$1.3 billion investment creates sustainable pathway for KiwiRail

20 May, 2021

The Government’s significant rail investment in Budget 2021 is another major and welcome step to making KiwiRail sustainable, Group Chief Executive Greg Miller says.

The Government has committed $1.3 billion for rail in Budget 2021, building on previous Budget investments of $1.2 billion in Budget 2020 and $1 billion in 2019.

“This is an outstanding level of investment from the Government which is truly revitalising rail for New Zealand,” Mr Miller says.

“KiwiRail has already replaced its aging North Island locomotive fleet, and this latest tranche of funding will fully cover the cost of replacing our South Island locomotives, many of which are more than 40 years old, and purchasing new electric shunt locomotives.”

“It’s allowing us to build a new hub for maintaining South Island rolling stock at Waltham (Christchurch), and we will build a new facility at Hillside Workshops (Dunedin) to assemble wagons in New Zealand.

“The Budget includes a large contribution to the National Land Transport Fund to raise the national rail network to a resilient and reliable standard after decades of under-investment.”

Mr Miller said the investment will benefit the regions and sets KiwiRail on a clear pathway to business sustainability.

“As a result of Budget 2021, more than 600 contractors will be needed to upgrade and build the new facilities, particularly in the South Island, and local businesses will be needed to supply building materials.

“The investment also means that KiwiRail will be taking on around 200 more employees – for ongoing track maintenance and renewal work across the country and wagon assembly at Hillside. We have committed to 10 per cent of new staff being apprentices or trainees.

“This all means money going back into the regions, and helping New Zealand recover from the economic impacts of Covid-19.

“But it’s also important for the future of KiwiRail and its customers.

“When we have new locomotives and wagons, and a rail network that is up to standard, we will be able to provide more reliable and timely services to our freight customers to better meet their needs.

“We know there is more demand for rail freight than we can currently provide with our aging assets. 

“The Government’s significant investment in KiwiRail is bringing us into the 21st Century with a secure future and will allow us to really grow rail for the benefit of New Zealand.”

Budget 2021 summary - $1.34 billion

$722.7 million (over 6 years): allows KiwiRail to complete the purchase of essential new mainline locomotives, shunt locomotives and wagons, to replace those which are at the end of their useable life; complete upgrades to maintenance facilities which are no longer fit for purpose (build a new Waltham Mechanical Hub and upgrades to various depots around the country – supporting around 450 construction jobs); and install safety enhancements on freight trains in metro areas.

$449.9 million top up to the National Land Transport Fund (over 2 years): to fund the first three years of a 10-year plan to raise NZ’s rail network to a resilient and reliable standard. The pipeline of work will create at least 150 network jobs in KiwiRail.

$87.3 million final instalment of working capital for Core Asset Management (over 3 years): to ensure core freight, tourism, and property assets can be maintained until new rolling stock/ferries/facilities are operational.

$85 million (over 5 years) to build wagon assembly facilities at Hillside Workshops: this investment adds to the previous $20m Provincial Growth Fund investment to upgrade the existing maintenance facility at Hillside. The two initiatives together will revitalise Hillside as the core project workshop for KiwiRail in the South Island. Building the wagon assembly facility will support around 150 construction jobs, and assembly will create around 45 operational jobs, including apprentices.