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Speech by New Zealand First Leader

Rt Hon Winston Peters
New Zealand First Leader
Member of Parliament for Northland
7 NOVEMBER 2016

Speech by New Zealand First Leader and Northland MP Rt Hon Winston Peters

Rail Forum

Te Tini o Porou Conference Centre,

Kaiti, Gisborne

1pm, November 7, 2016

“Mindless mothballing of rail”

Before addressing the needs of our major railway network one must understand the recent history behind the rundown of New Zealand’s railway services.

In 1992 after years of exiting thousands of railway workers, under the then National Government, NZ Rail commissioned a report from Booz Allen in to the financial state and prospects of railways.

That report said that railways was in serious recovery, forecasting a profit within a year of $36 million to quickly go to $100 million thereafter and rising.

In October 1992, Fay Richwhite had themselves made financial advisors to NZ Rail.

This was no accident.

In April of the following year, 1993, a consortium including Fay Richwhite made an offer to buy NZ Rail.

Within 3 months, 20 July 1993, the National Government sold NZ Rail to the consortium.

There was no tender process, no open sale, just a National Government decision to sell a major infrastructural asset to private interests.

The National Government claimed the sale price was $400 million

That was a lie

Railways had a $72 million debt so the price was $328 million.

Within 3 weeks of the international market learning of this sale the share prices of Faye Richwhite and Wisconsin Railways, two of the buyers, went up by a massive $182 million.

The excuse for the sale was that only private interests could maintain the railways in profit and pay for future infrastructure.

When that sale happened the Labour Party did not oppose the sale, but the ‘timing’ of it.

Then Railways under private ownership saw massive recapitalisation and its share price soared beyond $9 per share.

Not so long after that the share price collapsed to a low of 28 cents per share.

After the 1999 election the Labour Government was forced to buy Railways back.

That is the history, against a back drop of utter deception continued by the present National Party, who disown their demonstrable guilt and venality, in the demise of railways arguing ever since that railways can’t run at a profit whilst preferring road transport, on highly unstable, high cost roads as the alternative.

That is what Gisborne, Napier and other provincial cities are having to address now.

Mothballing rail lines is mindless, and re-opening the Napier-Wairoa line shows that.

Washouts from flooding were used as an excuse to mothball both this line and the Wairoa-Gisborne line in 2012.

The business community of the East Coast could see this was a disaster.

Because of the closure Wairoa sawmill Clyde Lumber went out of business with 22 jobs lost.

Using road transport was too expensive to make the business viable.

Federated Farmers Gisborne-Wairoa president at that time Hamish Cave was quoted as saying:

"It's no secret we've got constraints with our roads and this is why we need the Government to sit down with us, employers and the council to look at all the freight transport options we need. We need better roads, better shipping and, of course, a rail line.

"Government policy is too skewed to the cities.” (Federated Farmers Gisborne Wairoa president Hamish Cave)

That was true four years ago and it is true now.

But the closure of the Gisborne-Napier line is an example of the National Party perverting sound provincial economics.

It was well known that large volumes of logs would have to be taken out of Wairoa and that without rail this would present huge problems for the region’s roads.

And rural roads have been grossly ignored since the government removed the rural roads subsidy in 2009.

The suggestion by an editorial in the Gisborne Herald last week that a better investment would be made in coastal shipping instead of rail misses a critical point.

This ignores the massive issue of transporting logs to the port.

Rail cannot be left out of the equation.

It is difficult to understand the mentality of those that think that the massive truck movements on road is affordable when the destruction to so many of our rural roads is patently obvious to every road user.

Transporting logs by rail is reliable, efficient and environmentally friendly.

KiwiRail has also recently introduced inter-modal wagons which allow goods to move swiftly between ships, trains and trucks.

Napier port chief executive Garth Cowie has warned the increasing long-term log volumes from Wairoa will stretch the capacity and infrastructure of both road and rail.

Rail is, therefore, critically important.

It cannot be left just to road only. The cost is so unaffordable that it is difficult to understand how any policy maker could support the idea. Loo around the world. What is happening in NZ in roading is a certain pathway to destruction of the very utility itself. Road maintenance costs are massive now.

The sad thing is work now has to be done to upgrade the Napier-Wairoa line which would not have been necessary had the line been maintained in the first place.

Millions of extra dollars will now have to be spent.

A job only half done

And reopening the Wairoa-Napier line is only half the job.

The Gisborne-Wairoa line must also be re-opened.

It is a critically harsh blow for the East Coast that this line is still out of action.

As well as the ability to carry heavy freight having a full Gisborne-Napier line would also be a great boost for tourism.

The Mohaka Viaduct is considered an engineering marvel.

Spanning the Mohaka River near Raupunga, it is 277m long and 95m high, making it the tallest viaduct in Australasia.

The government blundered in allowing the whole line to be mothballed in the first place.

Transport Minister Simon Bridges must now step in and provide the resources to make it happen.

Ladies and gentlemen, you here have got to do more than just complain about it. If you want a railway line you are going to have to vote for it.

Nation-wide programme needed

KiwiRail chief executive Peter Reidy said last month in the NZ Herald KiwiRail is in the midst of a multi-year transformation programme that is helping to drive growth opportunities for the New Zealand economy.

But the real issue is exactly what does Mr Reidy mean by transformation?

An efficient co-ordinated rail system – or maintaining some lines.

It’s a pity for example that KiwiRail’s transformation programme in Northland is simply to shut lines down.

In September KiwiRail cut the Whangarei-Auckland service from 20 train movements per week to 10, five each way.

In the same month they shut down the Kauri-Otiria line, further restricting economic development in Northland and putting more big log trucks on the already over-stressed roads.

Rather than sitting by and letting rail lines get mothballed and shut the National government should be working alongside KiwiRail to keep lines open.

Treasury’s advice to the government last year, recommending closing major parts of the rail network, has been proven wrong.

That would be a disaster for New Zealand.

Having to re-open the Napier-Wairoa line shows how short-sighted this thinking is.

And now the Gisborne Wairoa line must be reopened as well.

NZ First rail policy

NZ First wants a combined road-rail-shipping strategy for New Zealand.

We will ensure that none of New Zealand’s railway lines and other strategic railways infrastructure will be privatised.

New Zealand First will develop a programme of railways of national importance (RONI).

These would ensure better use of our railway network and services is achieved and dependence on our roading network would be reduced, especially for heavy freight and bulk freight services.

New Zealand First will not require the whole cost of development of new railway tracks and services, and of electric reticulation, to be met by revenue generated by railway service charges.

These will be met by a combination of Land Transport Fund funding and crown grants.

Conclusion

We promise you the government expenditure on infrastructure for the provinces is not forgotten.

We want a fair focus on the infrastructural needs of the provinces where our great export wealth is created.

Your line has been closed for four years.

You don t have to be a rocket scientist to work out how you are going to get it to re-open.

You’ve got to stop rewarding your economic tormentors.

Why would you vote for a Member of Parliament who poses as a lion in the electorate and is a total subservient lamb in Cabinet?

Her inaction is the reason for this meeting today. So, where is she?

ENDS


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