MEDIA RELEASE

Tuesday 23 September 2003

Rail costs raise serious questions

The Government should identify all the costs of individual rail projects before it starts to throw road users’ money at them, Road Transport Forum CEO Tony Friedlander says, following the announcement of a $250,000 subsidy to Tranz Rail for the Napier-Gisborne line and the revelation that the cost of a mooted 19-kilometre rail link to the port at Marsden Point has more than doubled to $86 million.

“The Mayor of Whangarei has acknowledged that this is only the tip of the iceberg as far as just Northland is concerned. He is suggesting the whole of the North Auckland line needs to be upgraded for heavier trains and the floors of tunnels lowered to accommodate new high-sided containers. If it costs $86 million to build 19 kilometres of new track, how much will it cost for a major upgrade of the rest of the North Auckland line?

“At the moment these costs are coming out piecemeal and no one, including the Government, has any idea of the total amount that could be absorbed in making good deferred maintenance, upgrading the existing network or building new lines such as the Marsden Point link.

“The Government should find out how big the bill will be before investing any money anywhere.

“Provided the trucking industry is not expected to foot the cost, we are not opposed to Government subsidising rail. We suggest however that it would be simple common sense for the responsible ministers, Paul Swain and Michael Cullen, to make sure those subsidies are targeted at railway lines which have a reasonable chance of long-term survival.”

Mr Friedlander says that motorists whose petrol taxes are being used to subsidise rail should be particularly concerned about how much the cost will be and where the money will come from. “The Government admits not enough money is going into the roading network. It is talking about imposing extra costs on motorists through measures such as toll roads and regional petrol taxes to help fix the roading crisis.

“Yet at the same time an unspecified but potentially very large amount of money will be going into rail. It may well be a great deal more than the $200 million commonly quoted. North Auckland is just one area where the possible expenditure is potentially huge. “The $250,000 going into the Gisborne-Napier network is just an interim measure to keep the line open for 12 months. How much will a proper, long-term maintenance programme cost? The line, opened in 1939, has 80 bridges and viaducts. What would it cost to replace those at the end of their economic life?”

Mr Friedlander says these are just a couple of examples of areas where very large amounts of money might be involved, but questions can be raised throughout the entire network. “How much would the proposed extension to Fonterra’s Clandeboye dairy factory in Southland really cost? What is the condition of the Tranz Alpine rail network which is a major tourist train attraction as well as carrying vast quantities of West Coast coal to Lyttelton for export?

“The public deserves a detailed review of the total rail operation to determine which parts are sustainable long term. Any payments should only go into operations with an economic future which will make a positive contribution to the economy. Otherwise there’s a risk subsidies will be poured into supporting rail projects for political expediency.”

The amount of head-to-head competition between road and rail for freight is not great, Mr Friedlander says. Irrespective of the amount Government puts into rail, the road transport industry will continue to grow and be of vital importance to New Zealand’s economic future.

“This is not a road versus rail issue. The point is that the Government is entering into a commitment which all New Zealanders will have to pay for without having any clear idea of how much they will be up for. Given the shortage of roading funds and the possibility of new charges on motorists in particular, Government should identify and spell out the costs before sinking hundreds of millions of dollars in an adhoc way into rail projects.”

ENDS

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