Tuesday, June 24, 2008

$400 million more for the rails

Yes according to the NZ Herald, Ontrack, the state owned company responsible for the railway network, wants another $400 million to upgrade the rail network.

To which I say - fine - once the government owns the rest of the railway operations, let Ontrack borrow the money and repay it from track access charges from the people who will people from it - the rail freight customers.

Let's ignore this pleading from the Ontrack CEO, which is a try on to force YOU to pay for it:

"Compared with some other forms of infrastructure development, the planned investment in rail is modest and will enable rail to grow and take pressure off the roads - saving money, improving safety and benefiting the environment,"

It's modest! $100 for every man woman and child. So go on Cam Moore, start walking around your neighbourhood and ask for the money from every household, per person of course. See if THEY think $100 is modest. If you wont ask the customers, why not ask the people you REALLY want to force to pay for it?

and what is this "compared with other forms". You mean like airports which make a profit and pay dividends? You mean like telcos and power companies that do the same? You mean like the road network which generates enough revenue that it can reinvest in upgrading the network and throw 15% of its money at public transport (including YOUR network)?

How does it "save money", when your network costs more to maintain than the users are prepared to pay, but the road network generates more revenue than it costs to maintain? and safety and the environment? Well go on say how many lives it will save, and the environmental claims are dubious at best.

So good on you Ontrack, get the bucket out and go door to door to do fundraising, because the appropriate answer to the question "can taxpayers pay", should be rather obvious.

Great investment Dr Cullen, yep, economic genius.

2 comments:

Bigglesjames said...

You know, it is probably time to re-add up all the requests for investment in rail. The list is getting quite long and I am losing track.

In addition to the latest $400M from ONTRACK I recall we already have:
* The original $200M promised as part of the original deal with Toll (they were to purchase the equivilent amount in locos)
* There is the $800M to purchase the rail component of Toll
* I assume we will now have to complete the purchase of new locos that were promised by Toll that are probably still needed
* We have the roughly $800M from the Wellington Passenger Rail Business Case (including 78 new units, track improvements/upgrades, etc.)
* there is another $40M as part of the Western Corridor Plan for an additional 12 new units, extra double tracking and two (?) new stations
* There are some other bits and bobs in the Wellington RLTS around Freight
* Next to Auckland where I don't have good figures for their passenger rail but would start with the current Western Double tracking Project ($200M)
* Then the Onehunga Passenger Line implementation ($20M ?)
* The Rail electricifaction at maybe $1,000M
* Completion of the underground loop from Britomart won't have change from a Billion either
* The link tunnels to the North Shore of which rail would have to be some $100M's
* There are other rail enhancement projects also including rail extension into Northland, required improvement to the West Coast Line (for Coal)
* Finally there is ongoing speculation around other passenger rail projects including Wellington Light Rail to the airport, Christchurch commuter rail, Commuter rail from Hamilton and into both Tauranga and Dunedin)

Sorry, I don't have an overall total (I lost track about half way down the list), and I still think I missed some things, but this seems to rate the rail investment requirements somewhere amoungst the very biggest national commitments like defense . . . and we haven't even covered either operating subsidies or depreciation.

It will be interesting to understand what hospitals, schools and other things will be sacrificed to get more steel wheels into NZ.

john-ston said...

Well, bigglesjames, time to take a look at your list very carefully

"In addition to the latest $400M from ONTRACK I recall we already have"

The $400 million is intended to go into things such as reconstructing bridges that are almost a hundred years old and pose a safety problem, as well as replacing ancient track, which again poses a safety problem

"The original $200M promised as part of the original deal with Toll (they were to purchase the equivilent amount in locos)"

That was for maintenance catch-up. The condition of tracks was so bad that LTNZ was about to impose a blanket 40km/h speed restriction throughout New Zealand. Of course, the thing that annoys me is that Toll never bought the locos, and it doesn't look like the new operation is going to get many locos soon either.

"There is the $800M to purchase the rail component of Toll"

That was stupid - if Cullen really wanted the railway, then why didn't he buy it in 2003?

"I assume we will now have to complete the purchase of new locos that were promised by Toll that are probably still needed"

Yep, the rumours are that ten to twenty locos look set to be purchased for a cost of roughly $50 to $100 million. The other thing is that masses of wagons and so on are needed

"We have the roughly $800M from the Wellington Passenger Rail Business Case (including 78 new units, track improvements/upgrades, etc.)"

Well, the English Electric units that are approaching the end of their life after sixty years of service. What else were we going to replace it with? Nothing? Then how are we going to get Wellingtonians into Wellington? Further to that, thanks to high petrol prices, the Wellington train network has become far more popular for commuters, and naturally, you spend money where the demand is

"there is another $40M as part of the Western Corridor Plan for an additional 12 new units, extra double tracking and two (?) new stations"

The duplication was needed for the extension of services to Waikanae; I am not sure about the reasoning for expanding services that far north, although it might be that the feeder buses to Paraparaumu are getting more chocker by the day.

"There are some other bits and bobs in the Wellington RLTS around Freight"

I am not sure about these, so no comment

"Next to Auckland where I don't have good figures for their passenger rail but would start with the current Western Double tracking Project ($200M)"

Tranz Rail planned to duplicate the Western Line in the 1990s. That was only blocked because the ARC interferred. Again, that was a case of increasing capacity - prior to 2007, it was only possible to run services at half-hourly frequency from Waitakere through to the City. Considering the growth in Western Line services, I think it has been money well spent. Further to that, much of the cost was in track and sleeper replacement.

"Then the Onehunga Passenger Line implementation ($20M ?)"

Actually, the Onehunga Line was going to cost only $10 million. That is not only for passenger services, but is also going to be used for shunts to the Port of Onehunga. I can see this service becoming popular once it starts and going above the 300 expected.

"The Rail electricifaction at maybe $1,000M"

Well, I can carry on till I am blue in the face about electrification. Needless to say, much of the rolling stock needs replacement; and the benefits of rail electrification have been seen in Perth and Brisbane where there was a massive surge in passenger numbers in the years following electrification.

"Completion of the underground loop from Britomart won't have change from a Billion either"

That hasn't been announced yet and probably are another ten years off at least

"The link tunnels to the North Shore of which rail would have to be some $100M's"

Ditto

"There are other rail enhancement projects also including rail extension into Northland, required improvement to the West Coast Line (for Coal)"

The proposed Marsden Point branch is intended to be constructed so that you get more Port to City freight; like the Metroport trains that go from Auckland to Tauranga. It would certainly enhance competition between North Port; Ports of Auckland and Port of Tauranga.

Also, the Midland Line needs upgrade, for as you said, coal.

"Finally there is ongoing speculation around other passenger rail projects including Wellington Light Rail to the airport, Christchurch commuter rail, Commuter rail from Hamilton and into both Tauranga and Dunedin)"

That is mere speculation. I don't think that any of those proposals would come to light anytime soon.

"and what is this "compared with other forms". You mean like airports which make a profit and pay dividends? You mean like telcos and power companies that do the same? You mean like the road network which generates enough revenue that it can reinvest in upgrading the network and throw 15% of its money at public transport (including YOUR network)?

How does it "save money", when your network costs more to maintain than the users are prepared to pay, but the road network generates more revenue than it costs to maintain? and safety and the environment? Well go on say how many lives it will save, and the environmental claims are dubious at best."

While the road network may produce more funds than it costs, let us not forget that ordinary drivers are subsidising the trucking industry. The trucking industry only pays 58% of its costs, while rail pays 86% of its costs. While you are railing about rail, why not have a rant about how New Zealanders are subsidising the trucking industry.