NZ | Rail + Freight

[KaneD]

Good comments cleangreen... The problem is that the government (and Kiwirail executives) all seem to be playing the line that it's better to not spend $4m to repair a line that will break even, when they can mothball it, lay off some staff and save $10.

Saving $10 per year means $10 per year more profit than it would be if they spend $4m to keep a non-profitable or break-even line open... yes, the government 'is' that short-sighted they will do anything to save a measly ten bucks.

[SYDNEY]

KiwiRail tracking ahead of budget

KiwiRail, which runs the nation's railway network, is tracking ahead of expectations after the first three months of the financial year, but is still conscious of the need to keep a lid on costs. The state-owned enterprise's group revenue was ahead of budget in the first-quarter on increases in forestry, import/export and domestic freight volumes, chief executive Jim Quinn told a public meeting in Wellington. The rail operator had also reported increases in freight on the interisland ferries, and its passenger services were in line with expectations. "The outlook for this financial year is promising as group revenue is slightly ahead of budget," chairman John Spencer said. "We have to remain focused on cost containment and a better way of operating to ensure we meet our targets and drive as much of the revenue growth as possible to the bottom line." Earlier this month KiwiRail mothballed the Napier-Gisborne line saying the cost of re-opening the track wasn't worth it. The rail operator is on a drive to strip out $200 million in annual spending if it is to meet forecast earnings of $64.6 million by 2013. The railway operator missed its statement of corporate intent revenue target of $737 million, as it posted annual sales of $71.58 million in the latest financial year.

[SYDNEY]

'Strong case' to reinstate rail link - report

The decision to mothball the Napier-Gisborne railway line was based on flawed analysis, according to a report by Berl economics. KiwiRail decided in October to mothball the line, which had been closed since major storm damage last March. The line carried about 45,000 tonnes a year, but supporters said they had found producers who would put about 180,000 tonnes on the service. The report was commissioned by opponents of the mothballing, the Tairawhiti Environment Centre, and made public this morning. KiwiRail chief executive Jim Quinn dismissed it as a "a brief desk-top assessment of a highly complex business case". In the report, economists question why KiwiRail is predicting revenue of $14-15 per tonne a year between this year and 2022, when last year it was $23.55 per tonne. The difference "calls into question the costing figure and the revenue figures behind the financial analysis in the report", the Berl report said. It said there was a "very strong case" for national and regional governments to take responsibility for restoring the capital that was run down while the line was under private ownership. It also said KiwiRail wanted to make the line commercially viable within 10 years, where an economic view should take account of long-term impact on a region ... MORE

[jarden]

The Gisborne line has been closed down, because the very influential NZ trucking lobby wanted it closed, plain and simple. So they can have all the freight market in Gisborne/East Cape area to themselves. Its not the first time this has happened in NZ and wont be the last. The first was the Nelson line closure in 1955, its another similar example.

[mathlete]

Wait, Nelsen had a railway?

[Moveax]

It was an isolated section of railway. The track went from nelson to glenhope, but I think construction progressed further than that minus the rails. It was supposed to connect to the rest of the rail network near ingangahua. There were also later proposals to connect nelson to the rest of the network via blenheim.

[KaneD]

Originally Posted by jarden

The Gisborne line has been closed down, because the very influential NZ trucking lobby wanted it closed, plain and simple. So they can have all the freight market in Gisborne/East Cape area to themselves. Its not the first time this has happened in NZ and wont be the last. The first was the Nelson line closure in 1955, its another similar example.

The Nelson line is probably not a great comparison because it wasn't connected to the rest of the network meaning that it would have always have been less efficient and the relative cost benefit on investing in completing the rail line wouldn't have been warranted since rail was already starting to decline.