NZ | Rail + Freight

[jarden]

Also the Dunedin to Invercargill line has been on that catergory for some time too

[greenwelly]

Originally Posted by jarden

Also the Dunedin to Invercargill line has been on that catergory for some time too

Although, with the talk of solid energy making lignite briquettes at Mataura, and the continuing dairy expansion and talk of a spur to clandeboye, there is at least a possibility that line may actually remain.

Almost everyone admits the Gisborne line will die unless someone can find some serious $$$ to upgrade it.

[Moveax]

There are two ways to make KiwiRail profitable; one is do a slash and burn and destroy any rail line currently not making a profit. The other way is to actually put the lines to good use.

I think I know which one this government prefers.

A lot of these lines that are at risk of closure have a reasonably good chance of becoming useful sometime in the next few years. For example as mentioned the lignite and dairy expansion in Southland.

[cambennett]

Originally Posted by Moveax

There are two ways to make KiwiRail profitable; one is do a slash and burn and destroy any rail line currently not making a profit. The other way is to actually put the lines to good use.

I think I know which one this government prefers.

A lot of these lines that are at risk of closure have a reasonably good chance of becoming useful sometime in the next few years. For example as mentioned the lignite and dairy expansion in Southland.

I can't see the government taking a long term view on this at all. They will just want Kiwirail in the black as soon as possible. Closing lines sounds like something they would do.

[Richard7666]

I haven't heard anything about closing Dunedin-Invercargill, where'd you hear that? There is a lot of rail in Southland compared to other provinces, perhaps you're thinking of Invercargill-Ohai? http://en.wikipedia.org/wiki/Wairio_Branch

[UglyBob]

Originally Posted by Richard7666

I haven't heard anything about closing Dunedin-Invercargill, where'd you here that? There is a lot of rail in Southland compared to other provinces, perhaps you're thinking of the Invercargill-Ohai line?

If the Invercargill-Dunedin line was up for closure I'm sure Fonterra wouldn't be spending $45m on a storage hub at Mosgiel to shift dairy product by rail from Edendale etc to Port Chalmers.

[darkhorse09]

I say who ever is running kiwi rail...sack em!! Govt owns kiwi rail so it needs to employ better management to foresee any financial down fall. no good putting kiwi rail on notice when the govt brought it. Dah..

[otumoetaiNZ]

Originally Posted by greenwelly

Although, with the talk of solid energy making lignite briquettes at Mataura, and the continuing dairy expansion and talk of a spur to clandeboye, there is at least a possibility that line may actually remain.

Almost everyone admits the Gisborne line will die unless someone can find some serious $$$ to upgrade it.

Yeah no point in having that line unless some major development goes on in Gisborne. Stats nz say theres going to be a steady decline in population for the foreseeable future and no major industries are likely to pop up there so it makes sense to axe the rail line.

[otumoetaiNZ]

Originally Posted by darkhorse09

I say who ever is running kiwi rail...sack em!! Govt owns kiwi rail so it needs to employ better management to foresee any financial down fall. no good putting kiwi rail on notice when the govt brought it. Dah..

I heard the boss of kiwirail talking about the loss of the $90m subsidy and theyve known it was coming for some time. He said the passenger services are running at a profit but the freight services arent. Poor management? Or perhaps the gov need to regulate how freight is moved around the place like they did in the 80s?

[otumoetaiNZ]

At least he likes the transalpine and transcoastal train services. They do need to be upgraded tho and it takes forever to get from christchurch to picton.

http://www.stuff.co.nz/national/poli...n-Joyce-backs-
TranzAlpine-train

[cambennett]

Originally Posted by otumoetaiNZ

I heard the boss of kiwirail talking about the loss of the $90m subsidy and theyve known it was coming for some time. He said the passenger services are running at a profit but the freight services arent. Poor management? Or perhaps the gov need to regulate how freight is moved around the place like they did in the 80s?

I don't think anyone (other than Stephen Joyce) espected Kiwirail to start making a profit straight away. It needs a shitload of money pumped into it after 20 years of under invstment and neglect.

[cambennett]

Company would 'double' spending on rail if KiwiRail improves
Updated at 10:49am on 29 September 2009

Mainfreight says it will double the amount it spends moving cargo on the railways if the Government changes KiwiRail to a more commercial model.

The freight company spends more than $20 million per year on rail, but says it needs more rail services to be able to move more freight off the roads.

KiwiRail expects no state subsidies from next year onwards and Transport Minister Steven Joyce wants it to move to a more commercial footing.

Mainfreight's chief executive Don Braid says the company would expect to benefit from such a move.

He hopes better services would be offered, saying for instance, sending freight by railbetween Auckland - Christchurch takes two to three days.

Mr Braid also says he would like to see more business professionals than politicians on KiwiRail's board.

The Labour Government paid $690 million for KiwiRail in July 2008.

Four months later, the Treasury issued a valuation showing it was worth $448 million.

[NZ1]

Originally Posted by cambennett

I don't think anyone (other than Stephen Joyce) espected Kiwirail to start making a profit straight away. It needs a shitload of money pumped into it after 20 years of under invstment and neglect.

To be honest, I don't think he ever did either. However, from what I have read, the real problem lies in the freight business. It'll be interesting to see what comes out in the wash there.

[Moveax]

If he expects KiwiRail to become profitable as soon as possible he better be ready to spend money on new lines/sidings, wagons etc because right now there is very little KiwiRail can do with what they have.

[metroman]

This is a shame. It would be interesting to speculate on how much modern rail infrastructure would add to the nation's GDP.

[otumoetaiNZ]

Originally Posted by Moveax

If he expects KiwiRail to become profitable as soon as possible he better be ready to spend money on new lines/sidings, wagons etc because right now there is very little KiwiRail can do with what they have.

I dunno, I think that kiwirail are still stuck in the past a bit thinking that only new equipment can solve their problems. From what I understand theres plenty of wagons and engines available for additional services which is what the freight industry wants. They may not be best but at least theyd do the job to start with. The public transport side is going to still receive subsidies though.

Weve already invested nearly a billion on Kiwirail already so I can understand why the gov dont wannt to spent too much more just now. Mind you cancelling projects like waterview would provide some ready cash.

[buildemhigh]

Originally Posted by otumoetaiNZ

I dunno, I think that kiwirail are still stuck in the past a bit thinking that only new equipment can solve their problems. From what I understand theres plenty of wagons and engines available for additional services which is what the freight industry wants. They may not be best but at least theyd do the job to start with. The public transport side is going to still receive subsidies though.

Weve already invested nearly a billion on Kiwirail already so I can understand why the gov dont wannt to spent too much more just now. Mind you cancelling projects like waterview would provide some ready cash.

I must agree with you re stock..

I would think the biggest problem is the cost paid for the thing in the first instance.. Blaming Labour now though is not really going to get anyone anywhere, but nor is being overly critical of National over taking a cautious approach to capex this early in the piece. It is inevitable that lines will be closed over time.. traditional industry and commerce has moved away from some (particularly Rural) areas over the years, and it seems obvious atleast initially to service (properly) the profitable regions..

I have my doubts about how long, if ever Kiwi rail will take to get out of the red, however its probably better to have the destiny of it in the Governments hands than a company whos only interest is in their bottom line.. In this regard I think Labour did the right thing by purchasing it off Toll..

As for your comment re Waterview this is a much needed link in Akl..

[greenwelly]

Originally Posted by buildemhigh

I must agree with you re stock..

In this regard I think Labour did the right thing by purchasing it off Toll

Although they got severely screwed on the price, $300m would have probably been a better price, but you had a buyer who was doing it for politics not economics and was not prepared to walk away from the table.

Paying $300m and then having $3-500million to pour into Capex, would have been the optimal outcome.

[jarden]

It was back in the 90's when Wisconsin central bought kiwirail that they mooted closing the DUD-IVC line, I'm glad they didn't. they were to focus on Auckland-Dunedin as the main bussiness model. they brought in 24 hour service from AKL-CHC which was one of the best things they did to speed up the freight delivery. also there was talk of using the Gisborne line to carry logs from the vast plantations in the area what happened to that plan.

[buildemhigh]

Originally Posted by greenwelly

Although they got severely screwed on the price, $300m would have probably been a better price, but you had a buyer who was doing it for politics not economics and was not prepared to walk away from the table.

Paying $300m and then having $3-500million to pour into Capex, would have been the optimal outcome.

agreed completely.. toll must have laughed all the way to the bank... However the rolling stock is but a drop in the ocean compared to the cost to maintain the tracks.. I have heard that as high as 70% of the rail bridges in the Sth Island are nearing the end of their expected life... if this is true (which I have no reason to doubt the source) then by comparison the purchase price will become insignificant!!