the backbone

2013
THE BACKBONE
Contents
KiwiRail Overview
2
Connecting NZ with the World
3
Corporate Profile
4
Structure4
Board
5
Executive Team
5
Our Progress
6
Strategy for Success
8
Sustainability and Safety
10
Our Operating Divisions:
Freight
12
17
Infrastructure & Engineering
Interislander
19
Passenger
20
Our History
22
Chronological History of New Zealand Rail
23
Glossary25
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KiwiRail Overview
KiwiRail is a State Owned Enterprise and the backbone of New Zealand’s integrated transport network.
Our vision is to be a world class mover of freight and people by rail and ships, and to be the natural choice
for our customers in the markets in which we operate.
KiwiRail has four business units:
▪▪ Freight provides rail freight services and
locomotives for passenger services
▪▪ Infrastructure and Engineering maintains
and improves the rail network, controls
the operation of trains on the network, and
operates the heavy workshops that refurbish
and maintain our rolling stock
Whangarei
Dargaville
AUCKLAND
▪▪ Interislander operates the ferry passenger and
freight services
▪▪ Passenger provides urban passenger services
in Wellington under contract to the Greater
Wellington Regional Council through the
Tranz Metro team, and the KiwiRail Scenic
team operates the long distance passenger
rail services.
Tauranga
Hamilton
Kawerau
Kinleith
Te Kuiti
Taumarunui
New Plymouth
Stratford
Waiouru
Gisborne
Napier
Whanganui
Operations
Each week, train control operations manage
the movement of:
▪▪ 900 freight trains
▪▪ 44 inter-city passenger trains
▪▪ Approximately 2,200 suburban
passenger services in Wellington
▪▪ Approximately 2,000 suburban
passenger services in Auckland.
Otaki
Masterton
Featherston
WELLINGTON
Picton
Blenheim
Westport
Reefton
Greymouth
Kaikoura
Hokitika
In a year, Interislander manages
4,600 sailings carrying:
▪▪
▪▪
▪▪
▪▪
Dannevirke
Palmerston North
Rolleston
CHRISTCHURCH
Ashburton
755,000 passengers
53,000 rail wagons
73,000 trucks
212,000 cars.
Timaru
Oamaru
Port Chalmers
Wairio
Invercargill
Bluff
DUNEDIN
Assets
▪▪
▪▪
▪▪
▪▪
▪▪
▪▪
▪▪
4,000 kms track
1,656 bridges
18,000 ha of land managed
198 mainline locomotives
4,585 freight wagons
2 owned and 1 leased ferry
4,200 staff approximately.
Further Information
For assistance, publications or information concerning KiwiRail please visit our website at
www.kiwirail.co.nz or contact: KiwiRail Communications, PO Box 593, Wellington, 6140
P: 0800 801 070, E: [email protected]
Connecting NZ
with the World
KiwiRail is New Zealand’s national rail company
and one of the country’s largest transport
businesses. Our vision is to be a world class
mover of freight and people by rail and ships,
and be the natural choice for our customers in
the markets in which we operate.
Our role is vital to New Zealand’s economic growth.
Our freight trains move more than 30 percent of
New Zealand’s exports and our 4000km network
has links to all the major import and export
ports. We are also expanding our intermodal
network by managing and utilising inland ports
and encouraging our customers to locate major
transport hubs next to the rail network. We are
continuing to optimise our competitive, natural
advantage in moving heavy and bulk freight such as
containers, coal, dairy products, meat, aluminium,
steel and forestry products.
KiwiRail ferries provide a vital link between the
North and South Islands for both freight and
passengers. In Auckland and Wellington, rail
is becoming increasingly important as a way of
moving people in and out of cities.
KiwiRail’s long distance scenic trains are
becoming increasingly popular – particularly
with overseas visitors - for the opportunity they
provide to see New Zealand’s natural beauty in a
relaxing environment.
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Rail in New Zealand and around the world is
undergoing a renaissance due to its competitive
advantage in roles such as:
▪▪ The transport of bulk commodities such as
coal, milk, dairy products, logs and steel
▪▪ Import-export goods – largely containerised
goods moving to and from major ports
▪▪ Long-distance containerised goods between
major cities
▪▪ Urban transport in Auckland and Wellington
and between their nearest cities.
Rail is a cost effective means of moving bulk
goods long distances. It is also recognised as
being between three and seven times more
energy efficient as a form of transport than road,
and has significant safety benefits, being two to
three times safer than heavy road transport for
the same freight task.
We are committed to propel our vision forward,
offering our customers competitive options
to help their and our business. We are going
to great lengths to provide superior value and
service for our customers. Through significant
investment in infrastructure and rolling stock we
are helping to improve New Zealand’s integrated
transport network.
Corporate Profile
KiwiRail is the owner of a business with a long and
proud history of service to New Zealand. We need
no introduction, but there is still much that
New Zealanders don't know about us.
▪▪ More than 30 percent of rail freight traffic
is import-export goods.
Most know that we are one of New Zealand's
biggest freight movers. But it comes as a surprise
to many that we are one of the country's biggest
tourism operators and one of the most significant
property owners and developers.
▪▪ If the freight traffic that travels on rail
was transferred to road, it would add an
estimated one million more truck trips a
year to the roading network.
On one hand we are a new company bringing
the different elements of the rail industry back
together; on the other, an established business
with a strong New Zealand history.
Many years of under-investment have reduced
rail's competitiveness. Our challenge today is to
improve the quality of our assets and services
and to compete on even terms with other modes
of transport while also cooperating with other
players to create solutions for customers. The
more successful we are in meeting this challenge,
the greater the contribution we will make to the
New Zealand economy.
Our aim is to grow the business by making the
most of rail's natural advantages - moving bulky
goods, linking export industries to major ports
and moving people through congested cities.
Rail is vital to New Zealand's export and domestic
industries. We move 33 percent of the country's
export goods.
▪▪ One milk train carries the load equivalent
of 28 road tankers.
▪▪ The Ministry of Transport predicts rail
freight traffic will grow by 70 percent over
the next 20 years.
▪▪ Auckland-Tauranga is the country's
busiest rail freight route. Forty percent
of the freight moving to and from Port of
Tauranga travels by rail.
▪▪ The $600 million upgrade of the
Auckland suburban network will enable
six trains an hour (approx 10 minute
services) to operate.
Major investment is underway as:
▪▪ Railway locomotives are on average 30
years old; wagons average 20 years.
▪▪ Approximately 200 km of the 4,000 km
rail network is approaching the end of
its predicted life.
▪▪ Thirty-three percent of railway bridges
are 80 or more years old.
Structure
Shareholding Ministers
KiwiRail Board of Directors
Jim Quinn, Chief Executive
Iain Hill
GM Freight
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Deb Hume
GM
Passenger
Thomas Davis
GM
Interislander
Rick van
Barneveld
GM I&E
David Walsh
GM Corporate
& Finance
Matt Ballard
GM People
& Safety
Board
John Spencer, Chair
John Spencer is a
Wellington-based
businessman and
company director.
His background
includes a period as
the Chief Executive
of NZ Dairy Group
- one of the two dairy companies that
merged to form Fonterra. He retains
his interest in the dairy industry with a
seat on the board of DairyNZ. He has
been Deputy Chairman of Solid Energy,
one of KiwiRail’s largest customers
and he led the merger of Asure NZ Ltd
and AgriQuality Ltd in 2007 to form
AsureQuality Ltd. John is also Chairman
of Tainui Group Holdings Ltd and WEL
Networks. He serves on the board of
Tower Limited and Dispute Resolutions
Ltd. He is also an Independent Advisor to
the Board of Mitre 10 Group.
Paula Rebstock,
Deputy Chair
John Leuchars,
Director
Rebecca Thomas,
Director
Bob Field,
Director
Guy Royal,
Director
Dr Kevin Thompson,
Director
Iain Hill,
GM Freight
Thomas Davis,
GM Interislander
Executive Team
Jim Quinn,
Chief Executive
Jim Quinn joined
KiwiRail as Chief
Executive in March
2009. Previously,
he had been Chief
Executive Officer of
Express Couriers
Limited, a joint
venture between New Zealand Post
and DHL. He brings to the rail industry
experience from work in the postal,
electricity, information technology and
transport sectors as well as a strong
customer service dimension from the
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David Walsh,
GM Corporate
& Finance
Rick van Barneveld, Dr Deborah Hume, Matt Ballard,
GM Infrastructure GM Passenger
GM Safety &
& Engineering
People
Our
Progress
After decades of underinvestment and neglect KiwiRail
has been implementing an
investment programme to
ensure the business can deliver
the highest levels of service
expected from our customers.
We’ve made huge strides
towards achieving this with
$1.8 billion invested in network
improvements. We’ve expanded
our freight operations year on
year to entice businesses to use
rail freight more. New rolling
stock, the extension of the
Aratere and major upgrades to
the network mean our services
are more reliable and frequent
for our customers.
We’ve also invested significantly
in improving passenger
services. Major upgrades to
the Auckland and Wellington
metropolitan networks have
been completed on time and on
budget and we have introduced
new carriages on all our
KiwiRail Scenic trains.
These initiatives have
underpinned our performance
as a business. Overall revenue
growth of more than 7% for
2011/12 is a commendable
effort given the difficult
economic conditions. Freight
has been particularly
successful, achieving revenue
growth of 25% over the last
two years.
That money gets reinvested
straight back into the business.
Over the next three years
more than $750 million will be
invested in the rail network –
around four times of that spent
during 2005-2008.
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INFRASTRUCTURE
Rail Line Improvements
Network Investment ($m)
250
200
200
150
150
100
100
50
50
0
2008/09
2009/10
2010/11
0
2011/12
2008/09
2009/10
2010/11
2011/12
New rail laid (km)
Line de-stressed (km)
New sleepers laid (000)
PERFORMANCE
Revenue and EBITDA Growth
KiwiRail Group
KiwiRail Freight
500
800
400
600
300
400
200
200
0
100
2008/09
2009/10
2010/11
0
2011/12
2009/10
2010/11
Revenue (m)
Freight Revenue (m)
EBITDA (m)
Freight EBITDA (m)
PEOPLE AND SAFETY
LTIFR and MTIFR
8/9
9/10
10/11
11/12
LTIFR
3.47
6.56
6.10
6.10
MTIFR
43.17
45.00
49.10
46.90
Level Crossing Collisions
40
Vehicles
Pedestrians
30
20
10
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2011/12
ROLLING
STOCK
535
20 48
New
world class
scenic
carriages
New wagons and more to come
260
20 DL
locomotives
in operation
and
New intermodal containers
on
order
Freight Carried
New Matangi
two car sets in
Wellington
On Time Performance
17,500
100%
17,000
* Reduction due to Aratere commissioning.
Currently at 85%.
90%
16,500
80%
16,000
15,500
70%
15,000
60%
14,500
50%
14,000
2008/09
0%
2009/10
Freight - Premium Train
2008/09
Net Tonnes
2009/10
Interislander *
2010/11
Tranz Metro
2011/12
Mainline derailments
60
50
Mean Distance Between Failures*
40
45,000
30
40,000
20
(KMs)
35,000
30,000
10
25,000
0
20,000
02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12
Engagement
15,000
10,000
2009
2010
2011
2012
Staff Response Rate
54.6%
58%
72.9%
76.4%
Staff Engagement Index
69.2%
69.3%
70.4%
68.0%
5,000
0
2009/10
2010/11
2009/10
2010/11
2011/12
* A measure of reliability that expresses the average distance travelled
before repair or preventative maintenance is required.
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Strategy
for Success
Rail’s role in the New Zealand economy is very
different from the days 150 years ago when
trains first started running. It’s even changed
significantly in the last 50 years. That means the
way we plan our business must adapt to changing
times and changing circumstances.
At its most basic, it involves focusing on the
movement of freight – on rail and ferry – along
KiwiRail’s routes of national significance.
A secondary focus is on containing and effectively
1
Growth in freight volume and
revenue quality is essential
Freight is critical for KiwiRail’s journey
to financial sustainability. It currently
generates more than 60 percent of
KiwiRail’s revenue from carrying bulk
commodities, import-export goods and
domestic freight. The predicted near
doubling of the freight task over the
next thirty years and the opportunity to
continue to increase rail’s market share on
some routes reinforces its importance to
the business.
During 2011 the Freight business took
direct control of the maintenance of the
KiwiRail rolling stock fleet. This ensured
that the maintenance part of the business
was even more closely aligned with the
needs and priorities of our customers.
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managing those parts of the business that are
essentially non-commercial.
The rail industry differs from road in the length
of its investment timeframes. Locomotives and
wagons have working lives of 30 years or more.
Bridges and tunnels can last 100 years.
This tells us that although the business planning
period is three years, our own planning and
investment horizons must be much more distant.
Key elements of our future business approach
are as follows:
2
We need to improve and
maintain a sustainable
connected network
The national KiwiRail network extends
over 4,000 km – a mixture of main lines,
secondary lines and minor lines.
Growing the business depends on
maintaining a connected and financially
sustainable network.
After investing $192.0 million in 2012,
we plan to invest $163.6 million in 2013,
$132.1 million in 2014 and $178.0 million
in 2015 in infrastructure renewals and
upgrades to improve reliability and speed
on the core network.
3
Investing in our people and
improving performance
An aligned, safe and engaged workforce
is critical to the successful delivery of
our strategic plan. We have completed
an independent review of our human
resources and safety strategies and this
has produced key strategic priorities that
work together to support KiwiRail’s vision
and strategic plan. These interconnected
themes centre on building a safe
service-oriented culture that focuses
engagement, performance, productivity
and personal accountability.
We are continuing the drive to achieve
a zero harm workplace across all our
businesses under the guidance of
the newly established role of General
Manager, Safety and People.
4
A commercial focus for
metro passenger
In the last year the full implementation
of the Metropolitan Rail Operating Model
was achieved. This seeks to put metro rail
on a sustainable basis, allow operating
services to be fully contested, and ensure
KiwiRail does not subsidise the operation
of networks for commuter services in
Wellington or Auckland.
KiwiRail’s focus is now on achieving our
performance objectives including further
improvements in on-time performance
and levels of customer service, leading
to improved customer ratings and
increasing patronage.
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5
Driving productivity
improvements
We have continued to focus on improving
productivity in the past years and the
investments made to date and on-going
plans are expected to generate tangible
improvements in performance.
6
Challenging the support
services model
We are in the process of completing a
review of support functions (Information
Systems, Human Resources, Finance,
Property and Legal) to determine the
most efficient manner for delivering
these services across the business.
The review has focused on:
•
Understanding what support
functions are currently undertaken
across the business
•
Identifying which activities should be
retained in the business and which
make more sense to be operating in a
centralised manner
•
Focusing the business unit support
on value add and strategic activities
rather than transactional processes
•
Aligning the cost of providing support
functions to the expected financial
performance of the business.
Sustainability and Safety
A Sustainable and Responsible Business
KiwiRail is an economically responsible
organisation that is transparent in its reporting
processes; environmentally responsible in its
commitment to reduce emission, waste and
energy consumption; and socially responsive
through community education and involvement.
As a significant player in the national transport
industry, KiwiRail recognises the need to
balance its role in providing an efficient, safe,
commercially viable and sustainable transport
system with the need to effectively manage both
social and environmental performance. Getting
this balance right is vital for KiwiRail’s ongoing
growth and future.
As KiwiRail grows and supports the needs of
customers, we continue to stimulate the economic
development of communities in which we operate.
Corporate environmental responsibility means
engaging in management practices that safeguard
for future generations both the ecosystems and
natural resources which may be affected by
our operations.
Whether you are transporting export logs to
port, commuting to work in our larger cities,
passing the Southern Alps or sailing through
the Marlborough Sounds by choosing KiwiRail's
freight and passenger services you are making a
sustainable choice. Rail is a key part of
New Zealand's integrated transport system
providing a fuel efficient and low carbon means
of moving goods and people.
Sustainability for KiwiRail starts with financial
sustainability. By providing an accessible and
reliable rail service we will be helping to reduce
the transport industry's overall impacts on the
environment and communities.
As a freight service KiwiRail helps your business
to reduce the carbon footprint of your products.
KiwiRail performs a vital role in stimulating
economic development in all the regions of
New Zealand in which we operate. This includes
providing employment, improving and developing
transport infrastructure and enabling industries to
move their products through the supply chain.
For local and international tourists KiwiRail is a
significant part of New Zealand's tourism industry
we are able to provide you with more sustainable
travel options by which to enjoy our country.
In Auckland and Wellington we are an essential
part of the sustainable transport network helping
to alleviate congestion, improve air quality and
reduce your personal carbon footprint.
Some of our initial focus areas include:
▪▪ Developing systems to enable "live"
monitoring of onboard fuel consumption
on our Interislander ferries.
▪▪ Adding new DL locomotives to our fleet
with improved energy efficiency and
higher emission controls.
▪▪ Introducing GPS to our vehicle fleet
to gain a better understanding of
opportunities to save fuel.
▪▪ Providing recycling facilities at the
Wellington Railway Station, onboard the
ferries and at the ferry terminals.
▪▪ Assessing the type and volumes of waste
from infrastructure activities to reduce
waste to landfill.
▪▪ Reducing electricity usage in our
buildings through a combination of
staff awareness and improvements to
our facilities.
▪▪ Reviewing our supply chain and putting
in place measures to make more
sustainable purchasing decisions.
▪▪ Combining our Auckland offices into a
single sustainably designed office
reducing interoffice travel and the
overall impact of our office functions.
KiwiRail has become a member of the Sustainable Business Network to show
its commitment to sustainability in New Zealand business.
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Safety Focus
Safety is paramount in the rail and ferry industry
- both the safety of our own staff and passengers
we carry, and the safety of the general public.
By its nature the rail and ferry industry is an
unforgiving workplace. We try to counter the
inherent risks and give our staff and contractors
a safe working environment through the
provision of training, safety equipment, and
specialist safety staff.
Public safety on the other hand, often relies on
the actions of individuals who are outside of our
control. KiwiRail attempts to encourage certain
types of behaviour to improve the safety of the
rail and ferry environment.
This includes providing rail safety education
programmes, conducting anti-trespass
initiatives, and upgrading public level crossings.
There are approximately 1400 public road level
crossings in the country and 85 standalone public
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pedestrian crossings. Around 700 road crossings
have either barrier arms or flashing lights and
bells - the others are protected by stop or give
way signs.
The crossings we upgrade meet an objective test
based on the volume of road and rail traffic, the
collision history of the crossing and any other
relevant factors like visibility along the line.
KiwiRail is a major sponsor of the Chris
Cairns Foundation, which aims to raise public
awareness of the responsibilities at public level
crossings. It was formed in 2006 by international
cricketer Chris Cairns, whose sister Louise
died in 1993 when a train she was travelling in
collided with a truck at a level crossing near
Rolleston, south of Christchurch.
The Foundation focuses on education
campaigns to help people understand the
dangers associated with level crossings and
the rail network.
Freight
Freight is by far the major KiwiRail business
unit revenue earner, earning up to 70 percent of
revenue when goods carried by ferry is combined
with rail freight.
Each week Freight operates approximately 900
services around the country. Commercial and
customer service teams are predominantly based
in Auckland with representatives at each of its
major depots around the country. Rail operation
is managed through three regions: Northern,
Central and Southern.
convert freight movements off road and onto rail.
Broadly speaking there are three key freight
markets in which rail, as a freight transport
option competes in New Zealand. Each of these
segments is characterised by their own marketunique drivers and circumstances, which in turn
determines the applicability of rail as a
transport solution.
Segment Revenue
The Interislander ferry service forms a key part
of the national rail network and the three ferries
provide important value options in terms of rail
and freight capacity across the Cook Strait.
KiwiRail works with major customers both to
meet changing freight volume patterns and to
Bulk
IMEX
Domestic
Other
Bulk
Bulk commodities are well suited to rail where
there is an intrinsic ability to carry large
consignments and make use of the benefits of
scale. KiwiRail already moves almost 70 percent of
coal volumes. Trials have demonstrated rail’s ability
to carry the projected increased coal volumes from
the West Coast to Lyttelton.
Rail moves more than 40 percent of export dairy
product and provides an essential alternative
to road. There is a significant opportunity for
greater use of rail within this sector. Similar
opportunities exist with steel and forestry where
rail’s share of the bulk market remains below 50
percent. With forests maturing throughout
the country over the next three to five years,
a significant uplift in log volumes moving on
the rail network is expected.
Freight movements by commodity groups
- all modes
Dairy
Meat
Coal
Pulp
Timber
Other
Freight Forwarding
Manufactured Goods
Iron & Steel
Import and Export (IMEX)
Heavier commodities, which tend to be moved in
large quantities, lend themselves to rail, where
superior axle load capacities can more efficiently
transport large and heavy consignments.
In the containerised market rail currently has a
competitive advantage in that it can carry larger,
heavier containers and multiple containers on
a single train. There is plenty of opportunity to
develop this market further through greater
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integration of land transport planning including
consolidation of ports and the development of
inland ports and hubs.
Ongoing rationalisation and deployment of larger
vessels into New Zealand will see fewer ports
serviced and more import/export cargoes hubbed
around the country via rail and coastal shipping
to connect with these services.
Domestic
The domestic market is defined as all other
products that are transported on the rail network
whose end destination is not directly for an
international market, or alternatively is moved
in quantities that do not warrant an individual
tailored service, such as those provided to the
bulk market. While the majority of this market
is of products fit for immediate domestic
consumption or use, there is a broad array of
other commodities that are transported under
this banner - grain, steel, fuel for example.
With consolidation in the road transport industry
likely, there is significant opportunity to make
greater use of rail within this sector.
Market Segment
Bulk (coal/
forestry/minerals)
Export
(import/export)
Domestic (retail/
wholesale) (FCI/LCL)
Timeliness
Less important
Important
Critical
Load
Wagon Loads
- up to full train
Containers
- single to multiple
Smaller Loads
- (consolidated as wagon
or container loads)
Distance
up to 400km
up to 400km
300 to 1200km
Total NTK (000)
1,751,611 (43%)
953,534 (24%)
1,229,121 (31%)
Nett Tonnes
8,008,451 (54%)
4,387,410 (30%)
1,960,516 (13%)
Market Segment
Volume of Freight Carried on the Network
Measure
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
4,505.3
4,567.4
3,962.0
3,919.0
4,178.0
4,581.0
NTK carried (millions)
Routes of National Significance
Route
13
Key Traffic
Auckland - Tauranga
Containerised export and bulk products
Auckland urban network
Commuters
Auckland - Christchurch
Containerised domestic goods
Overseas and local passengers
(Northern Explorer and Coastal Pacific)
Waikato - Bay of Plenty
Wood and wood products - forestry lines
Oringi - Whareroa
Bulk milk
Wellington urban network
Commuters
Cook Strait
Containerised domestic goods
Passengers and cars
Westport - Lyttelton
Bulk coal International visitors (TranzAlpine)
Edendale - Port Chalmers/
Timaru/Lyttelton
Containerised dairy products and coal
The Backbone 2013
National Freight Demand Study
The Ministry of Transport National Freight Demand
Study (NFDS) forecast overall freight volume would
increase by 75 per cent in the next 17 years. While
modal share is predicted to remain relatively
constant, the sheer increase in freight volumes
will make rail an increasingly important part of
New Zealand’s transport system.
The table below is the NFDS prediction of growth
in commodity volumes that rail currently carries:
Growth
Product Group
85%
Dairy Products (incl Milk)
13%
Meat
151%
Logs and Woodchips
24%
Timber, Wood Products
and Pulp and Paper
223%
Horticulture Products
35%
Coal
557%
Chemicals, Fertiliser and Minerals
71%
Food and other Manufactured
Products
70%
Total expected growth in rail freight
Other findings included:
▪▪ Rail’s average freight haul is 283km, more
than double the figure for road (118km).
▪▪ Rail currently carries six percent of total
freight tonnes and 15 percent of total
tonne kilometres.
▪▪ The majority of freight movements
(73 percent) are within regions and are
not a natural market for rail.
▪▪ Rail has a significant share of some
commodities like dairy, meat and steel with
potential growth opportunities in other
areas like horticultural products, aggregate
and food products/forestry.
▪▪ Rail plays a critical role in inter-regional
freight movements.
▪▪ Freight traffic is predicted to increase by
75 percent by the year 2031 with rail freight
expected to grow by 70 percent over this
period maintaining relatively the same
market share as currently.
▪▪ The 70 percent predicted growth retains
status quo for rail’s current market share
and equates to rail tonnage growth from
13.7m to 23.1m during that time. Net tonne
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kilometres will grow from 3.9 billion to
6.6 billion.
▪▪ T
he study identified region and inter-region
growth opportunities. A number of the
identified growth regions are not areas rail
serves well.
▪▪ F
rom an infrastructure perspective the
study identifies that for rail, work is needed
on track, clearances, and axle loads (and
that work is underway). Line capacity is
identified as posing no real issue with lack
of wagons and locomotives hampering rail
growth opportunities at present but being
addressed as new rolling stock comes
into service.
▪▪ M
ajor growth in traffic needing to transfer
to and from rail will result in more terminal
space required, with potential land, facility
and consent problems. It is recommended
major cities should take decisions on
reserving railway-owned land for them now
and that Government should facilitate the
consent process in order to help the switch
from road transport.
Rolling Stock Renewal
The age and limited fleet size of both locomotives
and wagons has presented a major challenge
to grow the freight business. The youngest in
the current fleet of locomotives was 20 years
before the commissioning in 2011 of 20 new DL
locomotives. The average age of wagons has
been between 25-30 years, and most wagon axle
loads are only 14 tonne.
Although the fleet of locomotives was
refurbished in the early 1980s these are
considered underpowered and outmoded by
today’s standards.
Without new locomotives and wagons
opportunities to convert more freight to rail
would have been at risk.
A priority for the business has been to add new
wagons able to carry heavy loads and maximise
capacity of each service. A fleet of 100 new
container wagons, with higher axle loads and a
longer base was added to the fleet in late 2008.
The majority of these are being used on the
KiwiRail and Port of Tauranga MetroPort service.
KiwiRail has around 4,300 wagons. About half
are container flat wagons, the rest made up of
specialised wagons for specific commodities –
coal, fertiliser, refrigerated goods, milk.
Over the next five years up to 2,000 heavy rated
container wagons are expected to be added to the
fleet. Within the next three years up to 300 48 foot
and 125 foot intermodal containers will also
be added.
Locomotives
Wagons
Number
Average
Age
Average
Axle
Loading
Container
Flat Wagons
2771
24
14T
Box
467
30
14T
19721976
Logs
356
30
14T
Coal
330
10
18T
Milk Tanker
66
18
18T
Flat General
130
35
14T
Infrastructure
179
30
14T
4 Wheelers
144
35
12T
Canopy
(e.g. steel)
142
22
14T
Reefer
36
20
18T
Grain /
Fertiliser
39
23
18T
Auto
21
25
14T
Total
Power
(kW)
Traction
(kN)
Original
Build
DL
20
2700
269
2010
EF
17
2984
256
1988
DXR
2
2238
280
Class
15
Around 70 percent of the container fleet was built
to a 1970 design and based on a 14 tonne axle
load capacity. Since 1970, container weights have
steadily increased and to stay competitive in the
modern market, an axle load of at least 18 tonne
is needed.
DXB
15
1940
280
19721976
DX
21
1940
185
19721976
DFMDFB
12
1828
240
1980
DFT
18
1828
175
1980
DQ
4
1119
175
1968
DC
54
1119
160
1965
DBR
6
709
85
1965
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Type
Movements by Mode
Road
Rail
Liquid milk
17,145
96%
4%
Dairy products
3,816
59%
41%
Logs and chips
21,600
94%
6%
Manufactured timber products
8,750
97%
3%
Livestock (all by road)
3,624
100%
889
57%
43%
Horticultural products
4,192
93%
7%
Aggregate
40,188
99%
Coal
6,399
36%
Petroleum products
9,020
75%
Aluminium and steel
1,853
80%
20%
Limestone, fertiliser, cement
and other minerals
12,187
88%
2%
Concrete (all by road)
8,949
100%
Meat
* Source: National Freight Demand Study, 2008
16
Share by mode %
Total volume
(000 tonnes)
Commodity
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Coastal Shipping
1%
64%
25%
10%
Infrastructre & Engineering
KiwiRail Infrastructure & Engineering is the
infrastructure management and maintenance
arm of KiwiRail responsible for managing the
national rail network. This business is also
responsible for the repair and refurbishment of
rolling stock.
In addition to maintenance, there are also
upgrades to the rail network, introducing totally
new assets or replacing existing assets.
It undertakes a range of activities to maintain the
network and provide rail operators with safe and
timely access.
In addition to the network maintenance work,
there is a programme of renewals - replacing
assets that have reached the end of their useful
life, for example timber bridges.
Major upgrade works over recent years includes:
▪▪ A deviation around the Kai Iwi tunnel
removing a major impediment to the
transport of the largest containers
used extensively for dairy produce
from Fonterra’s Whareroa plant in
south Taranaki.
Paekakariki were lowered to ensure larger
containers to pass through and increase train
speeds on the section of line.
▪▪ KiwiRail worked with the Northland Regional
Council to designate a rail link from the
North Auckland Line to Marsden Point.
While designation will secure the route and
give landowners certainty there is no date
set at this stage for building the link.
▪▪ The "day-lighting" of three tunnels at
the eastern end of the Manawatu Gorge
combined with the earlier lowering of the
floors in two long tunnels opened the way
for trains on the Palmerston NorthGisborne Line to also carry the larger
hi cube containers.
▪▪ Refurbishment of the Wairio industrial
line used for moving coal, principally to
dairy factories.
▪▪ Between late 2010 and early 2011, a series
of tunnels between Pukerua Bay and
▪▪ Refurbishment of the Auckland and
Wellington urban networks.
Measuring improvements to network infrastructure and performance
Measure
17
2006-07
2007- 08
2008-09
2009-10
2010-11
2011-12
New rail laid (km)
32
27.2
33.4
19.0
21.2
36.3
New sleepers laid (000)
102
103
103
53
106.1
104.5
Line de-stressed (km)
100
107
156
218
264
242
Bridges replaced (m)
562
555
947
550
411
523.8
Timber piers replaced
35
61
132
92
71
77
Derailments
48
45
36
41
24
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Auckland Rail Projects
There are three main components to the current
upgrading of Auckland’s commuter rail network.
Project DART – The $600 million suite of rail
infrastructure projects now nearing completion
that has increased the capacity of the network
to enable services to operate at roughly
10-minute intervals.
Electrification of the Auckland passenger rail
network – Including all lines between Swanson
and Papakura (up to $500 million).
Electrification of the Rail Network
Auckland’s commuter rail network will be
electrified between Papakura in the south and
Swanson in the north. Providing the infrastructure
for electrification is budgeted to cost $500 million
and is due to be completed in 2013.
The three main elements of work include traction
(overhead poles and wires and power supply),
signalling, and providing sufficient clearance
beneath bridges.
Rolling stock – KiwiRail has managed the
procurement process for a new Electric
Multiple Unit (EMU) fleet.
Project DART
The goal of this suite of projects has been
to enable six trains an hour on each of the
main suburban lines while still providing
for freight movements through the network.
The key elements included the duplication
of the Western line, the redevelopment of
Newmarket junction and station, construction
of the Manukau Rail link and the rehabilitation
of the Onehunga Branch Line.
The Manakau rail link was opened in late 2011.
Procurement of new Rolling Stock
The Government approved funding in November
2009 for KiwiRail to buy the fleet of electric
multiple units for the Auckland network. A fleet
of up to 38 EMUS comprising up to 114 cars each
with 240 seats will be delivered.
KiwiRail has worked closely with key stakeholders
in the Auckland region on the process. A contract
has been awarded to a consortium led by Spanish
manufacturer, Construcciones y Auxiliar
de Ferrocarriles.
Wellington Region Rail Programme
A total of $550 million has been invested to
improve the Wellington railway system to provide
more reliable passenger services. This has been
a joint programme between Greater Wellington
Regional Council which has ordered a fleet of
new electric multiple units ‘Matangi’ introduced
in late 2010 and KiwiRail Infrastructure &
Engineering which has led the upgrade of the
existing railway infrastructure to accommodate
the new trains and improve the overall reliability
of the network. This work has included
upgrading the power supply, signals and station
infrastructure around the Wellington region.
Work has also been carried out to increase
capacity of the network. All seven tunnels on the
Johnsonville line were made larger by lowering
their floors. Double tracking and electrification of
the North Island Main Trunk has been extended
to enable regular commuter services to travel to
Waikanae. This will more than double capacity
on this section of the line. At the entrance to
Wellington Railway Station, a third main line has
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been installed to reduce delays at a bottleneck
in the system where previously four main lines
reduced to two. Further work is planned to
improve ageing infrastructure on the
Wellington network.
Interislander
The Interislander provides freight and passenger
services across Cook Strait on three ferries:
Arahura, Aratere and Kaitaki. Arahura and
Aratere were purpose-built for New Zealand
conditions, containing dedicated rail decks for
rail freight. Kaitaki cannot accommodate
rail traffic.
engine capability, a new bow that creates less
wake in the Marlborough Sounds and improved
passenger capacity.
Increasing capacity on Cook Strait ferries,
particularly for rail freight, is a key component
of KiwiRail’s plan for business sustainability.
In April 2011, Aratere was taken out of service
so that a 30-metre extension could be fitted
to her mid- section. The result is a 30 percent
increase in freight capacity as well as improved
Interislander owns the Wellington Arrivals
Terminal building and the majority of land
holdings at the terminal. CentrePort owns and
maintains the Departures Terminal, gangways
and link-spans. Port of Marlborough owns and
maintains the terminal building, gangways and
link at Picton.
Age Years
Tonnage
Owned
Leased
Freight Volume*
(Lane Metres)
Passenger
Nos
Crew
Arahura
28
12,735
Owned
756
539
50
Aratere
13
17,816
Owned
1,052
670
39
Kaitaki
16
22,365
Leased
1,150
1,650
60
Ship
* Effective capacity
19
Arahura, the second rail-capable ferry,
underwent a $9 million refit in 2009 but is
scheduled for replacement by 2016.
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Passenger
KiwiRail Passenger operates long distance
passenger services under the Scenic banner
and the urban passenger services in Wellington,
operating as Tranz Metro.
▪▪ TranzAlpine: Christchurch – Greymouth,
daily throughout the year.
Scenic passenger services include:
In addition, Tranz Scenic runs the Capital
Connection long-distance, WellingtonPalmerston North commuter service Monday to
Friday as well as charter services in association
with heritage groups and cruise ship visits.
▪▪ Northern Explorer: Wellington – Auckland,
currently daily during the summer
months but three times a week during
winter months.
▪▪ Coastal Pacific: Christchurch – Picton,
daily throughout the year.
Long distance passenger
The focus for the long distance passenger
business has been on attracting tourists –
international and domestic. Long distance
passenger train travel in New Zealand is based
on creating a travel experience rather than
simply getting people from one place to another.
Scenic manages a fleet of 43 carriages, including
18 South Island-based, big window carriages,
eight North Island-based big window carriages,
eight Capital Connection carriages and nine
charter fleet, small window carriages.
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In addition, there are three Silver Fern railcars
and 11 luggage vans.
During the 2010-11 financial year long-distance
passenger trains carried just over 400,000
passengers. Customers contribute 100 percent
of operational funding with no Government
funding. In 2009 the Government allocated
$39.9m to fund 17 new carriages for the
Tranz Scenic fleet. Which have now been
introduced on all three services.
Metro services
Until early in the 2011-12 financial year Tranz
Metro had relied on ageing Hungarian Ganz
Mavag and English Electric units to provide
services. The English Electric units dates back
to the 1950s while the Ganz were introduced in
1983. From mid-2011, new Korean-built Matangi
units entered service increasing reliability and
improving customer service. All 48 units are now
in service.
Tranz Metro provides urban passenger
(commuter) service throughout the Wellington
region. They operate between Wellington and
Waikanae, the Hutt Valley, the Wairarapa and
Johnsonville. Services are provided under
contract to the Greater Wellington Regional
Council (GWRC).
Tranz Metro operates more than 2,200 services
each week and carried 11.3 million passengers
during the 2011-12 financial year. Wellington is
the destination for 90 percent of passengers.
Customers contribute 62 percent of revenue
while Government (23 percent) and GWRC
(15 percent) contribute the remainder. Capital
funding is supplied from GWRC with the majority
of funds coming from central government.
Rail passenger service
Service
Tranz Metro
Passengers
2009/2010
Passengers
2010/2011
Passengers
2011/2012
108,551
11,134,000
11,243,000
11,274,000
Northern Explorer
575
72,000
63,000
55,000
Coastal Pacific
598
75,000
49,000
42,000
TranzAlpine
798
193,000
137,000
106,000
Capital Connection
500
178,000
170,000
159,000
2,401
518,000
419,000
362,000
Long-distance passenger total
21
Number of
Services
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Our History
The New Zealand rail system grew from separate
beginnings made by individual provinces or
entrepreneurs from the 1860s onwards. Colonial
Treasurer and later Premier Sir Julius Vogel
made rail a major plank in his programme to
develop the colony in 1870. By 1880 New Zealand
Railways (NZR) was operating more than 1,900
kilometres of track, and carrying almost three
million passengers and 830,000 tonnes of freight
a year. The first half of the twentieth century
was a ‘golden age’ for rail. By 1953 the network
reached its peak at 5,689 kilometres. But
advances in air and road transport began to cut
into its competitive advantage. In 1936 a system
of transport licensing had been introduced
to protect rail from competition. Initially road
was limited to carrying loads no more than 30
miles but this gradually increased, reaching 150
kilometres in 1977.
The NZ Railways was reorganised in 1982 to
become a Government-owned corporation with
a commercial mandate. Also, the government
began deregulation of the transport industry,
removing statutory protections for rail against
competition by road. In 1980, rail carried
approximately 30 percent of all goods, but
following deregulation, its market share
dropped significantly.
In 1990, the operating assets of the NZ Railways
Corporation were transferred to a limited liability
company under government ownership, New
Zealand Rail Ltd. In 1993, the company was sold
to a private consortium comprising Wisconsin
Central Transportation Corporation and two
investment groups. Three years later, the new
owners made a public offering of shares in
Tranz Rail Holdings, listing the company on the
New Zealand Stock Exchange and the NASDAQ
market in the United States.
The process of deregulation, commercialisation
and privatisation saw a reduction in the number
of employees, from 21,000 in 1982 to 3,757 in
2002. After the sale in 1993, the
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New Zealand Railways Corporation continued as
a residual government body with two principal
activities: to manage all known litigation,
contingent issues and statutory obligations;
and to manage the rail corridor lease with
Tranz Rail and the lease of other crown land held
for operational rail purposes.
During the 1990s, Tranz Rail expanded into new
markets, including the movement of bulk milk to
dairy processing plants and establishment of
New Zealand’s first inland port south of
Auckland. The new port, a joint development
with the Port of Tauranga, is connected by train
with Tauranga and created a significant new
line of containerised freight business. In 2003,
Toll Holdings Limited, an Australian-based
transportation and logistics operator, acquired
approximately 85 percent of the shares in
Tranz Rail. As a result of Toll’s offer for shares in
Tranz Rail becoming unconditional, an agreement
between Toll and the Crown was triggered, a key
feature of which was the buy-back of track and
associated infrastructure by the crown.
The Crown undertook to invest $200 million in
improving rail infrastructure while Toll undertook
to invest $100 million in new rolling stock. In
September 2004, ownership and management
of the network and its assets was vested in the
existing New Zealand Railways Corporation which
adopted the trading name ONTRACK. Under the
agreement, Toll retained exclusive rights to the
network for freight purposes, subject to meeting
minimum tonnage levels annually.
In late 2007 and early 2008, the Crown
negotiated with Toll Holdings for the purchase
of the company’s New Zealand rail and ferry
businesses. A purchase was concluded on 30
June 2008 for $665 million and the business
re-named KiwiRail.
With Government investment of $750 million over
three years, KiwiRail emabarked on a Turnaround
Plan in 2010 to create a business within 10 years
that would be financially self-sufficient.
Chronological History
of New Zealand Rail
1862 irst railway opens - a horse-drawn tramway from Dun Mountain copper mine to Port
F
Nelson.
1863 First steam railway opened on the Christchurch-Lyttelton line, via the Lyttelton tunnel.
1870 With less than 100km of track operating, Prime Minister Julius Vogel calls for railways to aid
economic development, and a narrow gauge is chosen to save money.
1873 First train in North Island, Auckland-Onehunga.
1878 First express trains Christchurch-Dunedin cover 370km in 11 hours.
1879 Possible to travel 600km from Christchurch to Invercargill by train.
1880 Almost 1900km of railway open.
1886 Wellington and Manawatu Railway Company opens line to Longburn, near Palmerston North,
introducing gas lighting and dining cars. After 22 years, it was bought by Government.
August 1908 Parliamentary Special train - Anderson family album courtesy of Ron Cooke
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1908 North Island Main Trunk line completed after 23 years work - the crowning achievement of
the ‘railway age’. First train carried MPs to Auckland, in August.
1923 West Coast line opens - its Otira tunnel, at 8.55km the longest in the British Empire and
containing the nation’s first electric railway.
1930 Rotorua Limited introduced for tourists from Auckland, with observation car.
1936 First successful railcars, Wairarapa route. 1945 South Island main trunk from Christchurch
to Picton completed.
1953 The length of railway line operating hits its all-time peak - 5,656km. Christmas Eve crash at
Tangiwai kills 151 rail passengers.
1955 Rimutaka tunnel opens, eclipsing Otira as the longest at 8.8km and Nelson railway closes.
1959 – 1971 Numerous country branch line closures as steam era comes to an end as re-equipping lines
with modern locomotives and updated infrastructure not considered viable.
1971 Last regular steam train in New Zealand signals completion of dieselisation of railway network.
1978 Completion of the Kaimai tunnel signals more direct freight link between Waikato and
Bay of Plenty.
1982 Railways Corporation created as statutory corporation from Railways Department.
1983 Start of deregulation of “distance limits” on trucking companies opens railways to roadbased competition. Rail employs 21,000 workers.
1984 Electrification of Central Network starts. Completed in 1988 at a cost of $250 million.
1986 Government makes railways a state-owned enterprise. In six years the workforce is cut from
21,000 to 5000, while productivity of the land-based workforce is lifted 300 percent.
1990 Finance Minister says Railways Corporation has accumulated debt of $1.1 billion, and the
Government is considering restructuring it; Limited liability company New Zealand Rail
(NZR) is formed.
1993 Government announces sale of NZR to a consortium of Wisconsin Central Transportation
Corp and Berkshire Partners (60 percent stake) and Fay Richwhite (40 percent) for $328.3m.
1995 Company re-named Tranz Rail.
1996 Wisconsin Central and Fay Richwhite float 31 million shares to the public at $6.19/share.
1997 Tranz Rail share price peaks at $9.
2003 Stock plunges towards 30c/share, details emerge of how the company needs to sell assets to
meet lease payments and repayments of debt required by bankers.
2003 Tranz Rail taken over on market by Toll, who also assume debt and lease obligations. Track
to be sold back to Crown.
2004 Government assumes ownership of national rail network and ONTRACK formed to run
it. National Rail Access Agreement (NRAA) with Toll comes into effect with Toll exclusive
operator and ONTRACK network provider.
2006 Toll NZ threatens to slash services on much of the national rail network including the main
trunk line unless it gets a long-term agreement from the Government on its track-access fee.
2007 Toll Holdings buys another 10 per cent of railway shares, triggering a compulsory takeover
for the remaining shares at the same price of $3 each. 2008, July 1 The Government buys
back Toll’s rail and ferry business for $665m, after several months of negotiations.
2008, Oct 1 ONTRACK and KiwiRail form a single integrated rail business under New Zealand Railways
Corporation KiwiRail banner.
2009, Mar 23KiwiRail brings the maintenance of locomotives and wagons in-house by purchasing United
Group Ltd.
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Glossary
Rail has an extensive list of jargon. Here are some terms you may benefit from being familiar with:
Above rail
Train and train service operations
Axle load The weight on any one axle (tonnes)
Below rail
Rail infrastructure such as track, bridges, tunnels, signals etc
Carriage
Un-powered vehicle of a passenger train
DARTDeveloping Auckland’s Rail Transport (the Auckland urban rail upgrade)
Day-lighting
Converting a tunnel into a cutting
EMU
Electric multiple unit (urban passenger train)
Net tonne kilometres (NTK)
Tonnes of freight carried, multiplied by the distance travelled
Rolling stockAll locomotives, railcars, wagons, carriages, and maintenance vehicles
Rail maintenanceThe day-to-day work that involves things like fixing faults and clearing
culverts
Renewal
The replacement of an asset on a like for like basis
Upgrade
Building or installing totally new assets or replacement of an existing
asset with something better
Wagon
A railway freight vehicle
WRRPWellington Region Rail Programme (the Wellington urban
rail upgrade)
Network
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The rail corridor that runs throughout New Zealand.