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Government investment supports transport

Hon Gerry Brownlee
Minister of Transport

16 May 2013

Government investment supports transport

KiwiRail will receive $94 million in 2013/14 as part of the Government’s investment in KiwiRail’s Turnaround Plan to help make the rail freight business self-sustaining, Transport Minister Gerry Brownlee says.

The new investment, from the Future Investment Fund, follows a previous $750 million Government investment in the Turnaround Plan, disbursed over the last three years.

Vote Transport receives $15.4 million of new operating funding over the next two years and $101 million in new capital funding from the Future Investment Fund.

Transport investments, additional to KiwiRail, include:
• The SuperGold Card off-peak public transport concession scheme will receive additional funding of $14 million of operating funding over the next two financial years. This will bring the funding for 2013/14 to $24 million, and $26 million for 2014/15.
• $7.2 million of capital funding to replace New Zealand’s search and rescue satellite ground station, to ensure New Zealand continues to meet its international obligations to receive emergency distress beacon signals when the existing international search and rescue satellite system is retired.
• $1.4 million of additional operating funding for the MetService in 2013/14 only, to pay for the increased costs of the weather forecasting services it provides.
The KiwiRail Turnaround Plan aims to help the rail freight business become self-sustainable through customer revenue by 2020, Mr Brownlee says.

“The additional investment in rail will help support the Government’s plans to improve New Zealand’s productivity and export-led economic growth. It will also increase the resilience of the transport system.”

Highlights of the first two years of KiwiRail’s Turnaround Plan include:
• Rail freight volumes have increased by 16 per cent.
• Core freight revenues have increased by 23 per cent.
• On-time performance of premium freight services has improved from 68 per cent to over 90 per cent.
KiwiRail will spend the $94 million on buying new wagons and locomotives, and on track and infrastructure renewals. The balance of the investment required for the Turnaround Plan in 2013/14 will come from KiwiRail’s revenue.

Further investment in rail is not without risk, Mr Brownlee says.

“KiwiRail will need to achieve challenging volume and revenue targets in the future, but the company has put the foundations in place to achieve these targets.”

The extra spending on the SuperGold Card public transport concession reflects the increase in the number of people turning 65, the growing popularity and use of the concession, and increasing transport costs.

“Work now under way to find cost-efficient, sustainable funding for the free off-peak public transport scheme without affecting current eligibility or entitlement, shows the Government’s continued commitment to helping older New Zealanders keep mobile and active in the community.”

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