NZ Rail Industry: Deferred Maintenance Catch-Up A KiwiRail priority
March 10th, 2010
The National Infrastructure Plan reiterates the Govt wants KiwiRail weaned off its $90m-a-year operating subsidy “over time” but says there are unanswered questions related to rail’s potential higher value under the Emissions Trading Scheme, smarter demand management and more targeted road pricing. What the Plan does do is note consideration must be given to “preserving the option value of key rail corridors” by catching up on deferred maintenance, a signal decades of neglect could be addressed, where lines make economic sense.
KiwiRail’s total freight load was down marginally in its first half, even taking into account strikes which disrupted coal haulage across the South Island. The railway’s performance is a work in progress, with net profit in the half year at $125.6m, two thirds below the target in its statement of corporate intent. Full-year EBITDA of $59.6m is still the railway’s target.
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The infrastructure plan shows a preference for allowing organic development of the national rail network. Lines which thrive and those which decline will be determined “to a large extent by the decisions of our major exporters and by the configuration of our ports.” KiwiRail’s natural advantage in the transport of bulk commodities and in servicing ports has been recognised and the Plan acknowledges rail will continue to play an important role in transport infrastructure.
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