kos
Contributor
Self driving trucks are a million years away.
Has Fonterra closed all its plants?
Fonterra use rail extensively even on short haul.
Two points you made so incorrect.
Politics 🗳️ NZ Politics
- Thread starter wizard of Tauranga
- Start date
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Hey mate, do you know how much container freight crosses the Cook Strait currently by rail versus truck? It would be interesting to see what that percentage is currently with our rail enabled ferry and how much increased rail freight was in the proposal for upgrading the ferries. A lot of freight requirement appears to be for next day delivery and currently trucking looks like the cheapest and most able to meet that logistically. Rail looks good for bulk commodity products over long distances where transporting is less time sensitive and can go straight to the end user/port. It also seems like a lot of fixation on the Cook Strait part of the rail network when the rest of the rail network looks like it needs big upgrades
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They had several options they could have looked at. I found this discussion piece quite interesting.
Wither rail freight in NZ?
A friendly debate between Bryan Crump & Dave Heatley
Bryan Crump and Dave HeatleyJan 21, 2024
December’s post on the future of the InterIslander rail ferry service prompted a spirited email exchange between us — radio broadcaster Bryan Crump and editor Dave Heatley. We decided to share the edited highlights.
[Bryan] As a fan of rail transport (although I think my enthusiasm falls short of the criteria for "foamer" status) the medium-term prospect of freight trains disappearing from the North Island Main Trunk (NIMT) fills me with some dismay.
I am wise enough to appreciate just because I like something doesn't mean it ought to stay. The Raurimu Spiral and the many viaducts through the central North Island would make for a remarkable cycle trail.
[Dave] Thank you for introducing me to the term “foamer.” [Foamer “describes someone who is obsessed with trains. Not just a railfan, but beyond that.”]
It may surprise you, but I’m train fan. I’ve relaxed on the Northern Explorer, visited the Raurimu Spiral and the viaducts near Ohakune on the ground, and – just last month – enjoyed commuting on the Capital Connection.
I try to put all that aside, however, when I look at the economics of rail. Rail freight just isn’t paying its way – it costs much more to run KiwiRail than its customers are willing to pay (its customer revenue was ~$850m in 2022/23).1 Government makes up the difference in lots of ways – non-customer flows into KiwiRail totalled ~$1.5bn in 2022/23. It’s legitimate to ask what are taxpayers getting for that money? And is it being spent wisely? What other social priorities could it be applied to? Could it have greater overall benefits in another use?
Cook Strait ferry leaving Wellington Harbour. Dave Heatley
[Bryan] Delighted that I may have extended your vocabulary!
Your graph of rail's share of land transport in the 21st century initially showed a steady increase, peaking at 20% in 2010, before beginning its steady decline to its current share of 15%. Why was rail's share increasing in the 2000s, and what happened in 2010?
I'm guessing 2010 is about the time the impact of the Key Government's policy to allow more axles on truck trailers began to kick in. That possibly increased driver productivity by up to 50%.
[Dave] That’s one possible explanation. Another is that road freight is more sensitive to NZ GDP fluctuations than is rail, so what we saw 2007-11 was a post-GFC depressive effect on road freight, which pushed up the share of rail freight. Once the NZ economy was back to “normal,” the underlying trend reasserted itself.
Unfortunately, the fidelity of the underlying freight data is low, making it hard to distinguish between these theories and others.
[Bryan] For rail to maintain the same productivity advantage (what a train driver can move compared to a truck driver), it would have had to increase the axle load its rail lines are capable of handling. I think KiwiRail's standard is currently 18 tonnes per axle. By comparison Queensland Rail (which also runs on 1067mm gauge track) is 26t.
[Dave] NZ rail is different in important ways from what happens overseas. I admit to gazing in awe at trans-Canada freight trains in 2018 – they are up to 4km long, with double-stacked containers! KiwiRail is never likely to achieve that level of efficiency.
[Bryan] NZ's rail operators frequently complain they have to fund all of their capital investment in a permanent way, while central government is prepared to put billions of dollars into new roads.
[Dave] Yes, that’s the complaint. But it is demonstrably wrong. Most of the capital expenditure (CAPEX) on roading in NZ is funded by road users, with smaller amounts from taxpayers (via central government) and ratepayers (via rates). Rail generally fails to cover its operational expenditure (OPEX), receiving top-ups from road users via the National Land Transport Fund. Rail CAPEX mostly comes from taxpayers via central government.
[Bryan] The last significant investment in the NIMT was the electrification project (not so much the electric locomotives, but the millions put into improving the railway itself). That was completed in the late 1980s. Billions have been spent on improving State Highway 1 since then.
Is current transport infrastructure funding giving road transport too much of an advantage?
[Dave] There is a more than reasonable case for the opposite viewpoint, that is, road users are subsidising rail (see above).
[Bryan] Is it possible private motor vehicles are also subsidising heavy trucks (pothole problems anyone) and if they are, might they want that subsidy directed towards getting some of the road freight back onto rail?
[Dave] I think there is one good reason why road users should subsidise rail. This is because road users benefit when rail takes trucks off roads. The question in my mind is not whether there should be subsidies, rather it is what level of subsidy is reasonable? In economics, too much subsidy is just as wrong as too little.
[Bryan] You make a convincing argument that we are already subsidising a significant chunk of our rail freight operations. But I'm not convinced taxpayers aren't doing a little bit of the same when it comes to road wear from heavy trucks. However, the recent election result suggests most voters are quite happy to see more of their taxes going to fix potholes.
Treasury gave advice to the Key government to close most of the KiwiRail system in 2015. More recently, an EY study (launched by the recently deposed Labour-led government) concluded rail's net national social/economic benefit was being underestimated to the tune of billions.
Who's right?
[Dave] Economic valuation is an imprecise science, and reasonable people can come to different conclusions. (That said, in my experience consulting firms have a remarkable ability to produce an answer that the firm thinks the customer wanted.)
Even if EY is correct, and “rail’s net national social/economic benefit was being underestimated to the tune of billions,” that doesn’t mean that every proposal to spend money on rail makes economic sense.
The Interislander ferry and port upgrade (iReX) may well have been a good deal if it could have been completed at the initially mooted ~$700m. But that doesn’t mean it was a good deal at ~$3bn — a point on which Ministers Robertson and Willis agreed. And it almost certainly wouldn’t have been a good deal at say $6bn (which it could have easily ended up at, should it have blown out like Auckland’s City Rail Link).
Does being against iReX at a price tag of $3bn make one anti-rail? I don’t believe so. I just think iReX was a poorly designed and executed project that reflects very badly on KiwiRail’s governance and management. They chose to ignore an obvious option that would have given them two rail ferries at a much lower cost: retaining the rail ferry Aratere (fewer than 10 years have passed since its last rebuild) and buying a single custom-built rail ferry that was compatible with existing port facilities.
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[Bryan] I agree that the evidence from the impact of the Kaikoura earthquake, and the subsequent layoff of the Aratere ferry (which left KiwiRail with no rail ferry for the best part of a year), suggests New Zealand can cope just fine without the rail ferry link.
However, it's also clear that, when the rail ferry option is no longer there, the share of freight going by rail on the NIMT will decline.
What if global concern about climate change forces governments in the 2030s and 40s to rapidly decarbonise? If we no longer have an integrated rail network, will we regret not being able to pivot more quickly?
Ikawatea Stream, Ruahine Forest Park. Dave Heatley
[Dave] I don’t think that an “integrated rail network” is a binary thing. A better goal for NZ is an integrated freight network, where freight can travel by the mode, or combination of modes, that meets the delivery time and other requirements of freight customers at a reasonable price (and has externalities like congestion and emissions properly — but not excessively — factored in).
Just because I think that iReX at $3bn was a bad deal for the country, doesn’t mean that I would conclude the same thing for different projects. I suspect there may be a reasonable case for rail infrastructure upgrades between Tauranga and Auckland, for example. Each project should be looked at on its own merits, rather than by appeal to a higher cause like “integrated rail network.”
[Bryan] Or are we confident our trucks will all be electric by then?
[Dave] If trucks are not electric, then rail may not be much help, as it is very poorly suited to moving many loads – e.g. livestock, concrete, and quarried materials. Moreover, most non-bulk rail trips still require a truck to get the load to/from the railhead.
Once we have electric trucks at reasonable prices that can take on the tasks rail cannot move, those trucks will also compete with rail for the tasks it can move. This might make the economics of rail more difficult, rather than easier, from the 2030s onwards.
Reducing greenhouse gas emissions is important. But that doesn’t mean that every project that purports to reduce emissions is worthwhile.
[Bryan] Alas, it appears NZ is neither big enough, nor has sufficient population density for rail to really thrive, with a few exceptions.
Perhaps the future is three separate rail networks:
- Auckland/Hamilton/Tauranga, including the forestry and dairy industries of South Waikato and the Bay of Plenty, and the (as long as it remains open) steel mill at Mission Bush.
- Wellington/Masterton and Palmerston North.
- Christchurch/Dunedin/Invercargill and (as long as we continue to export West Coast coal to steel mills overseas) the West Coast.
[Bryan] Still, I can't help wondering "what if" rail freight had attracted a little more government investment; would a rail line to Marsden Point (coupled with an upgrade of the Northland line) have done for Northland what the Kaimai Tunnel did for the Bay of Plenty?
https://www.stata-nz.com/stata/buy.html
Your post on the demise of Three Waters made the point that local government tends to delay investment in sewage and storm water because it's not noticed by voters (until it fails).
Did rail freight infrastructure suffer a similar fate? No politician has suffered promising another motorway!
[Dave] The electoral consequences of motorway commitments are perhaps not quite that simple. The incoming Labour government didn’t suffer any obvious electoral consequences for cancelling Auckland’s East-West link motorway in 2017. I think the parties craft their appeals to different electoral bases.
I predict that NZ will still have a rail network in the 2030s. The parts that thrive will be determined by customer demand to move a limited number of (mostly bulk) commodities, just as it is now. The parts that don’t have much demand (e.g. Napier to Wairoa) will continue to wither, regardless of how much capital the government is willing to pour in.
[Bryan] I wonder how ruthless the current government will be? If the Aratere is our last rail ferry, will it allow KiwiRail to divest of its unprofitable routes? Or will KiwiRail be lumbered with maintaining loss making lines, because the Government isn't prepared to close them? Or will Nicola Willis find a cheaper rail ferry option?
[Dave] I am sure there are cheaper rail-ferry options than iReX. But the government faces some tough decisions without clear answers. I can only hope these are informed by solid analysis. But I guess we’ll have to wait to find out.
[Bryan] Regardless of the economics, I would be sad if trains disappeared from the NIMT. But being able to cycle up the Raurimu Spiral and across the Makatote Viaduct would be a significant consolation.
By Dave Heatley & Bryan Crump
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Rick O’Shay
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I know it's Gina but was sitting next to a guy on a plane recently who worked at Roy hill where their mine fleet was automated
All we need is to rip up the main trunk and replace it with a dedicated auto truck road. Job done
kos
Contributor
They have to automate -massive huge shortage of truck drivers-but long straight controlled flat hauls is where driverless trucks shine. Add variables and the system cant cope.Home - Roy Hill
Roy Hill is a world-class integrated iron ore mining, rail and port operation in Western Australia’s Pilbara region. Discover our approach and job vacancies.
I know it's Gina but was sitting next to a guy on a plane recently who worked at Roy hill where their mine fleet was automated
All we need is to rip up the main trunk and replace it with a dedicated auto truck road. Job done
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This part is wierd. Roads dont pay for any part, govt simply taxes a product and uses that money to pay for it. If you fill a petrol lawnmower you are contributing. Unless all roads were tolls. Also all road users pay for some roads theyll never use
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Heavier trucks have been on the road for a long time now. Its really been the last few years where the roads have been particualrly bad. I certainly think the contractors used are tendering low, using inferior products. Add in the change of Government from 2017 where JA cancelled a number of roading projects. Also the switch to funding bike lanes for example. My perception is that money was spent in the wrong areas and on things that seemed incredibly expensive for what they are.
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Indefensible Interislander ferry plan: The Government is finishing the year derailed - Barry Soper
By Barry SoperNewstalk ZB's senior political correspondent·NZ Herald·
12 Dec, 2024 09:31 AM4 mins to read
THREE KEY FACTS
- The Government has established a new company to procure replacement ships for KiwiRail’s ageing Interislander ferries.
- Costs for the original plan to replace the fleet with two mega-ferries ballooned to more than $3 billion, leading to their cancellation.
- KiwiRail is preparing to extend the life of its current fleet until 2029.
We’re getting back on track, he’s intoned time and time again. Yeah well they’re finishing the year derailed.
It’s on the topic that’s plagued them virtually since the day they took office - the replacement of the Interislander ferries.
The Labour coalition government, with the help of Winston Peters, got a plan off the ground to replace the sea horses, doing a deal with the South Koreans to have two built at around $700 million.
It seems like anything that New Zealand touches, there’s always a cost blowout and that got underway - full steam ahead - when Labour was elected in its own right in 2020 and spent like drunken sailors.
The ferry cost blew out to more than three billion bucks, it seems because no one had taken into account that the new, bigger ferries capable of taking trains couldn’t dock on either side of Cook Strait. That’s because the infrastructure for the bigger ferries was inadequate.
So the contract with the South Koreans, who had started building the ships, was scuttled and for the past year we’ve been waiting to hear the coalition Government’s grand plan to keep the country connected.
The parties making up this Government frequently attacked Labour for continually making announcements about announcements.
Well that’s exactly what the Government did with the new phantom ferries yesterday.
They’re forming a new state-owned company in the new year to replace the ageing fleet with a couple of new boats which will be more in the league of Toyota Corollas to the last Government’s “Ferraris”, if you listen to the minister who cancelled the last contract, Nicola Willis.
How anyone can say that when the new, yet-to-be-formed company in charge of securing the new fleet, presumably can’t have started negotiating yet. And there could be an issue with our credit rating given the way we broke the last contract, meaning we may now be up for the cost of a Lexus.
At least the new company will be able to devote all its time to getting new ferries on the Strait and leave KiwiRail the space to look after the old dungers plying the sea at the moment.
PM Luxon fields question over ferries announcement
Prime Minister Christopher Luxon fields question from media over today's Cook Strait ferries announcement.
Christopher Luxon was left to defend the indefensible in Parliament to the glee of Labour who created the mess in the first place.
Luxon laid it on with the trowel, declaring he was “very proud to be announcing an incredibly fantastic and credible plan to have a resilient and reliable crossing on the Cook Strait.”
What the plan is though we will just have to wait and see.
But no worries - at the helm will be the old fire stoker himself Winston Peters, the first Minister of Rail in almost 30 years since his old flatmate Philip Burdon relinquished the job when he retired in 1996.
Peters has had a long association with the ferries, with claims from him in the past that they’ve scraped their bum on the seabed, one of their propellors connected with a wharf and of course that they’d recently gone for a cup of coffee when the autopilot glided the ferry to a soft landing on a beach.The New Zealand First leader has in the past insisted the new ferries should be capable of carrying trains. The Ferraris were capable of doing that, but it’s doubtful the Corollas would have enough grunt.
In the end it will all come down to quality and cost. Peters has declared this is not his first rodeo and it seems we’re being taken along for the ride. We have no choice.
Barry Soper: An indefensible ferry plan - Govt is finishing the year derailed
OPINION: We’re getting back on track, the PM’s intoned time and time again.
Stuff
www.stuff.co.nz
Always thought there could be something to this initiative but never took off. In saying that, I don’t know if it was successful? Think the bitumen has always been something that hasn’t coped as summers have gotten hotter but certainly does seem to be delivering worse outcomes as to the standard of roads. Is bitumen used everywhere in the world in regards to roads? Also don’t think the current setup regarding roading is helpful in the sense of needing to spend a majority of the budget in order to receive more. Doesn’t seem like a helpful model if the desired outcome is for the work undertaken on the road to last as long as possible?
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John Nick
Contributor
Never heard this story before. Pretty sure that the Ovation of the Seas the biggest of all cruise ships has been to Wellington.
She was huge. To be honest I have never sailed the Tory Channel.
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Lot of reading in this report, but the financial risk part is an interesting part. Seems like Tim Healey wasn’t such a fan of the previous government and the potential of three waters. Would be interesting to see a breakdown of how these incidents that he’s concerned of in the Tory straight have occurred?
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Luxon and Peters are more and more aligned as the days go by. Seymour seems to be like that spoilt kid that thinks he knows everything but doesn't. I think that having now worked with both Peters and Seymour, if Luxon could choose just one coalition partner he would go for NZFirst 9 times out of ten. The other time he would give it some thought and then still go with NZFirstHe and Seymour not agreeing on this one. They have a bit of a history of some fiery encounters. Will be interesting to watch on with latest polls suggesting Winston wouldn’t be needed in a future coalition. Labour parted ways when they were voted back in with Winston but I wouldn’t be surprised if national would rather go with him than Seymour? I see a letter has been penned to King Charles regarding the treaty principles bill and his feeling towards it. Seems to be bringing more negative headlines than positive ones though yet to learn the King’s feelings towards the issueStuff
www.stuff.co.nz
PM Luxon defends ferry announcement, says 'great solution' has been found
The lack of detail has raised eyebrows.
Peters has reinvented himself more times than Donald Trump!!!Luxon and Peters are more and more aligned as the days go by. Seymour seems to be like that spoilt kid that thinks he knows everything but doesn't. I think that having now worked with both Peters and Seymour, if Luxon could choose just one coalition partner he would go for NZFirst 9 times out of ten. The other time he would give it some thought and then still go with NZFirst
PM Luxon defends ferry announcement, says 'great solution' has been found
The lack of detail has raised eyebrows.www.nzherald.co.nz
