines when the port was in its old location and much of it was apparently traffic from within the group of threatened lines. Basically if the port hadn’t of shifted then it is likely rail would still be viable up there.

    I have also heard that Kiwirail started to build up traffic as recently as a year or two ago and it was going so well more trains had to be put on but then they decided that they needed the wagons elsewhere so canned the service. Apparently part of the problem is they are now only going after certain contracts so are in some ways their own worst enemy.

  9. Jon Reeves says:

    So, NZTA immediately found $120 million for a short additional motorway lane to “solve congestion” caused by their poorly designed SH20 interchange.

    Ok, we’ll have $200 to solve the upgrades required for the North Auckland Rail line thanks Steven.

    Oh, I forgot, Joycey only invests in poor economic value projects, like his Holiday Highway .

    So, the heavily subsidised trucking industry is killing rail. The Nats really need to be booted out this year if we want a country with a positive future.

  10. malcolm says:

    Well thats that then. Looks like its going to close. The earthquake gives National a nice excuse to force Kiwirail to close the line.

  11. Giel says:

    Matt L - Yes I did read the article above but the 1 Million tonnes referred to historically moved in Northland was short haul tonnage of low value going to the old Whangarei port before Marsden Point port as it is now was built. Other tonnage has been lost for ever as factories have closed etc. Even if it all that came back to rail with a rail link to Marsden Point rail would still not be economically viable. Sure rail could carry more tonnage but could it do it economically ie. cover its operating and capital costs. I am sure rail could move millions of tonnes for under its cost to be competitive with road but that doesn’t make rail economically viable I am afraid.

    However there is value in keeping the option alive for Northland Rail as you never know what is around the corner - look at West Coast Coal. In 1988 they were talking about closing the West Coast rail link and without that now the export coal market for Solid Energy might not exist. I think preserving it for that reason alone may be worth the risk but it should be done at minimum cost for now.

  12. Jon Reeves says:

    Giel, your argument is flawed in that the SAME statements can be made about the trucking operators. Can they cover operating costs and capital costs, including paying a real amount of RUC’s, not the pathetically low RUC’s they are paying now? No, they probably couldn’t, so they receive a large dose of public subsidies indirectly. So why isn’t rail given the exact same playing field?

    However, the National party receives large donations in cash and kind from the Trucking and construction lobby, do you think that has any part to do with Joyces unhealthy stance against rail investment going forward for Northland?

  13. tim says:

    Simon, I think it best we focus on the Northland Line. Clearly it is not be a profitable investment, hence would destroy shareholder value owned by the taxpayer as well as distract from more profitable routes requiring less money.

    Throwing more good money after bad would be foolish. Unlike truckers on roads, KiwiRail has a monopoly on the line and still can’t make it work. It clearly needs to step aside and let the line go rather than customers using other lines or even worse the poor old taxpayer having to subsidise

  14. tuktuk says:


    All indications are that with a kick-start investment, the Northland line could be very profitable indeed. It fits well with National’s growth strategy for Auckland to expand the North Shore. One scenario is a new inland container port at Kumeu linked to the new Northwest motorway with onward rail transportation of containers to Marsden Point along an upgraded rail link….. yes, there is every possibility of a very profitable future for Northland rail.

    However, a new inland container port at Kumeu and rail transport to Marsden Point would also compete with super heavy duty 60 tonne trucks authorised to operate along the Puford Holiday Highway. And that is the big concern as far as NACT’s trucker funders are concerned.

  15. BD says:

    Yeah that is reach $100m to save Northland Rail sounds pretty reasonable to me, giving that it is a very important line in terms of moving frieght and people to their destination.

    Funny that the Waikato Expressway between Hamilton and Narawhia recieved $150m out of nowhere, even after the government said that we have to be careful fo what we spend this year on rebuilding Christchurch, what a load of BS John Key, you just simply don’t want to fund public transport projects, you don’t care about the earthquake.

  16. Patrick R says:

    Tim that is a deeply flawed analysis. That Joyce is determined to subsidise Northland trucking to the tune of 2billion with absolutely no financial return and almost certainly a negative economic return puts your narrow view of the value of the Northland Line into sharp relief. To say that KR has a monopoly on the line is true but meaningless, it has no monopoly on moving freight, and it is up against an industry that we all subsidise. It isn’t anything like apples with apples. The real question is: What is the value of this asset to the country on all levels? And not simply financially although that is very important and we must strive to make it perform better. Is it something that we should lightly abandon?

    Every container on a train is one less on a truck, damaging roads and endangering lives [yes close the line and more people will die]. Rail freight is way more energy efficient and we need desperately to use less imported oil and to generate less carbon.

    This line has basically suffered from a version of ‘constructive dismissal’ Unmaintained for decades and not taken to the port when it moved is a way to make an asset unusable. Think of the investment in roads over the last 50 years, think how viable trucking would be without that.

    And of course the rail line will never carry everything, but it sure could carry a lot of long haul goods, as well as offering a future tourist line and help make Northland Port more viable.

    Its daft to throw away a resource like this when all it needs is a relatively small investment to allow it to function. Relatively small compared to highway spending. 100 mil alone on planning the Puford highway. Joyces’ choices are ideologically driven and do not stand up to analysis. Don’t fall into the trap of narrow balance sheet views of rundown under supported nationally important assets.

  17. Mark says:

    I’d suggest another way to look at Marsden line/northland is as a “network” and the redundancy needed. Tauranga/Auckland/Marsden ports should be seen as a group, that offers long term protection to Auckland and NZ economy.

    It’s not just for an issue of say an earthquake/volcano, that stopped Auckland port - where you could land and bring down supplies from northland to support/feed auckland.

    But also for exports and the $ life blood of the country. What woudl happen to export receipts if something major happened in Tauranga? Auckland couldn’t cope shiftling logs /milk products etc - but they could be re-routed through to Marsden….

    The bigger picture/risk needs to be considered here.

  18. Giel says:

    Patrick R - very good I agree with all your points - it is sad but all true.

    tuktuk - I don’t think Northland Rail will be profitable - the best we can hope for is broader economic sustainability when wider economic benefits are taken into account in the way Patrick R alludes to. The costs / investments are too high relative to potential revenue for profit in the accounting sense. Then again roads are not measured on a profit/loss basis - surely if they were 1000′s Km’s of New Zealand’s road network would close down!

    Jon argument not so much flawed as unfortunate - actually rail is subsidised more per tonne kilometre than road now. That wasn’t the case in the past. The old Land Transport Surface study based on 2002 numbers showed the playing field was heavily tilted in favour of road (paying about 65% of cost) over rail (paying about 82% of costs) at that time but this has changed since the $100′s of Millions that have gone into the Network by the Government via Ontrack and KiwiRail. It is now more in Rails favour. But you could argue that has simply righted the wrongs of the last 30 years when it was the other way round ie catch up.

  19. richard says:

    Trucks are quoted to go to Whangarei in 2 Hours a distance of 165 kms. With the truck speed limit @90 kph that would mean travelling at an average speed of nearly their speed limit………? On that road?, I know they speed a lot but the hills and holdups surely would make the trip nearer 3 hrs????

  20. Patrick R says:

    Giel are you sure of your numbers? Recent investment [spending really] in highways hasn’t tipped the balance? Do they price accidents for both mores? What is the fuel price point?

    Roads are evaluated economically [then that is ignored by Joyce, but rail financially. And the biggest cost to rail is the paper one of depreciation…. Not apples with apples…..

  21. tuktuk says:

    Giel - ‘I don’t think Northland Rail will be profitable’ - thats what they said about the Tranz Alpine line to the west coast in the 1980s!

    For Northland, the black gold is ultimately continued population growth in Auckland and points North. A million extra people means a million extra consumers in need of a containerised import focussed port. That million extra people means that the pressure for the Ports of Auckland to release land back to the city can only increase over the decades to come.

    Investment now really does mean profitability in future, not next year……but likely in one decade, and a certainty in two!

    Doing the investment now as an initial cash-flow thing will win back considerable log traffic. It keeps that traffic off the roads and in doing so enhances the region as a visitor destination. A rail link to Marsden Point now has the potential to encourage a forest products valued added, employment creating manufacturing at Marsden Point in future.

    However, the long term prognosis for Northland Rail does not and should not rely solely on forestry and other low value bulky goods.

    Unlike some of the other country lines which may be just too hard, Northland Rail clearly has “the legs” to go places. This will be understood by “movers and shakers” in the community and it really is in the best interests of the National government to work hard to pull this line through.

  22. Giel says:

    Patrick – Yes, know my numbers.
    Rail carries about 15% of the nations freight volumes as measured by tonne kilometres. Road about 70%, sea about 15%. Capex funding for rail infrastructure (non metro) has been about $200 M a year for PAYGO capex and/or operating grant for a number of years now and this has been entirely funded by Crown as KR historically funded (under Toll) its rolling stock first (or at least they did) from its own cash flows but didn’t have enough left over for any major infrastructure investment. So let’s leave rolling stock out of it for now. That rail infrastructure funding Government provided for no return. Road funding through NZTA for whole Network is about $1.5 Billion a year but that covers all road users including private motorists - which rail don’t have of course. If you are generous said say a two third’s of that investment benefited truckers, that would be $1 Billion but of course they pay a lot of that through RUC’s and fuel excise duty (north of $500 Million) on a PAYGO so they do contribute more than 50%, and probably a lot more, to their infrastructure costs. So rail has been recently been way more funded per tonne kilometre than road from free capital than road. Freight pricing on rail has not built in this free capital as to do so would price them off the freight market and really upset the likes of Fonterra, Solid Energy and others. Those companies are the rail lobbyists par excellence as you have them to thank for that investment and convincing Government! They benefit of course by having a lower transport cost structures ut there argument goes that a lower cost structure makes them more competitive internationally for their exports and so enables more exports and so enables a higher GDP for NZ and so enables a better NZ for all. Rail economically evaluated – I think so!

    Yes Road deaths are factored in Government analysis - about $4 Million a person but at most only a few are caused by heavy trucks so even with that and other externalities it doesn’t benefit rail that much – you would need to save many dozens of lives to make a big difference. Nor does the price of CO2 emissions make a big difference - it just not that big a part of the total transport costs even it was priced at $30 a tonne.

    Rail is 3 to 4 times more efficient than road when a train is fully laden but a lot of our trains aren’t and so are over powered which lowers this cost advantage somewhat. For rail to be substantially more fuel efficient if must have efficient backloads for general traffic. Road transport triangulates for backloads and therefore is better at that than rail unfortunately. That also offset much of rails cost advantage. Where rail does have huge benefits is in things like Coal, Milk, large Forestry volumes. Yes they are empty back loads but so is the road journey for those types of traffics. So rail wins by a country mile on that stuff if no double handling is involved and the journey is a reasonable length. It really struggles on general freight though because of its lack of flexibility.

    In conclusion, yes roads are priced in an economic sense and it is fair to say before 2004 rail wasn’t. But with all the Government funding for rail in recent years, as described above, where the cost of the capital has been effectively “free” by Government grant it is also, by proxy, economically evaluated now. There would be no other justification for that investment otherwise. So whilst that argument may have been true in the past it certainly isn’t these days.

    Guys we have to be careful how we present our arguments as most people in the know, know all this stuff – otherwise they just laugh at us and we will get no where.

  23. Giel says:

    tuk tuk I agree with you that more people in Northland will make a huge difference potentially to the line and that’s why I suggest the line should be kept for future use but in a low cost way for now - otherwise we risk loosing it for good.

    There does seem a strong superfical logic that a rail link north of NZ’s largest city should have some merit but currently it is a working “museum”. A low risk approach is best for now otherwise we will turn people off big time.

    There is no need to close the line - a few million a year will keep it going for decades (if we needed to) and so preserve a major strategic option for NZ for when it might be upgraded in the future.

    Someone just needs to be bothered thats all.

  24. Tim says:

    I admire the naive optimism of those that think think an unprofitable rail line can miraculously make money if enough cash is thrown at the problem.

    If the line were profitable, all KiwiRail would have to do is get funding from a bank or issue bonds. However, no sane investor or bank would put money into such a risky scheme. The question then becomes, why on Earth should the poor taxpayer!!!? LOL

    KiwiRail is a heavilly subsidised monopoly that is losing money. I’m no fan of trucks, and while Trucks may also be “subsidised”, they share the roads with everyone else and do pay higher charges than the rest of us - the issue is should they pay more, but they don’t have a monopoly over roads. In terms of km travelled, trucks also use the road less than the general public, although weight is a real issue.

    Rail needs to pick its battles with care and focus on the lines that create value, not distractions and pipe dreams

  25. Jon C says:

    @Giel Am enjoying your contributions and intelligent insight. Thanks for coming by.

  26. Patrick R says:

    Tim just repeating a word does not make it meaningful. Even if it is your favourite game. KR has no monopoly, KR is in the freight business; it is not alone, it has no royal warrant. In fact it is in competition with a wide selection of operators that we all subsidise. None of these operators have to pay for the roads they use to any level approaching their real cost. The state pays, ratepayers pay. We all pay to clean up the mess they make.

    This whole, patronising ‘you have to be realistic’ schtick is wearing thin. Do you understand the difference between economic and financial analysis?

  27. anthony says:

    This isn’t really relavant, but i must say Jon, your blog is getting a lot of constant attention!!!! check out the amount of comments you have now compared to a year or so ago!

    Im glad i stumbled across this site when i was searching for trustworthy info on Maxx trains that wasn’t honeyed by the government. :)

  28. tim says:

    Patrick, it would be appreciated if you don’t misquote me in the future, I never said “you have to be realistic”. This is a rail fan forum and you can be as unrealistic as you please.

    I do think KiwiFail has to get real though. It does have an exclusive franchise over the entire rail network in respect of freight - it’s been that way since TranzRail days. That’s a monopoly! As KiwiFail has proven, not all monopolies are profitable or create value.

    In respect of trucks, they will always be on the roads. The thought that rail can somehow get rid of them all is a remarkable claim! If trucks aren’t paying enough to cover their use on the roads, write to your MP and the relevant Minister with the proof!

    The only real difference between economic and financial analysis here is in the treatment of externalities and cross-subsidisation. Unfortunately, they don’t stack up , especially given coastal shipping is such a viable alternative in this case. Otherwise, someone would be trumpeting amazing “non financial” benefits to justify throwing money at the problem.

    It really is time to close the Northland line guys! LOL

  29. tuktuk says:

    Giel - from the sound of things, Northland Rail needs some champions who will support it in whatever form now on the basis that long term, it has the potential to be a very useful asset.

    Presumably that current support may be through subsidy or funnelling sufficient traffic to keep it ticking over.

    Tim - you get real. Where are your facts and figures? Don’t get me started on the spurious WEBs used to help support the Holiday Highway - double Auckland-Whangarei truck trips per day, poaching of processed log traffic off Marsden Point and all sorts of B.S.

  30. AKT says:

    Good debate folks, I am enjoying it.
    Keep it going but a reminder, let’s not get personal and please respect each other.

  31. Luke says:

    Individual road projects do not pay.
    IE the Waterview Connection costs will not be covered by increased RUCs and fuel tax take. In fact if you listen to NZTA it will reduce fuel tax and RUC take.
    There is also the issue of tradeoffs that need to be done between road and rail in regional NZ.
    IE major increases in logging trucks in some areas will cause major infrastructure upgrades, and these will be funded bu the govt, and I doubt the cost would be recovered from operators.

    In these areas giving small subsidies to operate log transfer to rail stations would be far more cost effective than roading upgrades.

  32. AKT says:

    Key said the other day:
    “Let us take the Pūhoi to Wellsford road, which the Government has committed to. It is a highway of national significance. On that road on any one given day, 27,000 people use it. When it comes to commuter rail in Auckland on any one given day, 24,500 people use it. So it looks to me like the Government has its commitments and its priorities in the right place.”

  33. tuktuk says:

    Hi AKT -
    ‘Keep it going but a reminder, let’s not get personal and please respect each other’

    Ok fair call, apologies to Tim.

    I did want to get one more point in this evening.
    Coastal Shipping between Marsden Point and Auckland for containers “fresh off the boat”.

    The issue is one of storage and finding convenient and low cost land to store those containers prior to export, and post import. Both Ports of Auckland and Port of Tauranga have things well sorted with sites in South Auckland.

    If Auckland is to have a big growth spurt north of the Harbour Bridge, say over the next 20-30 years, then there is a strong case for good quality storage that is low cost yet convenient to the North Shore.

    Its gonna make sense to do short hauls through the Auckland metropolitan area by rail…..this is the case if it is a transhipment off a coastal ship to a remote outer/urban container terminal, or, if it is rail from that outer/urban container terminal all the way to Marsden Point. And this is the kicker - with no space on Auckland wharves to store/distribute containers, use of coastal shipping involves an extra transhipment.

    Port of Tauranga uses rail between South Auckland and Tauranga because rail offers the most attractive package. Period. With sufficient population base, Marsden Point has the potential to achieve the same result to a Kumeu or similarly located terminal serving the North Shore.

  34. Robincole says:

    I doubt the figure of 300,000 tonne per year. There are four usually quite long freight trains a day between Akld and Whangarei, this alone would have to amount to at least 300,000 tonne.Plus there are a number of daily ‘internal’ trains in Northland.The loss of Port Whangarei hit rail hard, but not that hard.

  35. Giel says:

    Robin Cole I cam assure that 300,000 tones is right Most Northland trains have a net payload Four trains day Actually is two return and most heading north are empty return Don’t confuse gross tonnage with payload tonnage which is what counts. Northland trains only about 240 days a year and average payload is about 300 to 400 tonnes (not gross which is irrelevant and most are empty going back - empty chip wagons, empty containers etc) Within the Northland region only about 100,000 tones moves in old 4 wheel wagons of painfully low payload so that equates about 300,000 tonnes

  36. Giel says:

    Last comment by me not very clear. Went up from iPad by mistake before checking. Should say most trains have a average payload of 300 to 400 tonnes each and that 4 trains a day is actually only 2 trains return a day at 240 days a year ( most returning trains are empty return). This is about 200,000 year plus 100,000 internally in Northland - total circa 300,000 a year

  37. Patrick R says:

    Tim I’m not sure you’re quite aware that you are in fact arguing in favour of creating a monopoly. Closing the rail line takes away competition from the Northland freight market, it doesn’t increase it. It creates, in one move, a total modal monopoly of land transport, in this area. But perhaps this is what you want?

    Clearly investing a comparatively small sum [in the context of land transport investments currently planed for the region] to make the route more viable is in the interests of the asset owners [all of us] and in the interests of the region [employment and diversity of infrastructure], and in the Company [The whole rail network becomes more viable if each section is busier].

    To close this line only serves the interests of a small group of trucking companies by ensuring a monopoly for them in land transport, further commits the country to oil imports we can barely afford, and generally reduces the nations strength and wealth.

    It would be a short sighted and brainless move. ‘LOL’

  38. tim says:

    Stick to the facts Patrick.

    Road can still compete with coastal shipping, and there’s no significant barriers to prevent other truck operators or even KiwiRail using their own trucks on the road (I remind you that rail, not road is the monopoly).

    Removing a costly and grossly underused rail-line makes no significant difference I’m afraid, apart from saving huge amounts of taxpayers money.

    Personal and rail-fan opinions aside, closing the line is the right thing to do. No one in their right minds would invest in these kinds of projects except politicians seeking to buy votes.

  39. Luke says:

    “huge amounts of taxpayers money”!
    yeah right, the railway covers its operational costs, just track maintenance thats the issue.
    The amount we are talking about is only in the order of a few million. Delaying the warkworth highway by a few weeks would cover that sort of money.
    So would a couple of log truck crashes a year.

    Coastal shipping and road serve very different markets, and there is little competition between the 2.
    Smart politicians can take 20 year views of these things and can see its not good to take close a line for the sake of a small amount of money, when it could become busy in a few years time, especially if fuel prices continue to rise.

  40. tuktuk says:

    ‘Removing a costly and grossly underused rail-line makes no significant difference I’m afraid, apart from saving huge amounts of taxpayers money.’

    Ah no………stick to the facts please. In comparison with $4 billion dollar harbour bridges and $1.6++ billion dollar Holiday Highways (both of which we are being told is all about the shifting of goods), any expenditure on rail is smaller than a gnat’s whisker. And more importantly, retains our nation’s resilience in an era where uncertainty is the rule.

    The rules about the “best road” to economic wealth and security are being re-written and it is to be hoped that our government has its eyes open.

    “Toto, I’ve a feeling we’re not in Kansas anymore!”

  41. tim says:

    Dream on dudes! You actually need $100m+ to prop up this line, and only one firm, a MONOPOLY actually controls and uses it.

    Contrast this with roads, where you have an open entry trucking market and the general public use the it.

    The Northland line has to stand up on its own two feet, not look jealously at roads and other government spending priorities. Unfortunately, you have all failed to create a case to justify spending money on the thing.

    If anyone’s up for the challenge and foaming at the bit to prove me wrong, I want to see a table showing all kiwifail revenues and costs, plus any externalities, less costs of financing (government or otherwise) and deadweight losses as well. Project it up to 20 years if you really think it can work and don’t forget to document your assumptions LOL

  42. Luke says:

    You don’t need $100 million to prop up the line.
    The $100 million is for daylighting tunnels for extra large containers, not urgent expenditure.
    I’m arguing it should keep operating as is with minimal expenditure, so if/when opportunities arise the big money can be spent.

  43. Giel says:

    Tim - I hear what you are saying and ordinarily you would be right on not investing $100 Million or any amount of significance in this line BUT Luke is also right on this one in that only a small amount of Government funding, a couple of million a year or so, is needed to keep the line ticking over for quite a few years to preserve an option in what could be an emerging situation. That is what Governments do around the world in numerous cases and that is why generally rail systems like NZ are state owned. It is a bit like a defence/military budget – most of the time it isn’t needed but sometimes it is to provide a country with robustness in an uncertain world. You are right it is a question of justifiable cost but I maintain the cost could be minimal for a few years at least. You certainly wouldn’t build if it wasn’t there (and certainly not invest $100 Million right now) but that goes for lots of NZ infrastructure in all parts of the country not just railways.

    The question is can anyone be bothered to preserve that option (who is to pay?). The option to retain the line has already been exercised for a few years as it is. As I understand no major expenditure is imminent now on the line as Ontrack/KiwiRail have already spent quite a bit on rehabilitating it since they took ownership back in 2004. But it would require some management focus by their team. Can Kiwi Rail (not failed yet – give it a chance to or not hopefully) be bothered or is it a sacrificial lamb to slaughter in order to get acceptance of the Turnaround Plan funding by the Government for the Network as a whole? In which case question should be asked and I am sure they will be at the appropriate time.

  44. Patrick R says:

    The real issue is politics as ever and Joyce needs to close it as he scrabbles around for ways to make Puford stack up. It doesn’t. But the extra trucks needed to haul what KR does now would help him with his pet project. Especially as traffic volumes are at best steady if not falling by NZTA’s own counts on SH1

    Very sad, shortsighted, and damn near corrupt. And deeply ironic that on this same site is the report of Europe actively moving away from road freight and switching to rail, because they are looking forward not back.

  45. Luke says:

    @giel what should happen is that NZTA should fund the missing amount, however this seems to require a change is law/regulation.
    A few million will not even cover the cost of one passing lane so to save 100 trucks a day I think it is worth it.

  46. tim says:

    The Northland Line had years to prove itself, I don’t think things will miraculously turn around in the next few years in the middle of the current recession.

    The fact that the line is much longer than the equivalent road, being a wildly indirect route, and there’s no cargo for half the journeys (ie northward) makes it quite clear why the line requires a government handout. Its an inefficient operation even at the best of times. Few freight firms could afford to run empty to this extent.

    Coastal shipping is quite capable of handling excess freight requirements in a more flexible and efficient way without affecting roads

  47. Luke says:

    Some of the wood products are backloaded heading north. I doubt any trucking firm could backload Fonterra containers.
    Coastal shipping isn’t much use for moving wood products from Whangarei to Tokoroa.
    Toll United were moving general freight by rail a year or so ago, but a shortage of wagons meant the wagons were taken for longer hauls. However with more wagons arriving they should be able to start this up again.

  48. tim says:

    Moving wood products from Whangarei to Tokoroa does not sound extremely profitable, whether by rail, truck or ship. There are other ports that could be used to export without shipping an unneccesary distance - eg Tauranga etc

    Toll would use the most cost effective provider to get goods from A to B within the required timeframes. While government subsidies would make it cheaper for toll or another freight forwarder so they can boost profits, doesn’t this just transfer wealth from the taxpayer to Toll with KiwiFail clipping the ticket as well?


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