07 March 2008

Greens worship at the altar of rail with your money

Worshipping at the altar of a railway line. The Greens are advocating forcing taxpayers to pay to bail out a foreign company that owns the provision of railway services - Toll. A party that tends to be at best sceptical of capitalism and loathes foreign companies is seeking to give it a free ticket out of New Zealand with a big hand out of taxpayers' money. What an incredible sell out all to worship the altar of the railway.

The Greens love railways more than any other mode of transport. So even in an age when oil prices are at a record high, when rail cannot compete for most freight efficiently, there are major problems with rail freight being competitive for most freight in New Zealand. This puts paid to notions that "we need" railways in an age of expensive oil - it seems that it STILL isn't cheaper to send most freight by rail for all sorts of reasons (e.g. double handling, speed, inefficiency of compiling trainloads of wagon or less than wagon load lots).

Sadly the Greens are woefully ill informed about the railways at all. Jeanette Fitzsimons claims there isn't the revenue to pay for upgrades and “Nowhere is this more apparent to the public than in the state of Wellington’s commuter rail services". What rubbish. For starters, the Wellington commuter rail services get around half their revenue from taxes - whether road taxes through Land Transport NZ, or rates from the Wellington Regional Council. Secondly, with comparatively new trains recently introduced on the Wairarapa line, and all of the older electric units recently refurbished (and a major upgrade of the track, signal and electrics infrastructure underway), the Wellington system is hardly in a poor state. Toll Rail's revenues are about freight, not passenger services. So she is either poorly informed or lying to get the public's sympathy.

She claims Toll "cannot afford to pay the track access fees that were always part of the deal with Government". Really? Does she have access to Toll's accounts? Could it just be gameplaying with a government that is soft on rail?

The government is already spending hundreds of millions of taxpayers' dollars on upgrading the rail network, but even that isn't enough. Why?

Well that is the question the Greens should answer. It isn't because trucks are underpaying to cover road maintenance costs, generally they aren't. It isn't because trucks have far higher environmental costs per tonne km than rail, because the government's own study points out that it varies considerably by route (in some cases rail is lower in some cases road is lower).

I suspect it quite simply is because - notwithstanding the low cost of RUNNING a train to carry a lot of freight, the handling of freight to load and unload a train, the time/cost of warehousing freight (effectively) in assembling/disassembling a train, the high capital cost of railway equipment, the limitations on the NZ railway network placed by many low tunnels (and almost always a slower alignment than roads), rail can't compete for most freight. It can compete for hauling bulk commodities, such as coal and milk, and to a lesser extent logs. It can compete for long hauled containers, but that's about it. Rail is a very heavy, capital intensive mode with its own corridors that, by and large, get little use compared to roads. For example, the Napier-Gisborne railway on average has one train each way every day. Imagine the road having one truck (or even the dozen or so that would replace the train). That one train would have to carry the full cost of maintaining and operating the line, whereas the road has many vehicles to spread the cost over.

Passengers are a peripheral activity, unlike the UK, in NZ long distance passenger rail is about scenic tourist trips by and large.

So the Greens might have to look beyond the altar of rail and dispassionately ask why it isn't working to do what they want. Given the very high cost of diesel, the notion that rail can "save the day" when it clearly is failing to do so, seems spurious. Similarly, as the environmental costs of road and rail freight are not that dissimilar, the alleged "green" benefits of rail freight seem equally spurious.

so when will the Greens stop worshipping rail, and start supporting evidence?


Anonymous said...

Actually, Liberty Scott, if rail is not as successful as you claim, then why is there such a locomotive shortage in New Zealand? The only reason why the hundreds of millions that have been poured into the network have done little is simply because there isn't the locomotives to move the freight around. What doesn't help either is that Toll has a monopoly on the rail lines, and other freighting firms (especially Mainfreight) are keen to use rail if it was ever offered as an option. If rail were opened up, I predict that you would find much more tonnage going onto the tracks.

The other thing is that bottlenecks are set to re-emerge in the next few years, and this will also act to create constraints on rail growth. The Otira Tunnel is more than likely the biggest one of those constraints, and I predict that it may be re-electrified.

Also, while some of the rail network has little usage, other parts get very heavy usage. The NIMT has a dozen freights daily, plus further freights that travel on a less frequent basis. Hamilton to Tauranga has a six daily freights, plus another two dozen on weekends. The Midland Line has a dozen daily freights.

The other thing is that the Wellington commuter rail services are still quite horrible. Have you been in one of the English Electric units? Fifty years old, and they are noisier than the Auckland ADK units. Once the new units come in and the upgrade is done, then I do agree, things will get much better.

In saying all that, I do not support Toll NZ being nationalised; I do, however, see the need for a decent rail system to carry items of freight such as milk, coal, logs and containers

Libertyscott said...

Fair point, but presumably it isn't worthwhile to buy more locomotives then. You're right on the monopoly, but I doubt that others would invest a lot in rolling stock under the circumstances.

Wellington isn't bad, but it has been getting upgraded in recent years - though entirely due to government funding.

Anonymous said...

Actually, it is worthwhile for Toll to purchase new locomotives; however, before they can do so, two issues need to be resolved. Issue one is the Track Access Charges - the minute that Toll buy new locos, they are essentially agreeing to the TACs, and of course, they want their lower price. Issue two is the axle load. Presently, we have an 18 ton axle load. Ontrack want to upgrade it to 20 ton (the QR standard); but Toll want it upgraded to 22 ton (the Australian standard gauge standard). The axle load will determine what type of new locomotives will be purchased. As a further note, the higher the axle load, the more potentially powerful the locomotives can be (since they can incorporate heavier machinery)

Also, about the Wellington upgrade; it is politically unviable to not upgrade the system. Once usage gets beyond a certain point, then there are too many votes to be lost by allowing the system to rot; considering that per head of population, Wellington's rail usage is similar to Brisbane and Perth, it has reached the 'politically unviable point'.

Anonymous said...

If rail is not as successful as you claim, then why does Road Transport heavyweight Mainfreight think we need them. Even well known road transport lobbyist Mr Tony Friedlander has reportedly said the country needs trains. (Although this might be to atone his self-serving, now infamous suggestion of replacing Johnsonville Trains with buses).

There are any number of figures that can be drawn on to compare road transport to rail transport. Probably the statistics that are misrepresented the most by road lobbyists are the degree to which the task financially supports the infrastructure. This is because of the much greater number of local council roads than Transit Roads or at least the kilometrage as such. No revenue is directly retrieved from the road transport industry that I'm aware of for the upkeep of these roads.

Furthermore, roads have received a fortune in capital expenditure. This is creating motorways and road straightening, widening etc. Rail has not received this by any means. To a degree it was run down in the few years leading up to it's sale and is trying to catch up for the lost years

I think that a lot of the bulk freight should come off the roads perhaps and go to the rail and coastal shipping as the government intends.

Libertyscott said...

john-ston: Again good points, but if Toll wont pay Track Access Chargs now then it might say more about overall rail viability. It could be a try-on by Toll to get the state to subsidise the business.

Anonymous: Well let Mainfreight buy it, I wouldn't decide to close it, but let those who believe in it invest in it.

In fact all heavy vehicles pay road user charges to use ALL public roads. On average half of the cost of maintenance for local roads (it does vary) is recovered from road users through RUC and fuel tax, the rest from local ratepayers. However, local roads almost never compete with rail - rail is about long distance trips, which means state highways. Rail needs local roads too in most cases. However, I would agree with recovering the full marginal costs of road use from road users of local roads, but this will make hardly an iota of difference to rail, much as I wish I was wrong. I like trains.

The road capital expenditure has ALSO come from road users (except in the last couple of years). Rail would receive it if it could pay for it - the entire main trunk line electrification (including deviations) was paid for by taxpayers, not rail users.

You have to ask yourself why bulk freight goes by road. You might also note that coastal shipping competes far more directly with rail than with road - as it involves very long distances of travel. I suspect you have been listening too much to the anti-road lobby.

Anonymous said...

I don't think that Toll not paying TACs says anything about rail viability. What it says is that Toll is a shrewd player and is trying to maximise its profit (they have attempted to play hardball in Australia as well), as you said, essentially get the government to subsidise the long distance freight system.

The other thing was that the NIMT electrification was supposed to be self supporting; just no-one ever expected the price of oil would fall (it is somewhat ironic, people back in the 1970s never thought the price of oil would fall, and it did, and people now, think the price of oil will fall, and it is unlikely to).