So where IS rail viable?

Now despite all the doom and gloom about the rail network, the truth is that SOME of it is commercially viable. To show this I wanted to link to a map of the network on Ontrack's website - Ontrack being the state owned enterprise responsible for the railway network, but it doesn't have one.

Wikipedia does though here >>>>

Now of that network, you can split rail into five main businesses: Coal, logs/wood products, containers, milk and commuter passenger rail. The long distance passenger rail services by themselves could never sustain any of the lines. There is other freight, but it also is of a far smaller scale than any of the others, worthwhile on a marginal basis but not on its own in most cases.

Coal is predominantly West Coast to Lyttelton, but also some from Southland to Timaru and within Waikato (Rotowaro to Mission Bush). The West Coast line is viable for coal and that's it. The other services rely on other freight to bear the cost of the lines.

Logs/timber traffic is carried predominantly Murupara-Kawerau-Mt Maunganui or Auckland. Also Kinleith to Auckland/Mt Maunganui. There is some activity in Northland and Wairarapa to Wellington. However, it is the Bay of Plenty timber traffic that matters. Despite popular misconceptions, logs are not important freight on the Gisborne line (nothing really is, despite some forecasts in recent years). There is certainly insufficient log traffic for any of the Northland lines to be viable, with only the Murupara-Kawerau-Mt Maunganui/Auckland, and Kinleith lines really retaining enough traffic to be viable.

Container traffic is essentially movements between main centres and ports. The viable routes here are the North Island Main Trunk line, and the main southern line from Picton to Christchurch/Lyttelton and down to Dunedin/Bluff, with worthwhile flows between Waikato and Mt Maunganui. Beyond that, there really isn't enough freight to Taranaki or Napier to sustain those lines for this traffic.

Milk traffic forms the last major freight traffic on the lines. These movements are mainly southern Hawke's Bay - Manawatu - South Taranaki, Southland-South Canterbury. Again, these largely use routes carrying other freight, but do help sustain them.

As far as commuter rail is concerned, in Wellington it has a future, although the Johnsonville and Melling lines are not at all viable, money is being poured into it all so is really a sunk cost. In Auckland it is a major waste of money, but again partly a sunk cost.

So what is left? Well surprisingly quite a lot of the network is probably commercially viable, but frankly there are quite a lot of lines that have no economically viable future, unless some major freight customer wants them:
- All lines north of Waitakere in Auckland (expensive to maintain, low capacity)
- Rotorua and Taneatua branches (simply no viable freight)
- Napier-Gisborne (with big questions to be asked about Napier south to Oringi).
- All lines in Taranaki except south of Hawera (some expensive to maintain)
- Masterton to Woodville (mainly useful as a diversion for the main trunk line!)

The reason others are worthwhile comes down to either a single major customer, or having enough general freight. The latter is really just the north-south main trunks in both islands. Now if the government could only swallow those closures (or simply opening lines Toll doesn't want to operate to others if they wish), then there might be a viable railway for the trunks and the few bulk commodities that rail can handle well.

What does THAT network look like? Well this:

Not so bad really, with dotted lines where lines probably should close in the next few years (Napier, Southland and New Plymouth). Beyond that if Solid Energy, Fonterra and the forestry sector want rail, they should buy it - since all of the lines outside the main trunk are almost entirely about them. There is no reasons for the state to subsidise their freight movements.

Certainly the track is not worth the nonsense "replacement value" capital worth on the Crown's books of NZ$10.648 billion as listed in Ontrack's annual report. Now this DOES include some prime real estate, like Wellington railway station. That is where there certainly is some value, but $5.4 billion book value for railway infrastructure is simple accounting sorcery. No one would pay that for it, not in scrap and certainly not to charge someone to use it. If the government offered it for sale, that is not what it would go for, nothing close. The $4.9 billion for the land is similarly so, given that most of the land is a sliver of a corridor.

Oh yes I did forget one thing, the ferries. They ARE worth a good bit of money - the only consistently profitable part of the railway system for decades.