KiwiRail

History

KiwiRail was created from a number of entities that date back to the 19th century. Prior to KiwiRail, rail transport in New Zealand has been under both public and private ownership. Government operators included the Public Works Department (1873–1880), New Zealand Railways Department (1880–1982), and the New Zealand Railways Corporation (1982–1990). New Zealand Rail Limited was split off from the Railways Corporation (which continued to own the land beneath the rail network) in 1990, privatised in 1993 and then renamed in 1995 to Tranz Rail. In 2004 Tranz Rail's rail, ferry and trucking operations were taken over by Toll Holdings and renamed Toll NZ, with the central government buying back the rail network under the New Zealand Railways Corporation (trading as ONTRACK). After several years of negotiations the two parties could not come to an agreement on the amount that Toll should pay for access to the rail network (track access fees). In July 2008, the government announced the purchase of Toll Rail from Toll, renaming it KiwiRail. The Railways Corporation then owned both KiwiRail and ONTRACK, but both companies were merged in October 2008 to create one company that controls both rail and ferry operations and rail infrastructure. Toll retained ownership of its trucking operation.

Turn-around plan

For 13 years during private ownership, infrastructure investment outside of Wellington dropped to an average of just over $25m a year. Since then it has ranged between $100 and $200m a year.

In the 2010 New Zealand budget KiwiRail received a capital injection of $250 million, and a further $500 million in principle to make it sustainable within a decade. Prime Minister John Key and Minister of Transport Steven Joyce said the injection was part of a $4.6 billion turnaround plan for KiwiRail "designed to see the rail freight become sustainable within a decade by getting it to a point where its costs are funded solely from customer revenue." The $4.6 billion would come from business itself.

KiwiRail describes its turnaround plan as reflecting "the need to create a viable and efficient rail industry capable of meeting its share of freight traffic projected to grow by at least 75 percent by 2031."

The plan aims to increase rail traffic volumes and revenue, increase productivity, modernise assets and separate out the commercial elements of the business from the non-commercial.

The plan includes five major points:

Two of KiwiRail's major customers, Mainfreight and Fonterra, have invested heavily in rail-related infrastructure. Mainfreight has allocated $60 million for investment in new railhead depots, while Fonterra has invested $130 million in a new rail hub complex in Hamilton and another in Mosgiel.

In 2013, company Chairman John Spencer stated that over the last three years of the plan, rail freight revenue has increased by over 25%.

Canterbury earthquakes 2010 and 2011

KiwiRail's South Island operations were disrupted by the 2010 Canterbury earthquake, but KiwiRail also participated in disaster relief efforts. Their operations were once again disrupted by the 2011 Canterbury earthquake, resulting in the cancellation of the TranzAlpine and Coastal Pacific passenger trains until 1 March that year.

De-merger

On 31 October 2011, KiwiRail proposed splitting its land and rail corridor assets from its rail operation assets. On 27 June 2012 it was announced by the company that the value of the land and rail operations will be written down from NZ$7.8 billion to $1.3 billion, and KiwiRail will continue as the rail and ferry operator, while the New Zealand Railways Corporation will manage KiwiRail's land. The de-merger took effect on 31 December 2012.

Asset sales

On 19 April 2012 KiwiRail announced it was putting its Hillside Engineering division on the market. In November 2012, KiwiRail announced it would sell off part of the division. Ninety workers will be made redundant when the sale is complete, sometime in early 2013.

In July 2012 it was revealed that KiwiRail was considering selling its Tranz Scenic division, its remaining long-distance passenger services.

KiwiRail Infrastructure and Engineering

KiwiRail operates services on 3,898 kilometres (2,422 mi) of track, of which around 500 kilometres (310 mi) is electrified. KiwiRail Infrastructure and Engineering maintains and upgrades the network. The division was formerly known as ONTRACK, a trading name introduced in 2004 after the government repurchased all of New Zealand's rail infrastructure from Toll NZ. Rick van Barneveld, former head of Transit New Zealand, is its general manager.

KiwiRail Infrastructure and Engineering has three main areas of operation:

The network consists of:

Yards and facilities

Some of the more prominent rail facilities used by KiwiRail include:

KiwiRail Freight

KiwiRail Freight is the company's largest business unit. Freight makes up the majority of KiwiRail's revenue, at $457 million in financial year ended July 2012. KiwiRail moved 4.58 million net tonne kilometers of freight in the same year.

KiwiRail hauls many different commodities, most notably coal and milk, as well as intermodal freight.

One of KiwiRail's major operations is on the Midland line, where unit trains of up to 30 wagons transport coal from the West Coast to Lyttelton.

Interislander

The Interislander is the company's second largest business unit. It operates ferry services across the Cook Strait between Wellington in the North Island and Picton in the South Island. In financial year 2012, $123.9M of KiwiRail's revenue came from the Interislander, with the majority of the Interislander's revenue coming from rail and road freight transport.

Current fleet

The Interislander operates three ferries. In 2011, the Aratere was extended by 30 m to add extra capacity.

Passenger

KiwiRail Scenic Journeys is the long-distance passenger transport subsidiary of KiwiRail, operating the Capital Connection, Northern Explorer, TranzAlpine and Coastal Pacific.

Suburban rail passenger operations in Auckland and Wellington are contracted by their respective local governments and not operated by KiwiRail. In Auckland rolling stock is owned by Auckland Transport which has contracted operation to Transdev Auckland, while in Wellington rolling stock is owned by Greater Wellington Regional Council which has contracted operation to Transdev Wellington. Until 2016, KiwiRail division Tranz Metro had the contract to operate the Wellington services, but lost a bid to renew this contract in 2015. KiwiRail however is sub-contracted by Transdev Wellington to provide and operate the diesel locomotives required to haul the Wairarapa Connection service.

Current rolling stock

KiwiRail operates a variety of different locomotives, including those for shunting and specific trains used for coal and other transport modes. The table below lists only the current locomotives used by KiwiRail.

Engineering

KiwiRail operates the Hutt Workshops in the Hutt Valley of Wellington. Until 2012 KiwiRail also operated Hillside Engineering in Dunedin, but sold the business to an Australian firm that year.