How KiwiRail is optimising funding to improve the New Zealand rail network

With its fast-growing urban centres, challenging geology and topography, the case for developing New Zealand’s rail network is growing. But with a shallow industry resource pool, what will it take to expand the ageing network and see it moving more people and freight?

Peter Reidy of KiwiRail says that with much of the infrastructure – 3700km track, 106 tunnels, and 1367 bridges – now more than fifty years old, upgrading the network amid resource constraints will be no small matter.
But with a transport sector-wide collaborative approach, big things can happen.

“There are challenges everywhere, so we all need connected thinking and close collaboration to identify the trade-offs, risks and gaps between all the different intersections that exist within major transport projects – whether that is a new bridge, roundabout, or branch line.

“In rail things can often be quite siloed. So, we need everyone on board and working together in network delivery and planning, just like we have done in the past, in the aftermath of major climate disasters.”

Good track record

Indeed, in 2016, after the Kaikōura earthquake, New Zealanders joined forces to rebuild State Highway 1, the South Island’s Christchurch to Picton line, and associated services.

“It worked because there was a clear political direction and shared vision. Leaders were well connected and so were their teams, which made it easy to optimise the talent. And there was a high degree of collaboration between design and delivery partners.”

Similar outcomes were also seen with the Pūhoi to Warkworth highway project, when delivery partners worked with private and public investors, to improve the highway’s pavement system.

“We all worked together and achieved a great outcome. Yes, it involved some risk taking with the higher upfront capital costs; and there was some technical complexity along the way. But it was ultimately a success.

“Today the highway is a vital part of the transport network, maintenance costs are lower, and the passenger ride experience is better.”

Integration is essential

Just as stakeholders should work together, so too should elements of the transport system.

My Reidy said an integrated network will help decrease domestic and international supply chain costs and ensure exports are competitive in overseas markets.

“Customers and supply chains both need different transport modes working together. This involves an integrated approach to transport planning, right from the outset, with all parties understanding the trade-offs and risks.

“Major freight customers are attracted to rail or road because of the integrated network benefits to their business which help reduce supply chain costs and prove their competitiveness,” Mr Reidy said.

That said, one likely outcome with an integrated approach is the increased penetration of rail, as New Zealand strives to meet its sustainability targets.

“When investing in transport infrastructure, government needs to value social and public benefits, such as time and congestion savings. In the case of rail, that is 20 million hours of driving in Auckland and Wellington avoided, thanks to the metro rail service.”

In addition, the recently released Benefits of Rail report from the Australasian Rail Association (ARA) shows that rail brings $3.3bn to the New Zealand economy each year.

Of the $3.3bn, $1bn is a GDP boost and $2.3bn are public benefits. These include $1.533bn in time savings and reduced congestion, $291m in reduced health impacts, and $161m in reduced road usage which avoids 200 deaths annually.

In the last financial year, KiwiRail also helped avoid one million truck trips, 85 million litres of fuel, and 229 434 tonnes of Co2-e, by transporting 3482 million net tonne km.

These figures will likely increase as the population becomes more climate-conscious, and more businesses begin to favour suppliers with environmental credentials.

“With one freight train carrying the same load as 40 trucks – and saving 70 percent more emissions than road – rail has a clear advantage for freight movers, commuters and tourists. It’s far more efficient and creates less wear and tear on its supporting infrastructure. So a logical choice when considering New Zealand’s decarbonised future.”

Overcoming constraints

Despite the sector’s advantages and good track record in teamwork, Mr Reidy said there is no room for complacency in the task ahead.

Historically, rail has been under-funded, leading to widespread deterioration of the network – a situation that has only begun to change since 2019, and the injection of $9 billion funding.

This has enabled KiwiRail to begin restoring the Auckland and Wellington metro and the national freight network’s condition to improve safety and reliability for our customers.

And while transformative projects such as the City Rail Link signify a new and improved chapter for metro passenger rail services in New Zealand, the true measure will be the growth in passenger numbers because of improved experience and journey times, Mr Reidy said.

“Improving reliability isn’t just about physical upgrades, it’s about how well projects perform when they come to fruition. It’s about condition of the track, its ability to run with minimal speed restrictions, and withstand big weather events without major disruption and the ability for the train operator to deliver frequent services on time for freight customers and passengers.

“We are delivering major CRL readiness projects on the Auckland metro and we will know we have succeeded for passengers when the City Rail Link is working well for the people who rely on it,” he said.

Further insight

Talking more about KiwiRail’s priorities for the year ahead, Peter Reidy will present at the upcoming New Zealand Rail Conference, hosted by Informa Connect.

This year’s event will be held 16-17 October at the Aotea Centre Auckland.

Register your tickets here.

About Peter Reidy 

Peter Reidy is Chief Executive of KiwiRail – the owner and operator of New Zealand’s rail network. Rejoining the organisation in 2022, Peter has led KiwiRail through a series of major projects and upgrades across the rail network, including the delivery of more than $3bn of government investment in capital works on the Auckland and Wellington metros.

Formerly CEO of Downer New Zealand, Peter has held senior leadership roles with Downer Group in Australia and Singapore, including Board roles on the KeolisDowner Joint Venture operating Yarra Trams in Melbourne, and Gold Coast Light Rail. More recently, Peter was Co-Chair of the NZ Government Construction Accord.