The Government plans to pump money into developing coastal shipping facilities

The Government has signalled it intends to pump more money into developing New Zealand’s “blue highway” by bolstering the country’s coastal shipping facilities.

Although details are still sparse at this stage, Transport Minister Phil Twyford said this morning a funding announcement would be made before next year’s election.

Speaking alongside a number of other senior Ministers this morning, Twyford signalled the Government’s intentions to develop coastal shipping alongside rail.

“There is a lot of freight that can actually be shifted on the blue highway and so we want to get roads, rail and coastal shipping working together in an integrated way.”

This comes after the Government announced it would spend $1 billion on New Zealand’s rail network.

Although none of the $1b announced in the Budget was going into coastal shipping, the Government has an announcement planned in this area.

“We’re working on it, and we’ll get back to you on that,” Twyford said.

Deputy Prime Minister Winston Peters also signalled the Government’s plans for spending more money on the new maritime and roading initiatives.

He said the money spent on KiwiRail was to help get “these leviathans” – an apparent reference to trucks – off the road and give ratepayers and taxpayers a chance to build and maintain roads at an affordable level.

He said every other country in the world apart from New Zealand was doing this.

Asked if that meant the Government would be investing further into roads, Peters said: “You’re going to see balanced investment; in maritime, on rail and on roads.”

“All three modes of transport – they have always had a place in New Zealand, and they’ve got a place in our future.”

Peters and Twyford, along with Finance Minister Grant Robertson and Regional Economic Development Minister Shane Jones, this morning announced a few further details of the $1b KiwiRail spend.

By 2023, there would be 100 new locomotives and 900 new container wagons in operation.

The new funding would be used to replace some of the older trains, which, according to Peters, were “tired and worn-out”.

More details of the Government’s rail plans will be announced in the coming months, Twyford said.

Robertson added that the $1b spend was only the beginning of how New Zealand’s rail system is funded.

“I don’t believe there is anything within our budget on the economic side that emphasises wellbeing more than rail.”

KiwiRail spend: Hundreds of new locomotives and wagons

The government has revealed more details of its billion-dollar KiwiRail spend, with hundreds of new locomotives and container wagons coming down the tracks.

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Photo: Flickr

Deputy Prime Minister Winston Peters, Finance Minister Grant Robertson, Transport Minister Phil Twyford and Regional Economic Development Minister Shane Jones announced more details on the boost to rail this morning.

KiwiRail would be replacing and repurposing old and outdated stock, with more than 100 new locomotives and 900 new container wagons to be ordered and in place by the end of 2023.

Mr Peters said the government was addressing three decades of under-investment in the rail system.

“Part of the funding package will go towards replacing the tired and worn-out 50 year old locomotives in the South Island. We’ve kick-started the replacement process for more than 100 locomotives. New locomotives mean more reliable services and less maintenance costs.

“In addition, 900 flat-top container wagons will be replaced with new, larger ones in our busiest corridors, giving KiwiRail a more competitive freight service,” Mr Peters said.

Mr Jones said on top of the Budget’s $300 million for regional rail, the Provincial Growth Fund has already given $183m to rail to create growth in the regions.

“We’ve re-opened the Napier to Wairoa line, which will be crucial for the local forestry sector and is expected to replace 15,000 truck journeys each year on the region’s roads, making them safer and reducing wear and tear.”

Mr Robertson said the funding was only the beginning of a commitment to rail.

“The more freight we put on rail the better, it has a benefit for our emissions profile and also for the way that new Zealanders feel safe when they’re driving.

“Secondly, this will add to productivity. We know that if we can get out rail network humming across new Zealand we will be able to more efficiently move goods and people around the country.”

Mr Twyford said the country’s rail network has been in a “state of managed decline” for too long.

He said the government’s ‘Future of Rail’ report, due out in the coming weeks, would outline its 10 year programme of potential investment and benefits.

Key projects:

  • Continued work on the Kaimai Tunnel, Tauranga
  • Hoists and generators for Westfield and Southdown in Auckland
  • Parts replacement for engines, wagons
  • Freight reservation, booking and tracking system
  • Final payment on the 15 new trains in North Island – arrived October 2018
  • Replacing the oldest 48 long-haul and 52 short-haul locos
  • Replacing 900 container wagons – some of the older wagons will be repurposed for forestry haulage
  • Upgrades at Hutt Valley and Christchurch maintenance facilities
  • Design and procurement of two rail-enabled ferries

The Ports of Auckland says its dividend to the Super City will fall due to the cost of its investment plans

byStephen Forbes

The Ports of Auckland says the Auckland Council can expect a reduced dividend over the next two to three years as it pushes ahead with a major investment programme.

Auckland Council currently has 100% ownership of the port and it received an annual dividend from its shareholding of $51.1 million in the 2017/18 financial year.

But the port company has increased its debt by 30% since last year as part of an investment programme to increase its capacity and returns, despite the fact its long-term future hangs in the balance.

“We expect a reduced dividend stream [to Auckland Council] for the next two to three years, followed by an increased return in years after that as we get benefit from current investments,” Ports of Auckland spokesman Matt Ball says.

He says the investment programme includes container terminal automation, construction of a new car handling facility and investment in its new Waikato Freight Hub.

And according to the latest Auckland Council Group Performance Overview the port company has taken on more debt to pay for it.

“This investment has resulted in an increase in debt from $368.0 million to $479.7 million.”

The council report says this has been accompanied by a fall in container volumes due to “reduced terminal capacity during the automation works and the loss of a major contract”. While there has also been a drop in the number of cars being processed by the port due to lower car sales and the impact of new biosecurity measures.

It says such factors are likely to have an adverse impact on the Ports of Auckland’s net profit after tax for 2018/2019. But it says the capital investment by the Ports of Auckland will lead to added capacity and the outlook is projected to improve in 2021/22.

Ball says the report is an accurate reflection of where things are at for the Ports of Auckland.

The company unveiled its new Waikato Freight Hub last month. Ball says he can’t divulge the exact cost of the project for commercial reasons.

But he says the project has so far included the purchase of the 33 hectare site in 2016 and the completion of the first customer facility which has now been completed, as well as a new bridge for road access which is expected to be completed this year. He says there are also plans to construct rail sidings and additional customer facilities as required.

When asked about the port’s future in Auckland he refers to the company’s 30 year Master Plan was produced in 2017 and approved by Auckland Council in May last year.

“We’re basing everything we do on that master plan until we’re told otherwise. The plan is designed to fit with the idea of the port eventually moving, but it is also intended to allow us to keep the freight moving until then.”

The latest news on the Ports of Auckland’s capital investments follows a lot of political debate over its future in the City of Sails.

Auckland Mayoral candidate John Tamihere has called for the Ports of Auckland’s business operations to be privatised to help ease the financial burden faced by the city’s ratepayers.

Under his proposal released last month the Super City would still retain ownership of the land the port sits on and the new port owners would have to lease the land back from the council at a “credible commercial rate for up to 25 years”. They would also be expected to develop an agreed exit strategy.

While NZ First MP and Minister for Infrastructure Minister Shane Jones is continuing in his quest to see the Ports of Auckland’s operation’s north to Whangarei. He says connecting Northport to rail and enabling it to service Auckland-bound freight would make a major contribution to the region’s economic development.

Last month Jones released a new report by consultants AECOM New Zealand and Deloitte on the feasibility of upgrading Northland’s rail network to allow it to happen. The business case was produced for the Ministry of Transport and paid for by the Provincial Growth Fund (PGF) and says upgrading the Northland rail network and building a new rail spur from the main line to Northport would cost $1.3 billion.

Why is Government dragging its wheels on electric cars?

Credits: Newshub Nation.

On the campaign trail, Jacinda Ardern claimed climate change was her generation’s “nuclear-free moment”.

But nearly two years on, her Government has yet to take one of the most obvious steps to cut New Zealand’s emissions.

“Electric vehicles [EVs] can reduce New Zealand’s emissions profile more than nearly anything else,” says Mark Gilbert, chair of lobby group Drive Electric.

“There have been promises made, dates quoted and not met. This is meant to be the delivery year and still nothing.”

The Productivity Commission has said 80 percent of car imports will need to be electric by 2030, and nearly all New Zealand’s fleet by 2050, if we’re to meet our climate targets.

In 2018 just 1.7 percent of imports were electric, and they currently make up just 0.3 percent of our fleet.

Associate Transport Minister Julie Anne Genter and Climate Change Minister James Shaw, both from the Green Party, are responsible for developing the Government’s EV strategy. Both spent 2018 promising an EV strategy would be released by September of that year, but now they won’t even say if it will be released in 2019.

When asked by Newshub Nation whether the deadline could be met in months, or even next year, Shaw replied: “I couldn’t tell you.”

So, why the hold-up?

“There are things we could do pretty quickly, but they could have a negative effect on low-income households,” says Shaw.

What Shaw is referring to is a feebate scheme where a levy on petrol and diesel vehicles is used to subsidise electric vehicles.

“You can imagine, for example, a poor Mangere family without great public transport options, quite a long way out of town, really does rely on their petrol vehicle and doesn’t have the money to go electric because the up-front purchase cost is so high,” he says.

“They’re in a position where they’re going to be buying a cheap second-hand car and at the moment their only option is a combustion engine vehicle.

“So we’re mindful that any transition has to be of equal or greater benefit for people who are in those circumstances, as well as urban middle-class families with choices.”

Other countries like Norway use tax incentives to encourage EV uptake. Drive Electric has suggested that adjusting the Fringe Benefit Tax or GST could boost the number of EVs in company fleets.

“Companies roll their fleets every two to three years so these vehicles will quickly end up in the second-hand market, which will make them more accessible,” says Gilbert.

However, the 2019 budget put no money toward encouraging electric car uptake, and with the Productivity Commission’s first target 10 years away, it raises the question of whether New Zealand is in line to miss its targets.

“I think it is achievable,” says Shaw, “but in a non-linear way.”

“The uptake of electric vehicles has actually been exponential and that will steepen over time.”

Some businesses are ploughing ahead regardless: Meridian Energy has already transitioned half of its fleet to electric and will hit 75 percent by July.

“We want to have a fully electrified fleet across all of our sites and assets at the latest by 2030, I think we’ll easily get there by 2025,” says Nick Robilliard, Meridian’s fleet manager.

“The best thing the Government can do is continue working on different incentives.

“Certainly a feebate system and scheme, introduced in a modest way and progressively managed over time I think is a sensible, fiscally responsible sort of way that they could do it.”

Auckland EV owner Russell Baillie is the proud owner of a Nissan Leaf.

“It’s the best car I’ve ever owned,” he says.

The Baillie family has gone all-out to improve its environmental footprint. Their house is incredibly energy-efficient, designed to capture heat during the day and retain it at night, with no heating required during the winter.

It is also powered by solar panels and has its own battery storage and even a green roof.

But it’s the electric car making the biggest difference to the Baillies’ emissions profile, and with the Government dragging its wheels, more people like them are going to have to lead the way.

Newshub Nation.

NZTA ends period with no permanent leadership as Sir Brian Roche appointed board chair

NZTA's new board chair Sir Brian Roche previously headed up NZ Post.
KEVIN STENT/STUFFNZTA’s new board chair Sir Brian Roche previously headed up NZ Post.

The Government has appointed Sir Brian Roche as the new chairman of the troubled New Zealand Transport Agency (NZTA), ending a period in which the agency had no permanent leadership.

The NZTA has gone through an extremely rough patch after it was revealed in 2018 the agency had been failing to properly check up on the companies who certify vehicle safety and give out licenses.

Law firm Meredith Connell were brought in to help complete a backlog of 850 open compliance files. A separate inquiry into the failure to properly regulate is expected to report back soon.

The appointment ends a period in which NZTA had no permanent board chair or chief executive.

NZTA chief executive Fergus Gammie resigned in December of 2018 and has not yet been permanently replaced.

In April, NZTA chair Michael Stiassny announced his resignation following the completion of the compliance review, saying his work shaking up the agency was complete.

Roche will serve for a three year term from June 2019. He previously served as board chair of NZTA in 2010.

As a condition of the job Roche resigned from a post at Wellington Gateway Partnership, a grouping of contractors who have significant business with NZTA. 

He will remain on the board of City Rail Link Limited in Auckland, but told Stuff he would manage any conflict-of-interest issues with that project if they arose. At this stage none were foreseen.

Roche told Stuff NZTA had gone through a significant period of instability and he would be looking to right that as soon as possible.

“I think it is critical that any agency have stable leadership. NZTA is an incredibly important government agency, it has a significant influence on how the how country operates,” Roche said.

“One of the tasks ahead of me is to get that stability at a governance level and management level.”

He hoped to have a new chief executive in place within the next three months and to halt what was currently a high level of staff turnover.

Transport Minister Phil Twyford said Roche brought the track record needed to the job.

“He brings a wealth of experience and a steady hand to transport sector governance, having previously chaired the Transport Agency and the Auckland Regional Transport Agency and is currently the chair of City Rail Link Limited,” Twyford said.

“The Transport Agency has a crucial role to play in creating a modern and sustainable transport network and I’m pleased to appoint someone of Sir Brian’s calibre to lead this work.

“There is currently a review of the Transport Agency’s regulatory functions underway, which the Government expects to receive shortly. A key focus for Sir Brian will be implementing the direction signalled from that review, and I am confident in Sir Brian’s ability to make that happen.”

“I’d like to thank interim chair Nick Rogers and acknowledge the work of the previous chair Michael Stiassny who uncovered and led the fixing of the Agency’s regulatory issues.”

Roche has a long track record in the public and private sector with roles at PWC, Housing NZ, NZ Post, several iwi, and the department of prime minister and cabinet. 

National’s transport spokesman said he thought Roche would do a “good job” and after a period of “chaos” it was important NZTA had strong leadership.

“The critical thing is getting NZTA working effectively. Because it is a big part of the fact that they have been making extremely slow progress on major transport projects in the last 18 months,” Goldsmith said.

He hoped that an NZTA chief executive would be appointed “smartly” and that the agency stop the “revolving-door” of leadership.

KiwiRail eyes Dannevirke freight hub

KiwiRail says a new rail hub proposed south-west of Dannevirke may be able to take 200,000 tonnes of logs off the roads.

Officials have been allocated $400,000 to evaluate the potential for the hub to take trucks off local roads and better integrate freight flows through Hawke’s Bay.

If approved, the state-owned rail operator will receive $4 million from the Provincial Growth Fund to develop the hub at Tapuata.

KiwiRail is developing a forestry hub at Wairoa as part of the reopening of freight services to Napier. It has a three-year project underway to develop a new freight hub near Palmerston North and last month increased capacity on its rail service to CentrePort in Wellington from the Waingawa log hub south of Masterton.

Deputy chief executive Todd Moyle said the company had been considering a hub near Dannevirke for some time and the staged approach is sensible. It will now work with the New Zealand Transport Agency and other agencies on the project.

Ernslaw One’s Titoki forest lies about 37 kilometres to the east between Te Uri and Weber and is already sending more than 50,000 tonnes of logs to Napier Port annually.

“With harvests expected to hit 200,000 tonnes in the coming years it makes sense to get as much of that volume on rail as possible,” Moyle said.

“Not only does rail have 66 percent fewer emissions per tonne than road transport, it would also reduce the number of logging trucks on the roads, improving road safety and saving in road maintenance costs which burden the local councils and NZTA.”

Log exports are booming, with many ports working to increase capacity to handle trees planted in the 1990s. Logs and timber are the country’s third-largest export and brought in $5.5 billion in the 12 months through April, 13 percent more than a year earlier.

KiwiRail is also investing heavily to capture more of that harvest for its own business. It is converting about 100 container wagons annually to carry logs and is expecting to receive an additional 200 new log wagons by the end of the year.

The rail funding was part of more than $40 million in funding announced today by Fletcher Tabuteau, under-secretary for regional economic development.

Just over half the PGF funding was allocated for upgrades of roads and bridges from Waipukurau to Porangahau to improve resilience and improve delivery of logs and farm produce to Napier.

A further $14.7 million has been allocated to Hawke’s Bay Regional Council to investigate development of storage in the Tukituki catchment to capture winter flows and replenish aquifers in Central Hawke’s Bay.

Mike Lee – City Rail Link billion dollar blow-out: Twyford & Goff asleep at the switch

I don’t often include any personal comment with our news items, and to be honest I haven’t always been a fan of Mike Lee, but as an Auckland resident since the mid ’90’s, and a fan of rail for public transport, I thought the guest blog comment below was worth including. The stupid fixation by the two Phils on trams to the airport instead of the logical extension of our heavy rail network really is beyond belief. Phil Twyford is showing as much nous with the transport portfolio as he is with housing. Time to hand it to someone who actually understands how things work, and with some vision.

That’s my rant for today. Mike Lee’s guest blog post follows.

Dave Anderson

Who us?

The announcement of a billion dollar cost blow-out for the City Rail Link (CRL), 3 years after start of construction, is deeply troubling. At $3.4b, that is $1b per km, the CRL was already going to be one of the most expensive rail tunnels in the world. Now the price has shot up to $4.4b ($2.2b from ratepayers) with completion pushed back to 2024. Troubling also, given Auckland Council’s level of debt which is approaching $8.5b, close to the borrowing limits recommended by the international credit agencies.

Furthermore $4.4b is an estimate – there is no guarantee that the price will not go even higher. One insider suggested to me the final cost could, as he put it “have 5 or 6” in front of it. He was talking billions of dollars course.

Council bureaucrats have responded to the increase by recommending the sale of city car parking buildings (parking earned Auckland Transport $50m last year).  As most Aucklanders know, selling income-earning assets to plug a hole in the budget is a foolish strategy. Apart from the likelihood of monopoly control of city parking, it should also be borne in mind that the CRL won’t be cheap to operate.  If Auckland Council sells its income earning assets, as it did last year with the ARC Diversified Investment Asset portfolio, which earned ratepayers on average $23m per annum, where will the extra money come from to pay the operating costs?

In 2016 the Key National Government after agreeing to back the City Rail Link had its assessors review the project. They recommended that the CRL build should be taken off Auckland Transport and that the two parties funding the project, that is the NZ Government and Auckland Council, should directly oversee it.  A sensible idea in principle. A Crown entity was duly set up, CRL Ltd, under the chairmanship of Wellington-based Brian Roche (now Sir Brian), former PwC partner and most recently CEO of NZ Post, along with a board of largely anonymous directors.

On the face of it, this should have enabled transparency and clear accountability lines back to the funders.  That was the plan, but with the departure of CRL champion Mayor Len Brown and his replacement by Phil Goff, the CRL went off the political radar.  Newly-elected Goff had his own trophy project to push, light rail to the airport. But then with the election of the Labour-NZ First government, no doubt to Goff’s relief, responsibility for this poorly conceived scheme (three years on and still no business case) was famously adopted by his former colleague, Transport Minister Phil Twyford – who for good measure added another, light rail to Kumeu, which together Twyford boasted would be ‘the biggest transport project in New Zealand’s history’. (Think KiwiBuild on wobbly wheels.)

Any way, call it what you like, ‘eyes off the ball’, ‘asleep at the switch’, the CRL project from that time on has been drawn virtually zero political interest, from those at the top, let alone oversight.

Whatever the talents and experience of Sir Brian and his directors in building rail tunnels, what has been missing here has been the active oversight of the shareholders, the government and the council, meaning the people who represent the public who are paying for it. I have only seen Sir Brian twice at the council since his appointment in 2016 before he appeared again last month to ask for another half a billion dollars from Auckland ratepayers.

Meanwhile the CRL first stage ‘cut and cover’ making its painfully slow way up the first 400 metres of Albert Street a year behind schedule, is still not finished, to the consternation of Albert Street retailers, the Stamford Plaza hotel and commuters in that part of the city.  Despite this, a few weeks ago Minister Twyford announced that the NZ Superannuation Fund as part of his ‘City Centre to Māngere Light Rail’ scheme was investigating a parallel tram tunnel up Queen Street just 150m away. I am not making this up. In Mr Twyford we clearly have a transport minister who really doesn’t understand or care much for rail, given his obstinate refusal to even consider a 7km rail extension to Auckland Airport, and his opposition to the extension of train services on the existing line to Kumeu.

Because of the totally deficient amount of financial information given to councillors, I declined to vote for the extra half billion dollars. Instead I won support for an amendment calling on the government as the lead agency to increase its contribution to the proportion it funds projects in Wellington.

Let me be clear, from my time as chairman of the ARC, I have been a leading proponent of the CRL which I believe to be vital strategic infrastructure for Auckland. However its construction should not be seen as an opportunity for the ratepayers and taxpayers to be ripped off by the usual suspects.  Well behind schedule, and well over budget the City Rail Link project is symptomatic of what is wrong with Auckland – poor leadership at the top. Auckland deserves better than this.

Minister signals further KiwiRail spend

The government is planning more investment in KiwiRail beyond the $1 billion allocated in this year’s budget.

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The government is reviewing how much further investment in the rail network might be needed. Photo: Wikicommons

Finance Minister Grant Robertson said the two-year funding was enough to make up for historic under-investment in rail infrastructure but to be transformational, the state-owned enterprise KiwiRail would need more money.

“More needs to be done if rail is to play its part as a truly important mode in a multi-modal system,” he said at a business meeting in Auckland.

Finance Minister Grant Robertson.

Grant Robertson Photo: RNZ / Dom Thomas

Mr Robertson would not be drawn on how much more money the government was willing to give KiwiRail.

“That will come through in future budgets. You will just have to wait.”

He said the government was reviewing how much further investment in the rail network might be needed.

“That report will be released very soon. What it indicates is that the under-investment in rail over a very long period will not just be solved in one budget.”

The KiwiRail investment fitted with the wellbeing focus because it would reduce carbon emissions by taking trucks off the roads, as well as connect the regions, Mr Robertson said.

“On all of the counts, I believe that an investment in rail fits with that [wellbeing focus].”

“There will continue to be investment in our roading network, that is vitally important as well, but rail has been a neglected to the point that it has been run down and does not work for New Zealand any longer.”

What’s happening with Auckland’s port?

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Photo: Patrik Stedrak/ 123rf

Everyone seems to have an opinion about its future –  the cars should be moved to Northport; the whole operation should all be moved and replaced with a stadium, apartments and parks; the city wants it to stay; Auckland needs the income.

The port supports 700 workers and another 160,000 jobs are estimated to hang on the port’s operations, including freight forwarding businesses.

A working group is due to report back to the government this month on the future of freight forwarding in the upper North Island. Creating a vehicle importing hub at Northport is one of a dozen options it is looking at. The group will give more detailed costings and recommendations in September.

The NZ Herald’s Auckland specialist Simon Wilson says the port is outgrowing its site and in 20 years will have to start thinking about moving – the move might take 50 years.

In 2017 the Ports came up with its own 30-year-master plan for its future. Chief executive Tony Gibson says it’s what the city wants but critics say they’d prefer parks, public space, or developments that will return more money for the prized waterfront land.

Despite opposition, the Auckland Council backed the plan and the Ports is pressing ahead with plans that include a new carpark.

The Ports’ latest interim report, for the six months to December last year, shows the number of cars through the port fell nearly 17 percent to 124,000 compared with the same period the previous year.

POAL blames declining car sales and the arrival of the brown marmorated stink bug on vehicle ships from Japan. The pest is a major threat to horticulture and steps taken to keep the bug out disrupted vehicle imports.

But Wilson says the transition to electric cars will also make a big difference to the Ports’ operations. One of the explanations for the current dip in imports is because people are waiting till the next wave of technology makes electric cars cheaper.

Wilson says we don’t know what will happen with the future of electric cars – we may even be able to manufacture them ourselves with 3D printing.

Sending cars to Northport just outside of Whangarei city is a pet project for New Zealand First.

It got a bit of a nudge last week when Kiwirail was urged by the government to apply for funds to fix Northland’s ageing railway lines. Winston Peters, when questioned about the damage to State Highway One that would be done by dozens more trucks every day hauling cars south, said upgraded rail lines would solve that problem.

Wilson says moving the cars to Northport will not only boost the region but free up prized waterfront land.

He’d like to see a stadium or museum there – and says the return from a retail and residential development would bring in far more than the annual $50 million dividend the port pays its owner, Auckland Council, every year.

Budget 2019 Transport portfolio: KiwiRail the big ticket item

The coalition government is aiming to rehabilitate KiwiRail with a $1 billion investment over the next two years.

KiwiRail DXC 5520 Diesel Locomotive passenger train waiting at station in Kaikoura, New Zealand.

Photo: 123RF

The government said that following privatisation, KiwiRail went into a ‘managed decline’ and Budget 2019 aims to rebuild it.

This includes $375m for new wagons and locomotives, $331m to invest in track and other supporting infrastructure, and $35m to begin the process of replacing the current Interislander ferries that are nearing the end of their lives.

The package also includes $300m from the Provincial Growth Fund allocated for investment in regional rail initiatives.

Deputy Prime Minister and Minister for State Owned Enterprises Winston Peters said rail services were a critical and valued part of New Zealand’s transport network.

“This funding will enable KiwiRail to become resilient and reliable through substantial investment in rail infrastructure, purchasing new locomotives and wagons, and beginning the process to replace the Interislander ferries.

“After 155 years of rail in New Zealand, the historic misstep of privatisation and the managed decline of the past decade, securing these assets for the future is especially gratifying,” he said.

Transport Minister Phil Twyford said it was the first step towards rebranding rail as “the backbone of a sustainable 21st-century transport network.”

“Rail makes a vital contribution to urban public transport. Moving more freight by rail is economically efficient, and reduces carbon emissions as well as deaths and serious injuries on our roads,” Mr Twyford said.

“Previous governments have taken a hands-off approach and left rail in a state of managed decline,” he said.

The Budget also provides $405.5m toward the Auckland City Rail Link.