Study highlights rail’s value to New Zealand

Rail is delivering up to $1.5 billion a year to New Zealand in hidden benefits, according to a study prepared as part of a joint KiwiRail/NZTA team looking at integrated transport planning.

“That far exceeds what the taxpayer is spending on rail,” KiwiRail Chairman Trevor Janes says.

The study, carried out by professional services firm EY, looked at some of the wider economic benefits the rail network brings to New Zealand.

“The areas where rail is delivering for New Zealand include cutting congestion, reducing greenhouse gas emissions, improving safety on our roads and lowering spending on road maintenance and upgrades.

“These benefits do not show up on the balance sheet, but they are very real, and they make a huge contribution to New Zealand.

“They need to be considered when choices are made about the transport options available, and how to allocate resources.”

Mr Janes says the biggest contribution from rail comes from the reduction it brings in road use.

“Rail is taking cars off the road and it’s taking trucks off the road. That is saving the country $1.3 billion a year because it cuts congestion for all road users, including other freight movers.

“The study found that without rail there would be the equivalent of an additional 100,000 daily car trips on our roads each year - 76 million light vehicle hours reduced through rail – and 57 million of those hours were on Auckland roads.

“Rail also means heavy vehicles such as trucks are on the roads for 11 million fewer hours each year – the equivalent of 30,000 trucks driving for an hour every day.

“Using rail cuts New Zealand’s carbon emissions by 488,000 tonnes a year. That is the equivalent of taking 87,000 cars off the road, saving millions of dollars. Rail freight has 66% fewer carbon emissions than heavy road freight which is useful for New Zealand reaching its ambitious climate change targets.

“New Zealand has a road toll issue with deaths on the road rising markedly since 2013. Taking trucks and cars off the road makes for a safer New Zealand with EY estimating that because we have a rail network, there are 271 fewer fatalities and injuries on the roads.

“Most importantly, that means fewer Kiwi families suffering the heartache that road accidents bring.

“In economic terms, it means $60 million in savings.”

The approach taken by EY was to model what it would mean for the roading network if there was no rail network.

“EY took a conservative approach. For example, in considering the economic cost of road accidents it took the same approach as the Ministry of Transport. If it had calculated the cost of road crashes the same way as ACC does, the savings from road incidents would have been more than $100 million.

“The numbers produced reflect the value of rail at a point in time. We will continue to refresh the data with our transport stakeholders, ensuring we are reflecting the changing nature of rail in New Zealand.

“There are further benefits which are not quantified in this report such as the economic benefits rail brings to the regions through network resilience, land use and value uplifts, together with benefits from its tourism and freight businesses.

“It is also important to note that the study reflects similar work done in Scotland, Australia and the wider United Kingdom.

“This study is an important contribution to the transport debate and underlines the value of rail to New Zealand,” says Mr Janes.


The report can be found here.


Facts at a glance:

  • Rail contributes up to $1.5 billion in often unseen benefits to New Zealand each year.
  • The value of rail to New Zealand far outweighs its cost to the taxpayer.
  • Using rail reduces the number of deaths and injuries on our roads by a net 271 a year.
  • Rail saves taxpayers money on congestion, road maintenance costs, injuries and fatalities and reduced carbon emissions.
  • Reducing congestion saves $1.3 billion, the equivalent of 100,000 fewer daily car trips and taking 30,000 trucks off the road for an hour a day.
  • Reducing carbon emissions by 488,000 tonnes a year - the equivalent of taking 87,000 cars off the road - saves $8.5 million.
  • Improving safety outcomes saves $60 million.
  • Reducing road maintenance saves $63 million.
  • Rail is also an important and sustainable economic contributor to the regions and links New Zealand to export markets overseas.



Q: Why was this study undertaken? 

A: The 2016 study was commissioned by NZTA in conjunction with KiwiRail and other agencies as an aid to decision making on policy and to inform stakeholders of the wider benefits of rail that may not be captured within traditional financial statements.

Q: Has this type of study been done elsewhere? 

A: Yes, this type of study has been undertaken to help further understand the benefits of rail in the United Kingdom, Australia and Scotland.

Q: Who was involved in developing the study? 

A: General consensus was achieved on the methodology from all stakeholders including; NZTA, KiwiRail, Treasury, Auckland Transport, and Greater Wellington Regional Council (GWRC). The study was carried out by EY.

Q: Why is this being released now?

A: This study is a snapshot of the value of rail in New Zealand at a point in time. It is an important contribution to the transport debate in New Zealand and by providing this information it informs the discussion that is already going on.