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CEAC Support The Calls “KiwiRail: The Need For Change”

Kiwi Rail are now being publicly ridiculed for their hollow choice as to whether to operate rail on east coast regions and we support the public anger building as a result of Kiwi Rails lack of support for these isolated regions.http://www.gisborneherald.co.nz/opinion/column/20200505/kiwirail-the-need-for-change/

KiwiRail: the need for change

Last Saturday's pronouncement by KiwiRail's CEO, that “the figures don't stack up” for reinstating the Turanga ki Wairoa rail line, flies in the face of the fact that KiwiRail was party to the BERL report.

Have KiwiRail staff been withholding information from their boss? I have been assured by other contributors to the report that the figures are sound. They have not been arrived at by guesswork or a “wet finger in the air” but represent potential costs estimated by professional experts in collaboration with companies in a position to do the work. If Greg Miller thinks KiwiRail would need to charge “five times as much” to do the work then it is obvious that KiwiRail is not the best choice of contractor.

The BERL report considered that it would take several years to build up the southbound freight volume from Gisborne, but initially there would be enough freight for one 24-wagon train daily. Presumably, Mr Miller does not consider one train per day to be sufficient, but he also does not allow for a period of grace while more freight customers transition from road to rail freight. The need for this transition period is well understood by Government.

Mr Miller's remarks about the viability of the line focus solely on its profitability. Where was he last year at Budget time? Has he come across the term “Wellbeing”? Does he know that it is Government policy to expand the rail network for the good of the country as a whole? Even Gavin Murphy of Trust Tairawhiti recognises that this area could benefit from a range of alternatives to road transport.

Of course, the paradox here is that KiwiRail (as a State-Owned Enterprise) “has to run a commercial business” and “there are no subsidies for the freight network”, and therefore cannot operate simply as a public service. The solution to this impasse is two-fold:

Create distinct entities that separate the “below rail” (provision of infrastructure) and network control functions from “above rail” operations. Investment in infrastructure can then be provided by central government in accordance with declared policy, independently of the business of conducting profitable operations.

Allow “open access” to the network. This would enable other operating companies to utilise the network in competition with KiwiRail operations, especially on routes where KiwiRail declines to offer a service. All operators would pay access fees to the government-funded “NZ Rail Network” company.

The Minister for Transport, as sole shareholder of KiwiRail, is in an influential position to make these changes. I'm sure he would have the full support of the Minister for State Owned Enterprises and the Minister for Regional Development. Maybe the Prime Minister should get them seated at the same table and tell them to get on with it.

The restoration plan is shovel-ready (obstacles perceived by the GDC CEO are probably incidental to the main task and can be addressed in due course). It is not necessary for GDC to “take the lead” — the project simply awaits the “green light” for implementation of the BERL recommendations. Get the line fixed and then sort the commercial implications. Tairawhiti businesses are waiting; when the resource is available, then is the time to enter into the contracts that Mr Miller wants to see.

This long-awaited development, promised by the prospective government in 2017, would give us reason to remember 2020 for something else.

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