Budget 2022 continues rail rebuild   

 Budget 2022 keeps the rebuild of our national railway on track with $661.5 million allocated for rail, KiwiRail Acting Chief Executive David Gordon says.  

 The investment includes:   

  • $312.3 million to continue the Government’s commitment to raising the standard of the national rail network 
  • $349.2 million to complete the like-for-like replacement of KiwiRail’s aging locomotives and freight wagons.   

 “KiwiRail is working across the country, to improve tracks, bridges and other rail infrastructure, through the Rail Network Investment Programme. We are working to lift the standard of our national network to ensure it is resilient and reliable, after decades of underinvestment,” Mr Gordon says.     

 “Previous Budgets funded the first three years of the Programme and Budget 2022 builds on this by funding the fourth year (2024/25). It gives us a solid level of funding certainty, which means we can better plan our work, manage costs and ensure we have the staff to carry it out.” 

 Mr Gordon says Budget 2022 also completes the Government’s commitment to renew KiwiRail’s outdated rollingstock.     

 “Running efficient, commercial rail operations benefits New Zealand, providing better supply chain capacity for moving freight and a low-emissions freight option for businesses.   

 “The $349.2 million enables us to purchase up to 29 new light-duty locomotives, specialist wagons and components which will make our wagon fleet more versatile.   

“This funding marks the completion of our asset replacement and facility upgrade programme, which has already received $1.6 billion funding through Budgets 2019 to 2021. It is bringing KiwiRail’s end-of-life locomotive and wagon fleet into the 21st Century.”    

 Mr Gordon says KiwiRail is in the midst of an exciting transformation which will make better use of the rail network for New Zealanders and enable the State-Owned Enterprise to have a strong commercial future.  

 “Budget 2022 lifts the Government’s investment in KiwiRail to $8.6 billion, allowing us to procure assets and undertake a range of rail projects.   

 “For example, with funding received so far, we have purchased 57 low-emissions locomotives for use in the South Island, which are due to begin arriving in early 2024; 16 zero-emission shunt locomotives which are now in service; and we are currently in the market for larger, low-emission shunts. 

 “Funding has also allowed us to purchase more than 1,300 freight wagons; and seismically strengthen and update maintenance facilities across the country. We are in the process of rebuilding Dunedin’s Hillside Workshops, where we expect to begin assembling around 1,500 more wagons late next year, creating new skilled jobs.   

“We are very thankful for the Government’s support, which has been substantial. It is setting up rail in New Zealand for a bright future.”  

While trains have 70 percent fewer emissions per tonne carried compared with heavy road transport, KiwiRail carries only about 12 percent of the national freight task.      

 “Having tracks that are up to standard and funding certainty to make sure they stay that way, as well as having efficient, reliable locomotives and wagons, means we can offer better freight services to Kiwi businesses,” Mr Gordon says.   

 “These are the crucial building blocks that will enable more freight to be moved on rail, reduce transport emissions, and underpin KiwiRail’s strategy for commercial growth and self-sustainability.”   

 ENDS 

 Note:  

 The $312.3 million network investment will top up the National Land Transport Fund to contribute to the cost of rail work in 2024/25.   

  • The Land Transport (Rail) Amendment Act 2020 introduced the new Rail Network Investment Programme (RNIP) which requires KiwiRail to prepare a ten-year investment programme, in line with the Government’s strategy for rail.   
  • The new model came into effect on 1 July 2021, enabling KiwiRail to access the National Land Transport Fund (NLTF) to deliver the RNIP.   
  • Budgets 2020 and 2021 included funding to top up the NLTF and contribute to the first three years of the RNIP. The Budget 2022 allocation continues the investment by funding the fourth year.   
  • KiwiRail’s freight operations pay a Track User Charge (TUC) into the NLTF, similar to how road freight operators pay a Road User Charge (RUC).   

 The $349.2 million completes KiwiRail’s like-for-like rolling stock replacement programme. It will fund: 

  • Up to 29 light-duty locomotives to replace KiwiRail’s existing DF and remaining DC locomotives. The new locomotives will be low emissions and will primarily be used for freight on branch lines. Some will be used to pull KiwiRail’s Scenic tourism services and for Te Huia and Capital Connection inter-regional passenger trains.  
  • 140 replacement hopper wagons (for transporting a range of raw materials, such as grain, lime, woodchip, biomass or coal). This investment will replace about 40 per cent of KiwiRail’s existing end-of-life hopper wagon fleet.  
  • Replacement cassettes and bolsters (used to convert standard flat top wagons for use transporting logs) to allow about 60 per cent of our end-of life forestry wagon fleet to be retired.  
  • Box wagon side curtain containers (used for moving non-containerised freight, such as paper, food stuffs and general freight), which will replace the majority of our existing box wagons.    

 The Government has previously invested $3.5 billion in KiwiRail through Budgets 2019, 2020 and 2021. In addition, a range of rail projects have been funded separately, including through the NZ Upgrade Programme and Provincial Growth Fund.