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.
The government is planning more investment in KiwiRail beyond the $1 billion allocated in this year’s budget.
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.
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.”
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.
The coalition government is aiming to rehabilitate KiwiRail with a $1 billion investment over the next two years.
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.
Former Toll head Greg Miller’s time as chair of KiwiRail is over – he’s moved across to become the company’s chief executive.
Acting chair Brian Corban says the appointment sends a strong signal as the company prepares for unprecedented growth and change, including replacing Interislander ferry fleet, the need for a major rolling stock replacement programme and new initiatives such as the reopening of the Napier to Wairoa line and an $80 million investment in tourism services.
He says Mr Miller an unrivalled set of global experience in supply chain, a history with rail, domestic transport expertise, and who has led companies through significant growth and transformation.
Mr Miller says the organisation is at a pivotal point with the support of the Government and the ability to make a once-in-a-generation difference to New Zealanders through easing congestion in cities, taking trucks off vulnerable roads, reducing carbon emissions and driving investments in regional economies.
Fears that dangerous goods could cause fires on inter island ferries have prompted the Shipping Federation to lobby for stricter policing of transport operators.
Federation chief executive Annabel Young said ferry companies were concerned about trucks carrying undeclared or incorrectly labelled dangerous goods.
Some truckies were caught attempting to take undisclosed dangerous goods on regular sailings, instead of catching early morning freight runs which carry fewer passengers, but allow cargo deemed higher risk.
Young said ferry operators came across problems with dangerous goods by chance and were worried about what else they were missing through lack of pre-boarding inspections.
“We’ve complained about it for years, finally it was getting to the point where we’re thinking that this is really serious and we’re sick of being brushed off, so we’ve escalated it.”
Following recent meetings with the NZ Transport Agency, Maritime New Zealand, WorkSafe and the Environmental Protection Agency, Young said KiwiRail, which runs InterIslander services, and Bluebridge Cook Strait Ferries agreed to report any dangerous goods issues to the agencies.
She was aware of at least half a dozen reports over the past month – “enough incidents to be severely troubled” – and it appeared some dispatchers were not properly trained in dangerous goods documentation.
“The ship’s master has the right to rely on the shipping documents provided by the trucking company.
“Some things have to be on the top deck because they cannot be in an enclosed space, some things can’t be put next to each other.
“A simple example is a trailer load of hay which can spontaneously combust, so you don’t want to put that next to volatile gases.”
Local ferry operators were also mindful of the number of fires on roll-on roll-off ferry vehicle decks overseas, said Young.
In a recent article on its website, international transport industry insurer TT CLub said it was estimated that a major container ship fire at sea occurred on average every 60 days, and there had already been four major cargo-related fires this year.
TT Club said its records indicated that 66 per cent of incidents related to cargo damage could be attributed to poor practice in the overall packing process, including cargo identification, declaration, and documentation.
Interislander general manager operations Mark Thompson said KiwiRail staff checked paperwork before loading to ensure it matched what was declared when the booking was made.
“If discrepancies are found by our terminal staff or ship crew, we will not carry the freight until it is corrected and we’re satisfied that it complies. This means that on occasion, we do reject cargo from sailings.”
KiwiRail decided about a year ago that it would no longer carry class one explosives on rail or its ships – with the exception of small ammunition – because restrictions around transport of these items made it costly and disruptive, and the amount being carried was steadily declining, said Thompson.
He was unaware of any serious incident in recent history resulting from carriage of dangerous goods on InterIslander vessels, but said he would support any move to improve enforcement of the regulations.
Police acting national manager road policing inspector Peter McKennie said that as a result of concerns raised, police were paying additional attention to the transporting of dangerous goods which posed potential safety risks on the ferries and on the road network in general.
“Police have always carried out random safety checks on commercial vehicles, including dangerous goods carriage compliance. This is conducted anywhere on the road network, not just at ferry terminals. We do not have a permanent presence at ferry terminals.”
Following an approach from the Shipping Federation, the Transport Forum reminded its members that drivers needed appropriate dangerous goods endorsements on their licences, and chief executive Nick Leggett said they also had to ensure their paperwork was in order.
“Our message to our members is that [spot checks] are very likely to happen more frequently and that they should comply with the law and do what is right.”
Mainfreight group managing director Don Braid said their Chemcouriers business moved a lot of dangerous goods and he had no concerns about increased inspections before trucks embarked on ferries.
“If it catches out those that are disobeying the laws, then so be it.”
“The Upper North Island Supply Chain Study has focussed solely on rail and this does Northland no favours,” says Annabel Young, Executive Director of the NZ Shipping Federation, talking about the Interim Progress Report of the study group. “Their rail-centric view has blinded them to the opportunities available to Northport that are not dependent on rail.”
A dry dock in Whangarei would be a win-win for both the city and New Zealand as a whole; but in the interim report it gets a scant one-line mention. The lack of a dry dock is hurting this country due to the environmental and financial costs that have to be incurred when our coastal shipping operators are required to dry dock their vessels off-shore in Singapore or Australia. There are already cases where overseas ships are avoiding New Zealand due to the toxic combination of high biosecurity cleanliness requirements for a vessels hull and secondly, the inability to clean a ship in a dock that does not fit in the Devonport dry dock.
We note that the interim study assumes that cargo landed in Northport would need to be moved by rail which ignores the obvious possibility of movement by sea, as is done now in many other parts of the world using smaller domestic coastal ships and barges.
This first report sets up a paradigm where rail is deemed to be the only answer. The Federation believes it may be asking the wrong questions.
The New Zealand Shipping Federation began in 1906 and is the key representative body for New Zealand’s coastal ship operators.
An inland port in west Auckland and a vehicle importing and servicing centre at Northport are among a dozen potential transport investments a working group is considering to improve freight handling in the upper North Island.
The group, formed last year, has spent the past eight months talking with users and imagining how the existing ports at Auckland, Marsden Point and Tauranga – and the road and rail links between them – could be reconfigured to provide the best options for long-term growth.
It plans to report back to the government in June with options and complete more detailed costings and recommendations in September.
“There are a large number of infrastructure options that may have a part or full place to play in changes to the upper North Island supply chain which will be considered,” chair Wayne Brown says in a progress report filed with Cabinet’s Economic Development Committee earlier this month.
“For example, in evaluating one of our options that involves moving some of Ports of Auckland’s freight task to Northport, we will consider potential infrastructure that may be required to support this,” the group says.
They include: “a spur to Northport, which we understand the current government is investigating; upgrades to the existing North Auckland Line; potential short-term operational changes, such as moving freight through Auckland on the commuter network at night; potential long-term new infrastructure requirements such as a new rail line out west of Auckland to avoid congestion in the Auckland public transport rail network and connect through to the current inland freight terminals; and the potential establishment of new inland freight terminals.”
The Upper North Island Supply Chain study was the result of a pre-election pledge by NZ First to move container operation from Ports of Auckland to Northport by 2027.
While there is broad consensus that Auckland’s port will be increasingly constrained by the city’s development around it, there is no agreement as to how soon change is needed, how much freight could be redirected through Tauranga or Northport, and how that would be achieved.
As recently as 2016 a study group recommended work start assessing Manukau Harbour or the Firth of Thames as long-term replacement options for Auckland. Last August, Port of Tauranga chief executive Mark Cairns said there wasn’t yet sufficient freight volume in Northland to warrant the relocation north. Port of Tauranga owns half of Northport.
Auckland and Tauranga are the country’s two largest container ports. With Northport, they handle about half the country’s exports and two-thirds of its import volumes.
Tauranga and Auckland, controlled by Bay of Plenty Regional Council and Auckland Council respectively, compete for freight. They considered a merger in 2006 but talks collapsed the following year. Ports of Auckland has a 20 percent stake in Northland Regional Council-controlled Marsden Maritime Holdings, Tauranga’s partner in Northport.
The working group noted submitters’ views that the “interwoven” nature of the three ports’ ownership had prevented them being developed in New Zealand’s best interests and had resulted in some inefficiencies and “duplication” of resources.
“We will be considering the current ownership structure of ports and whether a change may be needed to ensure interests are aligned to deliver the best outcome for New Zealand,” the group says.
“Councils were somewhat open to a change in port ownership as long as they preserved their income and value of the port to their community.”
Ports are long-term businesses. The working group is canvassing issues in 10-, 25- and 50-year timeframes.
Scope is also important. Freight operators argue Northport, west of the Marsden Point oil refinery, could meet growth on Auckland’s North Shore, rather than replacing Ports of Auckland entirely.
Short-term options could include establishing a distribution centre at Silverdale or Orewa; imports and Northland products could be trucked there overnight – avoiding congestion on SH1 – for day-time delivery into Auckland.
Northport already plays a similar role. Structural components for some major Auckland building projects are stored there for just-in-time delivery to avoid congestion in the CBD.
Car imports have already been identified as a potential early change. Ten hectares of new space at Northport could provide storage for 10,000 cars. Auckland currently receives about 300,000 cars annually, each of which spends close to three days on its wharves.
Northport started operating in 2002 and is largely a blank canvas. Its 49-hectare footprint can be expanded to 75 ha, while its berth length can be more than doubled to 1,390 metres. The port lies next to 180 ha of commercial and industrial land controlled by shareholder Marsden Maritime.
But it has limited capital for development and no rail link. KiwiRail and the Ministry of Transport are investigating a $200 million, 20-kilometre spur line, but that is probably more than six years away even if there was a prompt decision to proceed.
The existing line from Swanson to Fonterra’s Kauri dairy plant north of Whangarei also needs upgrading at a cost of another $500 million to carry larger and heavier container traffic. KiwiRail has previously estimated the total bill – including upgrading rail capacity from South Auckland – at about $2 billion.
The working group noted its “fundamental” belief that there is “no point making further investment in Northport without investment in, and development of, the train line to Auckland.”
Interislander ferry operator KiwiRail is officially on the hunt for two new vessels that will dwarf its existing fleet.
The vessels, expected to be brought into service by 2024, will need to accommodate 40 rail wagons, about 3000 lane metres for vehicles, and room for about 1800 passengers each, according to tender documents.
The two new ships would be able to transport 1100 more passengers a day than the three currently traversing the Cook Strait, which have the capacity for 2500 travellers.
The Aratere can hold 600 passengers, the Kaiarahi has room for 550, and the Kaitaki can carry 1350 passengers.
The project, referred to as the Inter-Island Resilient Connection Project, or iReX, would also see port services upgraded to “align with the design of the new ships”.
KiwiRail said the ships would need to be designed to ensure high levels of reliability and allow for “a one-hour turnaround time during peak periods”.
The company said its target was to select a preferred ship supplier by the end of 2020.
Walter Rushbrooke, general manager of Strategic Projects at KiwiRail, said the ships would be built overseas as New Zealand did not have the capability to build large ferry vessels.
“The new ships also mean changes to the terminals at both ends of Cook Strait and we are already working with the Port Companies in Wellington and Picton on designs and delivery pathways.”
OPINION: The first instalment of the Government’s trio of reports on re-shaping how the Upper North Island ports work, suggests that Peter Jackson’s Lord of the Rings movie trilogy will look like a snapshot compared with what lies ahead.
A 2017 New Zealand First policy to shift the vehicle import trade from Auckland to Northport by this year, as a prelude to re-locating the city’s port, begat – thanks to co-alition politics – the more cautious “Working Group undertaking the review of Upper North Island Supply Chain Strategy”.
Shifting the balance of work between the ports, and building major new transport links would be the country’s biggest-ever infrastructure undertaking – possibly five or more times the current champ, Auckland’s $4.4 billion City Rail Link.
Taken at face value, the picture painted of the current state of the Ports of Auckland, Port of Tauranga, and Northport at Marsden Point, shows a flawed regionally-owned port sector with duplication and competition possibly at the expense of the national interest.
Auckland dominates imports, Tauranga exports, both have 40 per cent of their container traffic empty in one direction, while Northport is a distant minnow, with limited access and 70 per cent owned by the other two.
What began as a plan to free Auckland’s waterfront from an ugly industrial port, to the benefit of Northport, is now as much, if not more, about the transport links between the ports and centres in the upper North Island.
A line highlighted in bold print in the 21-page report, points to the scale of making any change.
“We fundamentally believe that there is no point making further investment in Northport without investment in, and development of, the train line to Auckland.”
Call that billions of dollars, who knows how many, 2 or 5? The report doesn’t say.
Done properly it involves a crosstown section through southern Auckland, a third freight line through the commuter rail-dominated suburbs, electrification and double or triple tracking from West Auckland to Marsden Point with new tunnels along the way and presumably fleets of car-carrying wagons and handling facilities.
Future instalments of the trilogy will explore changing the ownership structure of ports, looking at the low-tax status enjoyed only by Auckland, and getting a clearer picture of future trade patterns.
Who knows what the future of the private motor car will look like in 20 years’ time, when the multi-billion investment needed to relocate the vehicle import trade, is ready to deliver.
The three-part study is an important piece of work, taking a long-term view on making possibly major structural change in transport links in the upper North Island, and its ports.
Part two outlining some options is said to be due as early as June, and part three – recommendations – in September, perhaps unhelpfully a month before the local body politicians who own Auckland’s port, and most of Tauranga’s and Northland’s, face re-election.
The interim report already casts doubt on the idea of building a new super-port either in Auckland’s Manukau Harbour or the Firth of Thames, hinting better use of the three ports may be the answer.
“We consider the issues not insurmountable,” concluded the working group’s interim report optimistically.
What it did not say was, nor are they likely to be simple, anything less than eye-wateringly expensive, and hugely complex.