Infrastructure “Bomb” Looms In Rail For Key’s Team
November 20th, 2008
John Key’s administration is a reluctant owner of the nation’s railway but probably wants to preserve a network which ensures dairy products, coal, logs and other products get to export markets. The new team – Infrastructure Minister Bill English, SOE Minister Simon Power and Transport Minister Steven Joyce – inherit a railway system which has been woefully under-nourished, with an ageing fleet of rolling stock and a network of bridges of which 80% are nearing the end of their useful life. National is perceived to have more of a bias to building up the roading system, though trucking companies have seen little detail of their plans and yearn for engagement.
Needs Assessment. One issue is historical animosity, recalling Labour Party President, Mike Williams, was on the previous OnTrack board. Thankfully, Jim Bolger heads the current board. According to one estimate, since the railway was sold in 1993, some $14bn has been spent on roads and just $2bn on rail, largely on the local Auckland network. This includes $200m the Govt committed when it bought the railway back again this year. The national railway network is clearly under-utilised, but more must be spent getting the system back up to scratch and efforts made to connect the lines to more manufacturers of bulky goods. Most recently, the outgoing Labour Govt commissioned an assessment $1bn needs spending over five years on rail. The previous Govt agreed to spend $120m, pending OnTrack’s identification of specific projects.
Network Future Uncertain. This leaves a question-mark hanging over even the first year’s funding should National deem the money better spent on roading. National may even want to scale back the rail network to the profitable routes – coal over the Southern Alps, Auckland-to-Tauranga, the South Island Main Trunk Line and the milk route between Hawke’s Bay and Taranaki. The risk is a scaled-back rail network will be poorly placed to serve NZ when the economy picks up steam in future. Either way, the current network needs funds or the nation will struggle to avoid the approaching infrastructure “bomb.”
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