Hon Dr Michael Cullen
Minister of Finance

22 July 2008 Media Statement

Government takes first steps in KiwiRail upgrade

Improvements for Auckland and Wellington commuter services and a major overhaul of the Tranz Scenic service are part of a five year, $80.2 million investment in rail infrastructure announced by Finance Minister Michael Cullen today.

New Zealand’s rail operation was passed back into the ownership of the New Zealand public on 1 July and re-launched as KiwiRail. The Labour-led government has indicated that a major re-investment programme will be needed to preserve existing rail services and to see rail play a bigger role as part of a modern, sustainable transport network.

“The selling off our rail system in the 1990s was followed by asset-stripping and a failure to properly invest in the services,” Dr Cullen said.

“At a time of high petrol prices and concern about climate change, New Zealand cannot afford a substandard rail system.

“Despite some improvements in the past few years, a significant investment is required just to keep some existing services running. We also need to invest more in our rail infrastructure so we can see rail makes its full contribution to the sustainable, modern transport sector our economy needs.

“This $80 million investment is our first step. In the next few weeks I will present a paper to Cabinet proposing to expand the role of rail in our economy and the investment necessary to make that happen.”

KiwiRail Chairman Rt Hon Jim Bolger welcomed the investment.

“I’m confident that KiwiRail will be a major success for New Zealand’s economy, but it’s clear significant investment will be required to make that happen” Jim Bolger said. “I am pleased the government has confirmed this investment and look forward to overseeing the resulting upgrades.”

The investment will allow a number of upgrades to locomotives and wagons throughout the country and the continuation of some current locomotive upgrade programmes. It also includes:

• upgrades to be made to the locomotives of the diesel electric DC class including those working on the metro services in Wellington and Auckland which will improve services for customers and includes the re-commissioning of two more electric locomotives for freight service in the Wellington area;

• the replacement of the current Tranz Scenic fleet with newly refurbished BR cars over 5 years;

• some urgent repairs and safety issues to be addressed at the Wellington and Picton Interislander ferry terminals; and

• funding to evaluate whether KiwiRail can assemble locomotives at the Hutt shops with contributions from Hillside and other engineering works in New Zealand.

ENDS

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