Who Should Own Auckland Trains?


Auckland Transport has triggered an important debate by wanting to take ownership of the new Auckland electric trains, rather than lease them back from KiwiRail at a cost of several million dollars.

The Rail and Maritime Transport Union believes there could be some merit in the proposal to transfer ownership oto Auckland Transport.

KiwiRail is in the final stage of a tender process for the $500 million job to build 38 three-car electric multiple units and 13 locomotives for the Auckland rail network.

The Government is loaning KiwiRail $500 million to buy the trains, and KiwiRail then leases them to Auckland at a cost to AT of $45.6 million over 3 years plus nearly $30m in track charges.

Wellington’s regional council, Greater Wellington, will own its new Matangi trains even though the Government is contributing 90 per cent of their $235 million cost. So why not Auckland?

AT”s Communications Manager,Sharon Hunter confirmed to AKT that Auckland Transport understands such regional ownership is in fact the preference of Transport Minister Steven Joyce and Auckland Transport goes along with the idea.

RMTU General Secretary Wayne Butson said that this idea should be seriously considered.

“Our experience of past National governments is that their commitment to public ownership of rail assets is not good,” Wayne Butson said.

“Transferring the ownership of Auckland’s new electric trains to Auckland Transport may protect taxpayer assets in the event of KiwiRail being targeted for privatisation in the future.”

“If this is a way of protecting this significant new investment in electric trains, then it may be worthy of consideration.”

“Either way, we do not want to see a situation where KiwiRail is privatised under a National government, and these assets are lost for good.”

GOING ELECTRIC: Soon we will just need the trains

The RMTU would also be watching very closely to see whether KiwiRail honoured the local involvement pledge it made during the tender process for the new Auckland trains, Wayne Butson said.

“We have always wanted these trains to be built in Dunedin and Lower Hutt but local involvement provisions from the lead supplier was the next best option. It is essential that this option is rigorously pursued by KiwiRail,” he said




  1. Matt L says:

    I think Auckland should own the trains, for one leasing them only helps to add to the confusion on rail operations i.e. AT leasing them from Kiwirail but being run by Veolia etc.

    It is also odd that the government wants Auckland trains owned by them while Wellingtons trains are owned by the council. I think it might be a bit of a case of government officials looking after themselves while trying to screw Auckland (knowing that long term leasing will net the government more money)

    The only thing I am really concerned about is the government might use this as a chance to try and charge commercial interest rates on the loan (or at least a rate that will make them a profit from the deal)

  2. signalhead says:

    We have Kiwirail trains running on Kiwirail Network tracks going through Auckland Transport Stations, Veolia running commuter services (many driven by Kiwirail drivers) and Kiwirail running freight services.
    Now to me there must be a few people clipping the ticket along the way, this leads to finger pointing, communication breakdowns and is hugely ineffecient.
    This is typical modern management at it’s finest, palm off all decision making to a contractor so when it goes great management can say “I told him to do that”, when it goes to poo it’s a case of blame the contractor.
    Have Kiwirail run and own all the trains plus infrastructure but have strict performance standards to be met under contract to Auckland Transport.

  3. signalhead says:

    Matt L, any money to be made would go to Kiwirail not a National or Labour government.
    For a company owned by all New Zealanders that is in the red by 250m a year any extra revenue would be a good thing wouldn’t it?
    Generally I thought it was good practice for organisations to stick to their core business, Kiwirail-Trains, for Auckland Council, well council stuff.

  4. Patrick R says:

    It’s hard to work out what the agenda is here, why the different set-up to WGTN? Too many layers in running the trains clearly but how best to sort this out. Is Joyce paying [ie the govt.] as he said he would when he squashed our own little tax or is he fudging now?

  5. Matt L says:

    Signalhead - It would depend on who is paying the loan and the rates set i.e. if Kiwirail own the trains and are only paying wholesale rates (or something similar) but charging AT at market rates then they would benefit but if AT take over the loan completely which was one suggestion in the herald today, then it would be the government that made money off it if interest rates were charged above wholesale rates.

    And no it wouldn’t be a good thing for Kiwirail to profit off it. It would amount to Auckland ratepayers subsidising a freight business. Auckland is about to start paying vastly increased track access charges to cover the costs of running the metro network so providing Kiwirails costs are recovered then they shouldn’t be able to further profiteer off it. If they need to be subsidised by ratepayers to keep their freight business going then that is a big concern.

  6. GRAHAM says:

    Some very puzzling inconsistencies between the way Auckland and Wellington rail are treated need clearing up.
    1. Who is paying what track access charges in Wellington?
    2. If the Government is meeting 90% of the cost of the Matangi trains, how come GWRC will be the owner. Is that 90% a gift or a loan?
    3. Have the funding arrangements for infrastructure upgrading (double tracking and electrification) been the same in both cities?

  7. signalhead says:

    Matt L. There may well be little or no profit to be gained through a lease, and there may well not be a nationwide conspiracy to screw Auckland over.
    We already are subsidising Kiwiaril to the tune of 250m a year.
    The Council should be paying for track access considering the dramas involved with running so many extra services and the standard of track, signals and traction they will be getting.
    Auckland Council could always sell 500m of their billions of dollars in assets and avoid this issue.

  8. Simon says:

    I believe the reason why Wellington`s trains are owned by the regional govt is because the Wellington tender was already signed before National came to power so it was too late for them to do anything while Auckland as we know was just starting the tender process so the govt could stick their finger in and make changes to the process as they have indeed done.

  9. Matt L says:

    Simon - That doesn’t explain why the government has just supported the GWRC buying the ganz trains off Kiwirail so that the council owns the whole lot. If they wanted to force the same model they could have easily done so by making funding conditional on Kiwirail (or someone else) owning the rolling stock

  10. ingolfson says:

    “Generally I thought it was good practice for organisations to stick to their core business, Kiwirail-Trains, for Auckland Council, well council stuff.”

    Public transport is a CORE council responsibility, whatever the free-marketeers have been shouting from their pulpits and university lecterns for decades, so Council owning the trains is perfectly proper.

    Also, the issue is not even so much who owns the trains - but the fact that we are being asked to pay the cost of something, and then not own it. Bit like you paying off your mortgage, and then still not owning the house!

  11. signalhead says:

    ingolfson- Many companies who lack the capital to “buy the house outright” are more than happy to lease vehicles, property and plant.
    This whole thing may be a way to minimise the ability of Auckland council to make autonomous decisions without Government backing, another case was the petrol tax or the council buying the rail corridor. As it stands the number of voters in the greater Auckland area make it one big voting body, enough to swing an election perhaps. Worrying to a Government who has a Mayor reading from a different page to it?


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