KiwiRail

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KiwiRail Holdings Limited
Company type State-Owned Enterprise
Industry Rail transport, shipping, property management
Predecessor Toll NZ
Founded1 July 2008 (2008-07-01)
Headquarters,
New Zealand
Area served
New Zealand
Key people
Peter Reidy (CEO), [1]
David McClean (Chair) [2]
Products Great Journeys New Zealand
ServicesRail freight
Inter-island ferries
Long-distance passenger rail
RevenueIncrease2.svg NZ$682.9 million [3]
Increase2.svg NZ$25.7 million (FY2018-19) [3]
Increase2.svg NZ-$324.9 million (FY2018-19) [3]
Number of employees
4,213 [4]
Divisions
Subsidiaries KiwiRail Limited
Website www.kiwirail.co.nz

KiwiRail Holdings Limited is a New Zealand state-owned enterprise (SOE) responsible for rail operations in New Zealand and operates inter-island ferries. Trading as KiwiRail and headquartered at 604 Great South Road, Ellerslie, KiwiRail is the largest rail transport operator in New Zealand. KiwiRail has business units of KiwiRail Freight, Great Journeys New Zealand and Interislander. [5] The company was formed in 2008 when the government renationalised above-rail operations (having previously renationalised the network in 2004) and inter-island ferry operations, then owned by Toll Holdings. In 2021, the government launched the New Zealand Rail Plan, with funding for rail projects to come from the National Land Transport Fund (NLTF), and with KiwiRail remaining an SOE but paying Track Access Charges (TACs) to use the network.

Contents

History

Background

Prior to the establishment of KiwiRail, rail transport in New Zealand has been under both public and private ownership. Government operators included the Public Works Department (1873–1880), New Zealand Railways Department (1880–1982), and the New Zealand Railways Corporation (1982–1990). New Zealand Rail Limited was split off from the Railways Corporation (which continued to own the land beneath the rail network) in 1990, privatised in 1993 and then renamed in 1995 to Tranz Rail. In 2004 Tranz Rail's rail, ferry and trucking operations were acquired by Toll Holdings and renamed Toll NZ, with the central government buying back the rail network outside of Auckland for $1 (the Auckland metro rail network had already been purchased by the government in 2001). The rail network then came under the New Zealand Railways Corporation (trading as ONTRACK). As part of this acquisition, Toll agreed to pay ONTRACK "Track Access Charges" (TACs) in exchange for exclusive network access for 66 years, subject to a "use it or lose it clause": if freight and passenger volumes fell below their 2002-2004 average for three or more years, Toll would lose its exclusive access. [6] The agreement set a base track access fee but left future track access fees open to negotiation between ONTRACK and Toll. [6] After several years of negotiations, the two parties could not come to an agreement on the amount that Toll should pay. [7]

Establishment of KiwiRail

Former Prime Minister Jim Bolger at a press conference at the launch of KiwiRail, July 2008. Jim Bolger at press conference.jpg
Former Prime Minister Jim Bolger at a press conference at the launch of KiwiRail, July 2008.
DXB 5143 stands at Wellington railway station platform 9 on 1 October 2008, at the official launch of KiwiRail by Prime Minister of New Zealand Helen Clark. This was the first locomotive to be painted in the KiwiRail livery. DXB5143 at Platform 9 wgtn 1stJuly2008.jpg
DXB 5143 stands at Wellington railway station platform 9 on 1 October 2008, at the official launch of KiwiRail by Prime Minister of New Zealand Helen Clark. This was the first locomotive to be painted in the KiwiRail livery.

On 1 July 2008, the government announced the purchase for $690 million of Toll Rail, the rail and ferry assets of Toll NZ, but not its trucking operation, which continued under the Toll brand. [8] The new company was named KiwiRail and launched on 1 October 2008 at a ceremony at Wellington railway station. [9] The New Zealand Railways Corporation then owned both KiwiRail and ONTRACK, with both companies merging to create one company that controls both rail and ferry operations and rail infrastructure. [10]

Former Prime Minister Jim Bolger became the first chair of the KiwiRail board, a position he held until 1 July 2010. Bolger's government had privatised New Zealand Rail Limited in 1993. A number of commentators, [9] including Winston Peters, view this as ironic. In response, Bolger acknowledged his involvement in privatising New Zealand Rail, remarking that "my life is full of ironies," [11] and added that "the world has changed." [9]

Splitting of land and operations

In 2011, KiwiRail proposed splitting its land and rail corridor assets from its rail operation assets. [12] On 27 June 2012 it was announced by the company that the value of the land and rail operations would be written down from NZ$7.8 billion to $1.3 billion, and KiwiRail would continue as the rail and ferry operator, while the New Zealand Railways Corporation would manage KiwiRail's land. [13] The de-merger took effect on 31 December 2012. [14]

10-year turnaround plan

A new DL class locomotive (9020), purchased as part of KiwiRail's turnaround plan. DL 9020 on MP4.jpg
A new DL class locomotive (9020), purchased as part of KiwiRail's turnaround plan.

In 2010 KiwiRail released a 10-year turnaround plan and significant government investment in support of this in the years following. In support of the turn-around plan, from July 2008 to December 2016 KiwiRail received over $2.1 billion of Crown investment, which was mostly spent on infrastructure and new rolling stock. [15]

The focus of the Plan is to increase rail traffic volumes, revenue and productivity, modernise assets and separate out the commercial elements of the business from the non-commercial. [16]

The plan included the following points: [16]

Two of KiwiRail's major customers, Mainfreight and Fonterra, invested heavily in rail-related infrastructure in line with the Turnaround Plan. Mainfreight has allocated $60 million for investment in new railhead depots, while Fonterra has invested $130 million in a new rail hub complex in Hamilton and another in Mosgiel. [19]

The plan has had mixed success, with company Chairman John Spencer stating in 2013 that for its first three years, rail freight revenue had increased by over 25%. [20] Similar progress in attaining new customers and increasing freight volumes has been made over the life of the Plan to date (other than with coal).

Steady and at times rapid progress has been made on the enabling parts of the Turnaround Plan, such as new locomotives and wagons, lengthening of the rail ferry and track destressing, but not always effectively.

The 10 Year Turnaround Plan was quickly undermined by a series of adverse events, including:

2017 update of the Turnaround Plan

Partially as a response to the events outlined above, in the 2017 budget the government announced a further $450 million in capital funding for KiwiRail, and that the company's operations would be placed under another major review, believed to relate to future funding models. The $450 million was earmarked for repairs following the 2016 Kaikōura earthquake and for further locomotive and rolling stock purchases. As part of the Turnaround Plan's agenda to standardise locomotives and wagons, in 2016 KiwiRail announced it would effectively switch off the NIMT electrification in late 2017 and replace the electric locomotives with an additional eight DL locomotives (additional to the 15 as reported in the 2016 Annual Report). [25]

On 30 October 2018 that capital funding was made available to by the new Labour-led Coalition government to refurbish 15 of the surviving 20 EF locomotives at the Hutt Workshops extending the service life by 10 years for their continued use, in line with the Governments energy and emissions policies, and while the government is also actively considering extending the North Island electrification for the first time since the 1980s. [26]

KiwiRail has made use of the Government's Provincial Growth Fund (PGF). In 2019 KiwiRail signed an agreement with the New Zealand Transport Agency, Palmerston North City Council to construct a road, rail and air distribution centre in Palmerston North, following a $40 million allocation to KiwiRail from the PGF. [27]

New Zealand Rail Plan

In 2019, the government began a "Future of Rail" review, and in December 2019 released a draft New Zealand Rail Plan, outlining changes it proposed making to the rail transport industry and KiwiRail specifically. [28] The draft plan proposes a number of major changes, the most significant being future funding of the rail network through the National Land Transport Fund, [29] and charging rail operators to use the rail network via Track Access Charges. A number of other projects are proposed under the draft plan. They include a new train control centre in Auckland, replacing two Interislander ferries and rolling stock. [29]

On 17 March 2020 KiwiRail released a tender for the supply of new mainline locomotives. [30] 2021 New Zealand budget allocated NZD$722.7 million to purchase new mainline locomotives, shunt locomotives and wagons. [31] In October 2021, Stadler Rail announced it had won the contract to supply 57 new locomotives for KiwiRail. [32] Stadler Rail stated the contract was worth 228 million Euros, [32] or NZD$403 million. [33]

The 2022 budget allocated $661.5 million to KiwiRail, with $312.3 million for improving the national rail network and $349.2 million for completing the replacement of "ageing" locomotives and freight wagons, including up to 29 new light-duty locomotives. The total government investment increases to $8.6 billion. [34]

KiwiRail business units

Freight

KiwiRail Freight is the company's largest business unit, making up the majority of KiwiRail's revenue with $390 million in the financial year ended July 2016. In the same year, KiwiRail moved around 18 million tonnes of freight and carried about 16% of New Zealand's total freight task (tonnes-km). [35] Traffic grew from 2017 to 2019, dropped sharply during the COVID-19 pandemic and largely recovered in 2022. [36]

Freight types: Timber and dairy products formed 60% of the tonnage moved in 2022. [36] Bulk commodities include coal, logs, milk (dry and wet), IMEX (import/export intermodal) and domestic intermodal freight. Formerly large scale freight types such as petroleum products have entirely been withdrawn, and fertilizer has almost disappeared. The freight trading revenue by sector, as per the December 2016 Half Year Report is: [37]

Rail freight depots: KiwiRail has a total of 17 rail freight depots. In the North Island, these are Whangārei, Auckland, Hamilton, Tauranga, New Plymouth, Napier, Whanganui, Palmerston North, Masterton and Wellington. In the South Island they are Blenheim, Christchurch, Ashburton, Timaru, Oamaru, Dunedin, and Invercargill. [38]

Inland Ports: KiwiRail serves a number of Inland Port yards, although does not own the tracks. These include Conlinxx (Wiri), Midland Port (Rolleston), Longburn International Freight Hub (Longburn, Palmerston North), Manawatu Inland Port (Palmerston North), MetroPort (Southdown in Auckland and Rolleston in Christchurch) and will include Ruakura (Hamilton) when it opens in 2019, [39] and Ports of Auckland's site at Horotiu in Hamilton. [40]

Sea Ports: KiwiRail has major freight yards and sidings at Lyttelton port Company (containers, logs, coal), Port Chalmers (containers), Southport (Bluff), Timaru, Port of Tauranga (Mt Maunganui and Sulphur Point), Ports of Auckland, CentrePort (Wellington), Port of Napier and New Plymouth. KiwiRail also has a joint venture with the Northland Regional Council to build a branch line (the Marsden Point Branch) to connect to Northport at Marsden Point. [41]

Anchor freight customers: Key anchor customers include Fonterra, Westland Dairy Products (Rolleston and Hokitika), Bathurst resources and the various freight forwarders including Mainfreight and port companies including Port of Tauranga.

Freight wagons: KiwiRail operates 4,855 wagons. An additional 120 wagons were acquired in the year ending 2016, with over 1,000 new wagons added since 2008. One of KiwiRail's stated aims is to progressively move towards standardized wagons, with the container flat-top being overwhelmingly the dominant type (carrying curtain sided swap bodies, liquid containers, Log cradles [42] and so on to meet almost all freight tasks). The Norwegian coupling is progressively being replaced with semi-automatic Janney coupler on all wagons.

Key freight routes:

Interislander

Re-branded along with KiwiRail Scenic Journeys as the single brand The Great Journeys of New Zealand in 2017, The Interislander is the company's second largest business unit. It operates ferry services across Cook Strait between Wellington in the North Island and Picton in the South Island. In the financial year 2012, $123.9M of KiwiRail's revenue came from the Interislander, with the majority of the Interislander's revenue coming from rail and road freight transport. [43]

Property and Corporate

KiwiRail is a major land owner in New Zealand, and manages over 18 thousand hectares of land, has in excess of 1,500 property assets with a combined value of over $965 million (Annual Report 2016). Increasingly, KiwiRail is pursuing a commercial approach to asset management, and in the 2016 financial year received over $18 million from property sales. [35]

Great Journeys New Zealand

Re-branded along with Interislander as the single brand The Great Journeys of New Zealand in 2017, it is the long-distance passenger transport subsidiary of KiwiRail, operating the Northern Explorer , TranzAlpine and Coastal Pacific . The passenger trains are predominantly patronised by tourists to NZ, with the exception of the Capital Connection, which is a commuter train.

In 2012, KiwiRail attempted to sell Tranz Scenic, [44] but was unsuccessful, and KiwiRail continues to run these services. The division is now experiencing rapid double-digit annual growth, due to the growth of Chinese tourism to New Zealand, so much so that KiwiRail in 2017 may purchase an additional eight carriages [45] to the 17 AK carriages purchased in 2012.[ needs update ]

In 2021, following a decline in tourism during the COVID-19 pandemic, KiwiRail announced the suspension of the Coastal Pacific and Northern Explorer as part of Project Restart '22. [46] [47] While it is currently, as of January 2022, unclear what direction KiwiRail intends to take, Project Restart suggests a shift to multi-day land-cruises, a form of Experiential tourism. [46] This decision, or potential decision, has been seen by many New Zealand-based transport advocacy groups as an abandonment of interregional rail by KiwiRail. Campaign for Better Transport described it as the "latest stage in the decline of what was once an extensive passenger rail service which serviced most of New Zealand". [48] An announcement is expected by July 2022. [46]

Tranz Metro

Until 2016, KiwiRail division Tranz Metro had the contract to operate the Wellington services but lost a bid to renew this contract in 2015. KiwiRail is sub-contracted by Transdev Wellington to provide and operate the diesel locomotives required to haul the Wairarapa Connection service.

Suburban rail passenger operations in Auckland and Wellington are contracted by their respective local governments and not operated by KiwiRail. In Auckland rolling stock is owned by Auckland Transport which has contracted operation to Auckland One Rail, while in Wellington rolling stock is owned by Greater Wellington Regional Council which has contracted operation to Transdev Wellington.

Infrastructure and Asset Management

KiwiRail Network replacing sleepers on the Main South Line at Blueskin Bay, Otago. Closest machine is a dynamic track stabiliser, followed by a Regulator, then a Continuous Action Tamper. Ontrack maintenance Blueskin Bay, Otago, NZ.JPG
KiwiRail Network replacing sleepers on the Main South Line at Blueskin Bay, Otago. Closest machine is a dynamic track stabiliser, followed by a Regulator, then a Continuous Action Tamper.

The KiwiRail Infrastructure and Engineering division, formerly known as ONTRACK, has three main areas of operation:

The network it is responsible for consists of:

Engineering

The Engineering division provides mechanical assistance to the Freight and Passenger businesses, as well as to Auckland Transport. Engineering maintains, refurbishes and occasionally builds rolling stock for the network.

In 2012, KiwiRail announced it was putting its Hillside Engineering division on the market. [53] and subsequently sold part of the division and transferred remaining work to Hutt workshops.

KiwiRail now operates the Hutt Workshops in the Hutt Valley of Wellington, along with a number of small wagon maintenance depots, for example, at Addington (Christchurch) and Frankton.

Stabling yards

Most rail operations are a 'there and back' service with motive power being held in a few key strategic locations. Motive power stabling yards are as follows:

  • Westfield (Auckland)
  • Frankton (Hamilton)
  • Palmerston North
  • Thorndon (Wellington)
  • Middleton (Christchurch)
  • Dunedin

Yards and facilities

Some of the more prominent rail facilities used by KiwiRail include:

Current rolling stock fleet

Locomotives

The table below lists only the current locomotives in service with KiwiRail.

ImageClassIntroducedNumber in classNumber in servicePower output (kW)Notes
DCP 4801 and DC 4346 approaching Templeton with a shunt bound for Lyttelton in December 2016.jpg DC 1978–198385161230Mainline diesel-electric. Fifty-two scrapped, six preserved, six sold overseas, 2 sold at auction and three stored. Sixteen classed as DCP.
TranzAlpine departing Springfield.jpg DF 1979–198130291800Mainline diesel-electric. Sub-classes: DFB (21) and DFT (9). Two under overhaul to DFB, and one scrapped.
DH 2868, DL 9095 and DL 9135.jpg DH 1978-197966672Heavy shunting locomotive.
DL 9020 on MP4.jpg DL 2010–202383732700Mainline diesel-electric.
NZR class DSC 2693 with a shunt in Ashburton.jpg DSC 1959–19677027315Light shunting. Thirty-four scrapped, two preserved, three stored and three owned by industrial owners.
NZR DSG 3114, Dunedin, NZ.JPG DSG 1981-19832424700Heavy shunting. One under overhaul.
NZR class DSJ 4004 shunting in Picton.jpg DSJ 1984-198554350Light shunting.
DXB5143 at Platform 9 wgtn 1stJuly2008.jpg DX 1972–197649472240Mainline diesel-electric. One scrapped, one stored, and two under overhaul. Sub-classes: DXB (14), DXC (32), DXR (2).
KiwiRail train from Feilding to Halcombe.jpg EF 1988–19892214300025 kV AC electric locomotives. Four stored, four scrapped and two under overhaul.
DM 2024 (planned)5703000Under order from Stadler Rail
Photograph of New Zealand TR class locomotive 874, in KiwiRail livery.jpg TR 1936–19789017138Light shunting, positioned in smaller yards and leased to industrial customers. Forty-four scrapped, twenty-eight preserved and one stored.
Carriages

The majority of passenger carriages in New Zealand are now owned by Auckland Transport, Greater Wellington Regional Council and Dunedin Railways. KiwiRail operates a small fleet of New Zealand built AK class carriages for long-distance passenger trains and heavily rebuilt former British Mark 2 carriages in several configurations, the S class carriages for the Palmerston North-Wellington Capital Connection [54] and the SR class carriages, which KiwiRail owns and leases for the Te Huia Hamilton to Auckland regional service. Twelve carriages are also being overhauled to replace the current S class carriages and will be deployed in two sets of six.

ImageClassNumber in classIn servicePassenger capacityNotes
AK carriage 172012–presentAK 63; AKC 10Used on the Tranz Alpine, Coastal Pacific, Northern Explorer services
SR class carriages 122021–presentSR x6 seat 50, SRC x3 seat 20 and SRV x3 seat 38Used on Te Huia service, Capital Connection services

Corporate governance

Executive Board [55]
David McLeanChair
Sue McCormack Deputy Chair
Ed Sims Director
Maryan Street Director
Rob JagerDirector
Rachel PinnDirector
Bruce WattieDirector
Liz WardDirector
Sina Cotter TaitDirector
Executive Team [1]
Peter ReidyChief Executive
Jason DaleChief Financial Officer
David GordonChief Capital Planning and Asset Development Officer
André LovattChief Infrastructure Officer
Andrew NortonChief People and Communications Officer
Vanessa OakleyChief General Counsel, Company Secretary and Property Officer
Helen RogersChief Strategy and Sustainability Officer
Siva SivapakkiamChief Operations Officer
Adele WilsonChief Customer and Growth Officer

See also

Related Research Articles

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<span class="mw-page-title-main">Hillside Engineering</span>

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DEV <i>Aratere</i>

DEV Aratere is a roll-on/roll-off rail and vehicle ferry operated by KiwiRail in New Zealand. Built in 1998 for the then private company Tranz Rail and lengthened in 2011, she operates four daily crossings on the Interislander service across Cook Strait from Wellington to Picton each day.

<span class="mw-page-title-main">Interislander</span> Ferry service across the Cook Strait

Interislander is a road and rail ferry service across New Zealand's Cook Strait, between Wellington in the North Island and Picton in the South Island. It is owned and operated by state-owned rail operator KiwiRail. Three roll-on roll-off (RORO) vessels operate the 50-nautical-mile route, taking about three hours to complete the crossing.

<span class="mw-page-title-main">New Zealand Railways Department</span> Government agency (1880–1982)

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<span class="mw-page-title-main">New Zealand DC class locomotive</span>

The New Zealand DC class locomotive is a type of diesel-electric mainline locomotive on the New Zealand rail network, operated by KiwiRail on freight trains, and formerly on long-distance passenger trains. The class was rebuilt from the DA class in the late 1970s and early 1980s, mainly in Australia. After the DA class, they were the most numerous class of diesel locomotive on New Zealand's railway network and remained numerically dominant until the mid-2010s when withdrawals began.

<span class="mw-page-title-main">New Zealand DF class locomotive (1979)</span>

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<span class="mw-page-title-main">Main North Line, New Zealand</span> Railway line in New Zealand between Picton and Christchurch

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<span class="mw-page-title-main">New Zealand Railways Corporation</span>

New Zealand Railways Corporation (NZRC) is the state-owned enterprise that owns the land beneath KiwiRail's railway network on behalf of the Crown. The Corporation has existed under a number of guises since 1982, when the old New Zealand Railways Department was corporatised followed by deregulation of the land transport sector. In 1986, the Corporation became a State-owned enterprise, required to make a profit. Huge job losses and cutbacks ensued, and the rail network, rail operations and ferry service of the Corporation were transferred to New Zealand Rail Limited in 1990. The Corporation retained ownership of the land beneath the railway network, and charged a nominal rental to New Zealand Rail, which was privatised in 1993, and renamed Tranz Rail in 1995. In 2004, following a deal with Tranz Rail's new owners Toll NZ, the Corporation took over responsibility for maintaining and upgrading the rail network once more, trading under the name ONTRACK. Negotiations with Toll over track access charges concluded after four years with no agreement reached, so the government purchased the entire rail and ferry operations, naming the service KiwiRail. ONTRACK's railway infrastructure and employees were then transferred to KiwiRail in 2008, which itself was initially a subsidiary of the Corporation. On 31 December 2012, the Corporation once again became the landowner.

The Hutt Railway Workshops is a major railway engineering facility in the Lower Hutt suburb of Gracefield in the Wellington region of New Zealand's North Island. It is state-owned enterprise KiwiRail's only workshops, and was opened in 1930.

<span class="mw-page-title-main">Lyttelton railway station</span> Railway station in New Zealand

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<span class="mw-page-title-main">New Zealand British Rail Mark 2 carriage</span>

The New Zealand British Rail Mark 2 carriages were built by British Rail Engineering Limited for British Rail in the early 1970s. From the mid-1990s, 150 were exported to New Zealand. After being rebuilt, refurbished and re-gauged, they entered service with a variety of operators on New Zealand's railway network. The carriages generally replaced older NZR 56-foot carriages, some of which had been in use for almost 70 years.

<span class="mw-page-title-main">New Zealand DL class locomotive</span>

The New Zealand DL class of diesel-electric locomotives was manufactured for KiwiRail by CRRC Dalian with engines from MTU. They are the most powerful diesel-electric locomotives in service in New Zealand.

<span class="mw-page-title-main">Great Journeys New Zealand</span> Tourism division of KiwiRail

Great Journeys New Zealand is the tourism division of KiwiRail that operate its three Scenic train services. The new division was launched in May 2017 and replaced the former tourism brand KiwiRail Scenic Journeys. It has continuity with the earlier InterCity Rail (1987–1995) and Tranz Scenic (1995–2011).

References

Citations

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Bibliography

  • KiwiRail Locomotive and Rolling Stock Register – 2011. Mosgiel, New Zealand: Triple M Productions. 2011. ISBN   978-0-9582072-2-5.