11. DAVID BENNETT (National—Hamilton East) Link to this
to the Minister of Transport
What reports has he received on future freight movement in New Zealand?
Hon STEVEN JOYCE (Minister of Transport) Link to this
I have received a number of reports on a turn-round plan for freight services for KiwiRail, and, together with the Prime Minister, I was pleased to announce this morning the investment of $250 million, with a commitment in principle to a further half a billion dollars, to support this plan. A stronger, self-sufficient KiwiRail will help to increase New Zealand’s economic productivity and assist us on the path to faster growth. The Government’s investment reflects the fact that the amount of freight that is moved on New Zealand’s transport network will double by 2040. All transport modes will need to become more efficient in order to meet this demand.
KiwiRail is committed to a turn-round plan that is designed to see the rail freight business become financially sustainable within a decade, by getting it to a point where it can fund its renewal and infrastructure investment costs solely from customer revenue. In fact, the lion’s share of the turn-round plan will come from within the business itself. The Government intends to invest a total of three-quarters of a billion dollars, with final decisions being subject to individual business cases submitted over the next 3 years.
Achieving this turn-round will be a challenging process requiring the combined support of, firstly, the Government as shareholders on behalf of taxpayers, and, secondly, every KiwiRail customer, the management and staff, the unions, and the regional councils, in terms of their involvement with metropolitan commuter rail services. KiwiRail will need to focus on the areas where it can increase revenue, improve its price to customers, become more efficient, and carry more freight, particularly bulk and long-distance freight.
Hon Darren Hughes Link to this
Why is there such an imbalance in the Government’s policies to address the efficiency of moving freight around the country, with his roads of national significance receiving $11 billion and rail getting only up to $750 million under the package announced today, when the doubling of the freight task that he talks about will be largely in bulk commodities—something for which rail is ideally suited?
The member is incorrect. The plan actually calls for a total of $4.6 billion to be invested over 10 years, most of which comes from within KiwiRail. That compares favourably, in fact, with the $10.7 billion for roading over 10 years, when one considers that roads currently carry 70 percent of freight. I say, for the benefit of the member, that the major point of difference is that road freight—and this investment in roading—is paid for by road users. The purpose of this plan is to get rail freight to the same point as road freight, where it can pay for its own capital and its own maintenance costs.