Questions Over Auck Rail Tender


KiwiRail is about to announce a decision on who will win the tender for Auckland’s electric trains and China North Rail is tipped by some as leading favourite.
But now that decision has become embroiled in a local political spat.

And that would delay the trains starting operation as planned in 2014.
This afternoon that led Labour to call on the Prime Minister to instruct KiwiRail to defer any decisions on who will win the bid to build electric trains for Auckland.
The Prime Minister had admitted he is aware that the Auditor General’s Office had begun an inquiry including into a possible link between Sammy Wong, China North Rail and KiwiRail.
Sammy Wong is the husband of former Cabinet Minister Pansy Wong. The National Botany MP resigned from Parliament in December after admitting her husband was involved in a business deal on a taxpayer-subsidised trip they made to China in 2008
Labour’s Trevor Mallard said: “John Key cannot claim that the Auckland EMU decision is an operational matter for KiwiRail, when the Office of the Auditor General is already investigating links between a tenderer and Sammy Wong.
If the train decision is not delayed, Auckland’s new electric trains won’t be running on the network until 2014.
The first units will arrive from mid-2013 but KiwiRail does not expect the trains to be operational for commuters until sometime in 2014.
KiwiRail called for Expressions of Interest in May last year and in July a group of four preferred bidders was announced. However, at the beginning of September, KiwiRail announced it had extended the number of bidders from 4 to 10. That list is here Four have dropped out.

There was speculation the doors were open to Chinese tenderers, including China North Rail after key Government ministers visited China and reportedly explored Chinese winning infrastructure work here as part of closer economic ties.

Masts are appearing ready for the trains

Dunedin South MP Clare Curran said the issues being looked into by the Auditor General were not the only reasons that John Key should reconsider tenders. Labour has repeatedly asked that the Government consider the value to New Zealand’s struggling economy when it decides which company will win the $500 million bid for 38 electric multiple unit (EMU) fleet for Auckland.

“The Prime Minister today revealed he’s not seen any reports on the economic value to NZ of keeping some of that work inside New Zealand. It shows this government has no commitment to keeping a skilled rail engineering workforce in this country, or reducing unemployment in manufacturing.

“KiwiRail recently chose China CNR Corporation (CNR) as its preferred tenderer to supply 300 flatdeck wagons, which raised more questions about Kiwirail’s and the government’s real intentions for New Zealand’s rail engineering industry. The decision to choose China’s CNR as the preferred tenderer didn’t take into account the wider economic benefits and spin-offs for New Zealand of using KiwiRail’s own staff at the Hillside Workshops in Dunedin and at Woburn in Lower Hutt to do the work”.

She said the Hillside and Woburn workshops, along with the engineering cluster groups in Dunedin and Wellington have proven they are capable of undertaking a large part of this work at competitive prices and at high quality.

Since this post, KiwiRail CEO Jim Quinn has said: “KiwiRail has had no involvement with Mr Wong during any of the procurement processes we’ve run for locomotives, wagons or the new Auckland EMUs.”




  1. Matt L says:

    There has definitely the impression of something fishy going on in the tender process and hopefully the Auditor General actually looks into that and can get to the bottom of it. If the government have got involved and it comes out then I imagine there would be huge political ramifications for them.

    I am also a bit torn, I want these new trains here as soon as possible but I also want us to ensure we are not buying trains from one place just to help diplomatic relations, they need to be the best trains for the job.

  2. DanC says:

    I want the trains built in NZ. And be world class. Is NZ up to the job? And to note that after the main build is complete some those employed would have to move on.

  3. signalhead says:

    We are drinking from a poisoned chalice with all these huge Chinese contracts, we can’t forget that China is still a highly corrupt country (before you get all up in arms see Transparency International).
    We should either vet high risk companies or bar companies at the first whiff of dodgy dealings to send a clear message.
    The Sanlu milk scandal is a prime case of how careful we all need to be when doing business with countries with value systems and cultures so different to our own least we all get burned.
    I’m not saying New Zealand is perfectly squeaky clean but I think you get the message

  4. Andu says:

    ”We are drinking from a poisoned chalice with all these huge Chinese contracts…”

    Couldn’t agree more.

    Surpirse Surprise the tendering process is tainted and a Chinese company is involved.

    So I wonder are the EMU’s going to be delayed again by this governments incompetence?? another 2 years maybe??

  5. Jon Reeves says:

    Give Auckland something quality from Bombardier, Siemans or another first world manufacturere. Steven Joyce, we don’t want cheap and nasty in our Super City. But in anycase, thanks Minister for putting a spanner in the works.

    Another reason not to vote for you, thanks to your incompetence on transport matters.

  6. Doloras says:

    Wait, this time it’s not Joycey who’s trying to derail Auckland’s electric trains, it’s Labour. Talk about a selfish appeal to the Auckland-hating heartland.

  7. Patrick R says:

    Really Doloras? How do you figure that one? Without Joyce intervening we would be getting new EMUs this year, owned by AT and paid for both locally and from the most logical method. One that not only efficiently funds the transition to low carbon transit but also helps incentivise it through price signal.

    Labour were slow to get it but not complete boof-heads like this lot of oil fantasists.

  8. Donald Neal says:

    Um, Auckland isn’t looking for first-world rail equipment.. From memory the required top speed was 130km/h. If you ask for specs well short of the products of firms like Siemens or Stadler, they’re not the makers you expect to end up with.

  9. greenwelly says:

    @Patrick R: re EMUs running in 2011

    That’s not what Michael Cullen said in the 2007 Budget

    “The aim is to have electrification completed by 2013. The government has investigated the possibility of having electric trains up and running for the Rugby World Cup in 2011, but this would be too risky and costly in terms of sourcing material for electrifying the system and buying rolling stock”

  10. Matt L says:

    Donald - the original ARTA EOI had the top speed at 110 kph with questions as to how much it would extra it would cost to build them to 130kph however when Kiwirail took over they dropped the 130kph question.

  11. Matt says:

    Doloras, you’d rather the deal went ahead even if it’s been awarded due to corrupt behaviour?

    I want the trains ASAP, but not if it means potentially compromising quality and safety because the successful bidder wasn’t successful purely from a price-and-quality measurement.

    Labour’s appealing to the “We don’t do that kind of thing in New Zealand” crowd, I feel.

  12. Doloras says:

    The question of corruption is an important one, but many commentators are working from a… well, “prejudiced” assumption that anything that comes out of China must be ipso facto crap.

    Trevor Mallard has a track record of making interventions into PT debates to embarrass the government even when he’s got his facts wrong. Who remembers him yelling about how good honest Kiwi Snapper was being rejected in favour of nasty French Thales?

  13. Owen Thompson says:

    Didn’t realise being loyal to New Zealand was a crime.

  14. Doloras says:

    What an ironic considering the weight of opinion in many pro-PT comments blogs that Auckland is being screwed over by “New Zealand” and might be better off seceding.

    As I point out - NZ-based Snapper is a ripoff and the Thales bid was far superior. If stuff can be made overseas cheaper and better, then let’s do it and spend the leftover money on our own people. In the immortal words of the old Skitz TV show, if that makes me an unpatriotic Asian, so be it.

  15. Matt says:

    Doloras, at some point the headline price must cease to be the only consideration. The costs to the economy of losing skills, losing capability, taking money out of domestic circulation, etc, etc, all add up. It’s not a zero-cost option to purchase overseas, no matter how much the ideologues would like you to believe otherwise.
    Sure if it’s going to cost you 50% more to go local then you may be better off going offshore, but maybe not if it’s a high initial cost with ongoing lower costs that will end up making the domestic option price-competitive as well as competitive on the basis of the benefits to the economy. However, we never hear about that calculus, we only hear about comparisons on the basis of the dollars and cents printed on the tender documents.

  16. Simon says:

    Doloras - The Chinese manufactured EMUs may be of good quality but the fact is this tender process has been flawed (adding further tenderers AFTER a shortlist was already announced) and one of those latterly shortlisted companies having links to a man under investigation by the Auditor General. I think Labour rightly asks some questions about the EMU tender under those circumstances.

    Like yourself and many other Aucklanders, I am hanging out for those new EMUs but with this city having waited decades for these trains many of us want to be sure the best company and best EMU is chosen. Unfortunately, the way this tender has been conducted there are serious worries that this tender is not about the best EMU but about political relationships.

    And while not wanting to put down the Chinese tender applications, there is an important question I want you to answer Doloras. If the Chinese tender applications were good enough, then why were NONE of them in the ORIGINAL shortlist?

    The original shortlist featured four companies. Kiwirail obviously regarded them as the top four bids. Now not one of those companies is still bidding. That`s nothing short of a disgrace. The fact that NONE of them are still involved also leads to further suspicions that this tender has been politicized by the National govt.

  17. Starkly says:

    The implication that anything dodgy is going on in the tender evaluation is ridiculous.

    From the KiwiRail staff newsletter today:

    Sammy who?
    Opposition politicians and reporters have been trying for months to create a link between KiwiRail and Sammy Wong, the husband of former National Cabinet Minister Pansy Wong who resigned last year amid allegation of misuse of Parliamentary funds on official trips. The implication is that there is a link between Mr Wong, Chinese company CNR and KiwiRail. We’ve made it clear to everybody that KiwiRail has had no involvement with Mr Wong during any of the procurement processes we’ve run for locomotives, wagons or the new Auckland EMUs, but it’s not a message media or politicians want to hear. Yesterday, Labour’s Trevor Mallard called on KiwiRail to halt the EMU process until after the Audit Office had conducted an investigation. Again, it’s a case of not letting the facts get in the way of a story. The Audit Office has made it clear its investigation is focusing on Parliamentary rather than business issues. Who would have thought it’s election year?

  18. Patrick R says:

    My guess is that Sammy is a red heering in this, the real questions are around the bizarre and abrupt changes to the ‘short’ list, and their relationship to Key’s meetings in China….

    Be good to have someone be up front about this process, all we get is Joyce being smartarse. again, answering questions with cute little phrases that say nothing.

  19. signalhead says:

    Here’s one, get the same crowd that did the Wellington trains to do 25kv versions for Auckland. The standardisation of interchangeable parts would save time and money, large orders from the same company tend to attract lower prices not to mention better tech support.

  20. Simon says:

    Unfortunately Signalhead that would be an option if the two cities used the same type of electrical current but they don`t. Wellington uses an older type of current 1500DC whereas Auckland will use the newer 25000AC voltage. You could make a multi-voltage train and there are some examples in Europe but it would make the train price horendously more expensive therefore losing any advantage that might have been gained in piggybacking Wellington`s order.

    It would have cost a lot but really when they had the chance when new trains were needed in Wellington, they should have spent the money and changed their system to the 25000AC so that the same voltage type would have been in place in both cities and then large multi city orders could have been possible. It would`ve also meant they didn`t have to build so many extra substations as they have had to as required with the older 1500DC system. But that`s all history now.

  21. mark says:

    Yeez, by the time we get the trains, the shiny new overhead lines will have started rusting…

  22. Luke says:

    @signalhead Also Wellington trains are smaller than usual because of the tight tunnels around Wgtn.
    The Auckland carriages will be bigger and longer, so a 6 car EMU can carry many more than a 6car SA.

  23. minga says:

    Apart from the cost, changing the power supply in Wellington to AC would have rendered the old DC trains unuseable. It also wouldn’t have been possible to change all of the Wellington Metro power supply and trains overnight, so there would have been a long period of no trains, (at least in certain lines/areas at a time)… which was clearly an unacceptable option.


Leave a Comment


XHTML: You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>