Subscribe to RSSKiwiRail Warns Has To Be Profitable
As predicted, KiwiRail made its statement today on the Northland line warinng that while no final decision has been made, it is hard to see how it can be a commercial proposition to keep it open.
CEO Jim Quinn says: “As we have reviewed the business it has become clear that the lines north of Auckland are very unprofitable and require significant capital to maintain them at their current level – let alone improve transit times.
“KiwiRail needs to operate in a commercial manner. This does not give us the luxury of maintaining lines that carry limited traffic and cost us a significant amount of money to maintain.”
He says the North Auckland Line is the most complex of the minor lines because it is a group rather than a single line. The segments Auckland to Whangarei, Dargaville branch line, the line north of Whangarei and the possible line to North Port all need to be understood separately.”
As he indicated earlier in the week when speculation grew, he said that KiwiRail will begin consultation with Northland communities early in 2011 over the future of the railway lines north of Auckland.
“The way we review the future of lines in Northland will not differ significantly from the approach we have taken with other minor lines such as Stratford-Okahukura and Napier-Gisborne,” he said.
“This has involved meeting key stakeholders, explaining what is needed to make the line profitable, canvassing support among existing and potential customers and giving the community itself a role in finding an anchor customer or customers to underpin the future of the line.”
Mr Quinn says a “minor line” is one that carries low levels of traffic that in many instances travels at low speed due to its physical condition.
“KiwiRail is ensuring it has information it can share easily with each group of stakeholders. We intend to engage fully early in 2011 so that there can be good engagement through the year if required.”
Mr Quinn says a review does not mean automatic closure or mothballing of lines.
“It is a process by which KiwiRail can identify lines’ current and future business, long term trends or developments that might influence future traffic and non-financial benefits that lines provide to communities.
“As part of any review of a line, we have committed to following a process of engaging with the community and establishing all the facts, opinions and possibilities for expanding re
“If a commercial view is that a line should close or be mothballed, we discuss with Government and the community options to bridge the gap between a commercial approach and keeping the line open.”
Reviews have advanced to community consultation level in the case of the Stratford-Ohakura (SOL) and Napier Gisborne lines. The SOL was moth-balled for two years in June of this year following a consultation process that extended from November 2009 to April 2010.
Consultation on the future of the Napier-Gisborne Line is continuing.
10 Comments
So exactly where is the loss (money) going? Is it disappearing into the ether? Has the money been tied up in a large sack and been dumped at sea or something similar? I’m at a loss to know how money simply disappears from circulation.
State Highways Warns Has To Be Profitable!
Pretty simple message if you want to get the keep the rail network to give NZ a long term sustainable freight and passenger system.
Oil is at over $91 a barrel today …and it’s forecast to go high in 2012 onwards.
The trucking lobby has paid off the Nats…so dump the Nats next year.
unfortunately the line north of Whangarei and the Dargaville branchline have little chance of traffic growth in the short term. the only freight on these lines is logs to the chip mill at Portland. All other logs go to Marsden for export and logs alone wont justify this branchline.
However the roads around Northland a dodgy and they wont cope well with the extra 100 trucks or so a day.
How much private siding traffic is there north of Waitakere these days?
I know Fonterra has the factory at Kauri.
How much private siding traffic is there north of Waitakere these days?
I know Fonterra has the factory at Kauri.
Jon, How about asking Jim Quinn how many sales staff he has out and about drumming up business for Northland and Gisborne?
Good question Chris R. New business development is the key here, KiwiRail should be working to build new industries with others - instead, they’re effectively putting their hand out for a second level of handouts despite government giving them a massive capital injection IMHO
I totally agree with Tim! Jim Quinn’s statements are reminiscent of Kiwirail a few years back, threatening to can the Auckland-Wellington passenger trains. It all smacks of blackmailing NZ into giving Kiwirail more capital or the community generating the sales for Kiwirail. Disgraceful.
Any fool can make Kiwirail profitable, by slashing all unprofitable lines and just pushing the small short freight routes that make lots of cash. Which would leave us with 2 small rail networks - Wellington-Palmy-Hawera and maybe PN-Napier, and Auckland-Tauranga. All other tracks ripped up; freight shipped from Wellington-Christchurch, and trucked between Hamilton and Palmy.
Sound daft? It’s what Kiwirail threatened just a few years back…. remember? Makes fiscal sense for rail, but not for NZ (when you count the extra maintenance on roads, and crashes, etc).
Mr Quinn - we all know Kiwirail is cashstrapped, and it’s hard to make rural lines viable, but that’s why you’re paid the big bucks, right? So come up with ideas, or admit you can’t run the company and resign.
Bob, I think you’re confusing KR, which has existed for a shade over two years, with Toll Rail and OnTrack (now KR Network).
In OnTrack’s case, it was actually a sensible suggestion because the rail network was so horribly run down and its contracts weren’t allowing it to get the return to upgrade them. That’s a lot of the reason why Labour bought the whole train set and created KR.
And consider who Quinn’s working for: The Minister of Trucks. He’s trying to turn around decades of private sector buggery with one hand tied behind his back.