|Industry||Rail transport, shipping, property management|
|Founded||1 July 2008|
|Sue McCormack (Acting Chair)|
|Products||Great Journeys New Zealand|
Long-distance passenger rail
|NZ$25.7 million (FY2018-19)|
|NZ-$324.9 million (FY2018-19)|
Number of employees
KiwiRail Holdings Limited is a New Zealand state-owned enterprise responsible for rail operations in New Zealand, and operates inter-island ferries. Trading as KiwiRail and headquartered in Wellington, New Zealand, KiwiRail is the largest rail transport operator in New Zealand. KiwiRail has business units of KiwiRail Freight, Great Journeys New Zealand and Interislander. KiwiRail released a 10-Year Turn-around Plan in 2010 and has received significant government investment in support of this in an effort to make KiwiRail a viable long-term transport operator.
Prior to the establishment of 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 acquired by Toll Holdings and renamed Toll NZ, with the central government buying back the rail network outside of Auckland for $1 (the Auckland metro rail network had already been purchased by the government in 2001). The rail network then came under the New Zealand Railways Corporation (trading as ONTRACK). As part of this acquisition, Toll agreed to pay ONTRACK "Track Access Charges" (TACs) in exchange for exclusive network access for 66 years, subject to a "use it or lose it clause": if freight and passenger volumes fell below their 2002-2004 average for three or more years, Toll would lose its exclusive access. The agreement set a base track access fee but left future track access fees open to negotiation between ONTRACK and Toll. After several years of negotiations, the two parties could not come to an agreement on the amount that Toll should pay.
Establishment of KiwiRail
On 1 July 2008, the government announced the purchase for $690 million of Toll Rail, the rail and ferry assets of Toll NZ, but not its trucking operation, which continued under the Toll brand. The new company was named KiwiRail and launched on 1 October 2008 at a ceremony at Wellington railway station. The New Zealand Railways Corporation then owned both KiwiRail and ONTRACK, with both companies merging to create one company that controls both rail and ferry operations and rail infrastructure.
Jim Bolger became the first chair of the KiwiRail board, a position he held until 1 July 2010. A number of commentators, including Winston Peters, view this as ironic. In response, Bolger acknowledged his involvement in privatising New Zealand Rail, remarking that "my life is full of ironies," and added that "the world has changed."
Splitting of land and operations
In 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 would be written down from NZ$7.8 billion to $1.3 billion, and KiwiRail would continue as the rail and ferry operator, while the New Zealand Railways Corporation would manage KiwiRail's land. The de-merger took effect on 31 December 2012.
10-year Turnaround plan
In 2010 KiwiRail released a 10-year turnaround plan and significant government investment in support of this in the years following. In support of the turn-around plan, from July 2008 to December 2016 KiwiRail received over $2.1 billion of Crown investment, which was mostly spent on infrastructure and new rolling stock.
The focus of the Plan is to increase rail traffic volumes, revenue and productivity, modernise assets and separate out the commercial elements of the business from the non-commercial.
The plan included the following points:
- "Step change" on the Auckland – Wellington – Christchurch trunk route:
- Reduce transit time and improve reliability along the route by easing curves, removing speed restrictions, greater investment in renewal of bridges and sleepers and passing loops. An express freight train journey between Auckland and Wellington took thirteen and a half hours. KiwiRail aimed to reduce transit times to 11 hours.
- Improve exit and entry from Auckland and Wellington with improvements at terminals and on main lines to reduce transit times and conflicts with commuter services
- Increase ferry rail-freight capacity by extending the length of the Aratere (achieved 2011) and make the Kaitaki rail-capable (idea since abandoned)
- Improve reliability, capacity and enabling investment:
- Increased renewals on "other key routes", including investment in sleeper replacement, bridge strengthening and track formation refurbishment.
- Improved IT systems and processes, equipment and facilities at terminals
- New locomotives (see DL class) (48 in service by 2017) and 3,000 new wagons (over 1,000 in service by 2017).
- Review of minor lines (close or mothball if no anchor customers emerge):
- Clarify and assign costs associated with Auckland and Wellington metro services (resulting in Tranz Metro assets being transferred to the Greater Wellington Regional Council and contracts for running services being made "contestable", as in Auckland.
Two of KiwiRail's major customers, Mainfreight and Fonterra, invested heavily in rail-related infrastructure in line with the Turnaround Plan. 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.
The plan has had mixed success, with company Chairman John Spencer stating in 2013 that for its first three years, rail freight revenue had increased by over 25%. Similar progress in attaining new customers and increasing freight volumes has been made over the life of the Plan to date (other than with coal).
Steady and at times rapid progress has been made on the enabling parts of the Turnaround Plan, such as new locomotives and wagons, lengthening of the rail ferry and track destressing, but not always effectively.
The 10 Year Turnaround Plan was quickly undermined by a series of adverse events, including:
- Earthquakes: 2010 Canterbury earthquake, 2011 Christchurch earthquake, and the 2016 Kaikoura earthquake, resulting in significant infrastructure damage and closure of the Christchurch to Picton line from November 2016 to 15 September 2017
- Lengthy severing of the rail ferry link between the North and South Islands when the Aratere lost a propeller in 2013
- Significant and lengthy problems with the new DL class locomotives
- Pike River Mine disaster, leading to the mine's closure and the loss of revenue that had been anticipated from coal freight
- International coal price collapse
- Solid Energy, the largest NZ coal mining company, entering voluntary administration in 2015. This was the culmination of a downturn that had begun to appear in 2012–13: significantly less coal being moved from West Coast mines
- Major rebuilding after fire damage and seven week closure of key freight route Midland line in 2017
2017 update of the Turnaround Plan
Partially as a response to the events outlined above, in the 2017 budget the government announced a further $450 million in capital funding for KiwiRail, and that the company's operations would be placed under another major review, believed to relate to future funding models. The $450 million was earmarked for repairs following the 2016 Kaikoura earthquake and for further locomotive and rolling stock purchases. As part of the Turnaround Plan's agenda to standardise locomotives and wagons, in 2016 KiwiRail announced it would effectively switch off the NIMT electrification in late 2017 and replace the electric locomotives with an additional eight DL locomotives (additional to the 15 as reported in the 2016 Annual Report).
On 30 October 2018 that capital funding was made available to by the new Labour-led Coalition government to refurbish 15 of the surviving 20 EF locomotives at the Hutt Workshops extending the service life by 10 years for their continued use, in line with the Governments energy and emissions policies, and while the government is also actively considering extending the North Island electrification for the first time since the 1980s.
KiwiRail has made use of the Government's Provincial Growth Fund (PGF). In 2019 KiwiRail signed an agreement with the New Zealand Transport Agency, Palmerston North City Council to construct a road, rail and air distribution centre in Palmerston North, following a $40 million allocation to KiwiRail from the PGF.
New Zealand Rail Plan
In 2019, the government began a "Future of Rail" review, and in December 2019 released a draft New Zealand Rail Plan, outlining changes it proposed making to the rail transport industry and KiwiRail specifically. The draft plan proposes a number of major changes, the most significant being future funding of the rail network through the National Land Transport Fund. A number of other projects are proposed under the draft plan. They include a new train control centre in Auckland, replacing two Interislander ferries and rolling stock.
On 17 March 2020 KiwiRail released a tender for the supply of new mainline locomotives. 2021 New Zealand budget allocated NZD$722.7 million to purchase new mainline locomotives, shunt locomotives and wagons. In October 2021, Stadler Rail announced it had won the contract to supply 57 new locomotives for KiwiRail. Stadler Rail stated the contract was worth 228 million Euros, or NZD$403 million.
The 2022 budget allocated $661.5 million to KiwiRail; $312.3 million for improving the national rail network and $349.2 million for completing the replacement "ageing" locomotives and freight wagons, including up to 29 new light-duty locomotives. The total government investment increases to $8.6 billion.
KiwiRail business units
KiwiRail Freight is the company's largest business unit, making up the majority of KiwiRail's revenue with $390 million in the financial year ended July 2016. In the same year, KiwiRail moved around 18 million tonnes of freight and carried about 16% of New Zealand's total freight task (tonnes-km).
Freight types: Bulk commodities include coal, logs, milk (dry and wet), IMEX (import/export intermodal) and domestic intermodal freight. Formerly large scale freight types such as petroleum products have entirely been withdrawn, and fertilizer has almost disappeared. The freight trading revenue by sector, as per the December 2016 Half Year Report is:
- Domestic 27%
- Bulk 19%
- Forestry 15%
- Import/Export 39%
Rail freight depots: KiwiRail has a total of 17 rail freight depots. In the North Island, these are Whangārei, Auckland, Hamilton, Tauranga, New Plymouth, Napier, Whanganui, Palmerston North, Masterton and Wellington. In the South Island they are Blenheim, Christchurch, Ashburton, Timaru, Oamaru, Dunedin, and Invercargill.
Inland Ports: KiwiRail serves a number of Inland Port yards, although does not own the tracks. These include Conlinxx (Wiri), Midland Port (Rolleston), Longburn International Freight Hub (Longburn, Palmerston North), Manawatu Inland Port (Palmerston North), MetroPort (Southdown in Auckland and Rolleston in Christchurch) and will include Ruakura (Hamilton) when it opens in 2019, and Ports of Auckland's site at Horotiu in Hamilton.
Sea Ports: KiwiRail has major freight yards and sidings at Lyttelton port Company (containers, logs, coal), Port Chalmers (containers), Southport (Bluff), Timaru, Port of Tauranga (Mt Maunganui and Sulphur Point), Ports of Auckland, Centreport (Wellington), Port of Napier and New Plymouth. KiwiRail also has a joint venture with the Northland Regional Council to build a branch line (the Marsden Point Branch) to connect to Northport at Marsden Point.
Anchor freight customers: Key anchor customers include Fonterra, Westland Dairy Products (Rolleston and Hokitika), Bathurst resources and the various freight forwarders including Mainfreight and port companies including Port of Tauranga.
Freight wagons: KiwiRail operates 4,855 wagons. An additional 120 wagons were acquired in the year ending 2016, with over 1,000 new wagons added since 2008. One of KiwiRail's stated aims is to progressively move towards standardized wagons, with the container flat-top being overwhelmingly the dominant type (carrying curtain sided swap bodies, liquid containers, Log cradles and so on to meet almost all freight tasks). The Norwegian coupling is progressively being replaced with semi-automatic Janney coupler on all wagons.
Key freight routes:
- Auckland – Christchurch: domestic general freight, mostly via 10 ft, 20 ft and 40 ft containers and curtain-siders or box wagons.
- Auckland – Tauranga: Containerized and bulk export products
- Kinleith/Murapara – Mount Maunganui: wood products only
- Midland Line: Bulk export coal from north of Westport and Reefton, coal containers for Fonterra, dry and wet milk between Westland Dairy plants at Hokitika and Rolleston, export dry milk from Fonterra at Darfield.
- Edendale – Taieri – Port Chalmers: export milk powder in containers.
- Wairio – Invercargill: solely coal in containers for Fonterra use.
- Invercargill – Bluff: run as a 'shunt', sole freight is exports to Southport.
Re-branded along with KiwiRail Scenic Journeys as the single brand The Great Journeys of New Zealand in 2017, The Interislander is the company's second largest business unit. It operates ferry services across Cook Strait between Wellington in the North Island and Picton in the South Island. In the 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.
Property and Corporate
KiwiRail is a major land owner in New Zealand, and manages over 18 thousand hectares of land, has in excess of 1,500 property assets with a combined value of over $965 million (Annual Report 2016). Increasingly, KiwiRail is pursuing a commercial approach to asset management, and in the 2016 financial year received over $18 million from property sales.
Great Journeys New Zealand
Re-branded along with Interislander as the single brand The Great Journeys of New Zealand in 2017, it is the long-distance passenger transport subsidiary of KiwiRail, operating the Northern Explorer, TranzAlpine and Coastal Pacific. The passenger trains are predominantly patronised by tourists to NZ, with the exception of the Capital Connection, which is a commuter train.
In 2012, KiwiRail attempted to sell Tranz Scenic, but was unsuccessful, and KiwiRail continues to run these services. The division is now experiencing rapid double-digit annual growth, due to the growth of Chinese tourism to New Zealand, so much so that KiwiRail in 2017 may purchase an additional eight carriages to the 17 AK carriages purchased in 2012.[needs update]
In 2021, following a decline in tourism during the COVID-19 pandemic, KiwiRail announced the suspension of the Coastal Pacific and Northern Explorer as part of Project Restart '22. While it is currently, as of January 2022, unclear what direction KiwiRail intends to take, Project Restart suggests a shift to multi-day land-cruises, a form of Experiential tourism. This decision, or potential decision, has been seen by many New Zealand-based transport advocacy groups as an abandonment of interregional rail by KiwiRail. Campaign for Better Transport described it as the "latest stage in the decline of what was once an extensive passenger rail service which serviced most of New Zealand". An announcement is expected by July 2022.
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 is sub-contracted by Transdev Wellington to provide and operate the diesel locomotives required to haul the Wairarapa Connection service.
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 Auckland One Rail, while in Wellington rolling stock is owned by Greater Wellington Regional Council which has contracted operation to Transdev Wellington.
Infrastructure and Asset Management
The KiwiRail Infrastructure and Engineering division, formerly known as ONTRACK, has three main areas of operation:
- Development, maintenance and operation of all of New Zealand's main-line rail infrastructure (see List of New Zealand railway lines).
- Provides rail operators with access to the rail network in return for the payment of track access charges.
- Rail network controller, providing services such as train control and signalling.
The network it is responsible for consists of:
- Route length: 3,898 kilometres (2,422 mi)
- Tunnels: 149
- Bridges: 1,700
- Electrification: 95 km at 1.5 kV DC (Wellington area), 411 km at 25 kV 50 Hz AC (NIMT central section)
The Engineering division provides mechanical assistance to the Freight and Passenger businesses, as well as to Auckland Transport. Engineering maintains, refurbishes and occasionally builds rolling stock for the network.
Most rail operations are a 'there and back' service with motive power being held in a few key strategic locations. Motive power stabling yards are as follows:
- Westfield (Auckland)
- Frankton (Hamilton)
- Palmerston North
- Thorndon (Wellington)
- Middleton (Christchurch)
Yards and facilities
Some of the more prominent rail facilities used by KiwiRail include:
- Westfield, Auckland (adjacent to the closed Westfield station and near Westfield Junction)
- Southdown, Auckland
- Te Rapa, Fonterra bulk store yard, Hamilton
- Mount Maunganui
- Picton, Marlborough (solely used for marshaling wagons for rail ferry)
- Spring Creek (serves as rail head for Nelson)
- Middleton, Christchurch (largest yard in South Island)
- Taieri, Fonterra bulk store facility, Mosgiel
Current rolling stock fleet
The table below lists only the current locomotives in service with KiwiRail.
|Image||Class||Introduced||Number in class||Number in service||Power output (kW)||Notes|
|DC||1978–1983||85||18||1230||Mainline diesel-electric. Fifty-two scrapped, six preserved, six sold overseas, and three stored. Sixteen classed as DCP.|
|DF||1979–1981||30||29||1800||Mainline diesel-electric. Sub-classes: DFB (21) and DFT (9). Two under overhaul to DFB, and one scrapped.|
|DH||1978-1979||6||6||672||Heavy shunting locomotive.|
|DSC||1959–1967||70||27||315||Light shunting. Thirty-four scrapped, two preserved, three stored and three owned by industrial owners.|
|DSG||1981-1983||24||24||700||Heavy shunting. One under overhaul.|
|DX||1972–1976||49||47||2240||Mainline diesel-electric. One scrapped, one stored, and two under overhaul. Sub-classes: DXB (14), DXC (32), DXR (2).|
|EF||1988–1989||22||14||3000||25 kV AC electric locomotives. Four stored, four scrapped and two under overhaul.|
|DM||2024 (planned)||57||0||3000||Under order from Stadler Rail|
|TR||1936–1978||90||17||138||Light shunting, positioned in smaller yards and leased to industrial customers. Forty-four scrapped, twenty-eight preserved and one stored.|
The majority of passenger carriages in New Zealand are now owned by Auckland Transport, Greater Wellington Regional Council and Dunedin Railways. KiwiRail operates a small fleet of New Zealand built AK class carriages for long-distance passenger trains and heavily rebuilt former British Mark 2 carriages in several configurations, the S class carriages for the Palmerston North-Wellington Capital Connection and the SR class carriages, which KiwiRail owns and leases for the Te Huia Hamilton to Auckland regional service. Twelve carriages are also being overhauled to replace the current S class carriages and will be deployed in two sets of six.
|Image||Class||Number in class||In service||Passenger capacity||Notes|
|AK carriage||17||2012–present||AK 63; AKC 10||Used on the Tranz Alpine, Coastal Pacific, Northern Explorer services|
|S class carriages||8||1999–present||60||Used on Capital Connection service, Palmerston North to Wellington.|
|SR class carriages||12||2021–present||SR x6 seat 50, SRC x3 seat 20 and SRV x3 seat 38||Used on Te Huia service, Hamilton to Auckland.|
|Sue McCormack||Acting Chair|
|Greg Miller||Chief Executive – resigned November 2021|
|Rod Lay||Chief Financial Officer|
|Todd Moyle||Chief Operations Offier/Deputy Chief Executive Officer – acting CEO from November 2021|
|Garry Collings||Group Chief Information Officer|
|Joanne Black||Group General Manager Communications|
|Stephanie Campbell||Group General Manager Property|
|Usman Pervaiz||Group General Manager Innovation and Strategic Growth|
|David Gordon||Chief Operating Officer – Capital Projects and Asset Development|
|Andrew Norton||Group General Manager Human Resources|
|Alastair Cumming||Group General Manager Zero Harm|
|Jonathon Earl||Group General Counsel|
|Helen Rogers||Group General Manager Government Relations – Policy & Funding|
- "Board of Directors". KiwiRail. Retrieved 12 May 2021.
- "KiwiRail Integrated Report 2019". Retrieved 10 October 2019.
- "KiwiRail Half Year Report 31 Dec 2020". Retrieved 16 July 2021.
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- "Toll says slowdown is affecting it". 31 January 2007. Retrieved 22 May 2019.
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- "Government purchase of rail business closed one rail history chapter and opened another". KiwiRail. Retrieved 8 May 2019.
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- Young, Audrey (2 July 2008). "Govt: We paid top dollar for rail". The New Zealand Herald. Retrieved 22 May 2019.
- "No ulterior motive to sell off land or business says KiwiRail". Radio New Zealand. 31 October 2011.
- Adam Bennett (27 June 2012). "Huge writedown in KiwiRail value".
- "Positive growth continues alongside improvements to business capability". KiwiRail. 28 February 2013.
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- "KiwiRail Orders Another 20 Chinese Locomotives". Otago Daily Times. 20 July 2011. Retrieved 22 July 2011.
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- "Engineer trapped in Kaikoura quake drives the first train into Christchurch as line reopens". The New Zealand Herald. 15 September 2017. Retrieved 16 September 2017.
- "Ferry out of action after losing propeller". Stuff. 24 November 2013. Retrieved 16 September 2017.
- "KiwiRail ignored advice when fitting failed Interislander ferry propeller – report". Stuff. 15 December 2016. Retrieved 16 September 2017.
- "Midland line closed by fire".
- "KiwiRail to dump electrics". Stuff. 21 December 2016.
- "Government Saves Electric Trains". Scoop Parliament. 30 October 2018. Retrieved 22 May 2019.
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- "Budget 2021: KiwiRail the big transport winner with money for new locomotives and locally built wagons". The New Zealand Herald. 20 May 2021. Retrieved 11 October 2021.
- "Stadler and KiwiRail sign a contract for 57 mainline locomotives" (PDF). Stadler Rail. 11 October 2021. Retrieved 12 October 2021.
- "New locomotives to replace South Island fleet". KiwiRail. 12 October 2021.
- "Budget 2022 continues KiwiRail rebuild". KIwiRail. May 2022.
- "KiwiRail Annual Report 2015-2016" (PDF). KiwiRail. Retrieved 8 March 2019.
- "KiwiRail Half Year Report 2016" (PDF). KiwiRail.
- "CT Site Location Map". KiwiRail. Retrieved 2 May 2021.
- Andrea Fox (9 February 2019). "Ruakura inland port jigsaw puzzle coming together, slowly". The New Zealand Herald.
- Libby Wilson (30 April 2019). "Multimillion dollar inland port to bring jobs and products to the Waikato". Stuff. Retrieved 2 May 2019.
- "KiwiRail Annual Report 2012-2013" (PDF). KiwiRail. Retrieved 8 March 2019.
- Log cradle
- "KiwiRail Annual Report 2011-2012" (PDF). Archived from the original (PDF) on 1 June 2013. Retrieved 5 November 2014.
- "Opposition parties criticise TranzScenic plans". Radio New Zealand. 1 August 2012.
- "KiwiRail may spend $50M on new carriages". 7 May 2017.
- "Northern Explorer & Coastal Pacific Restart '22". Great Journeys of NZ. KiwiRail. Retrieved 30 January 2022.
- Nicholson, Michael (5 July 2021). "Long Distance Passenger Rail". Greater Auckland. Greater Auckland. Retrieved 30 January 2022.
- Johnston, Jodi. "Campaign for Better Transport Concerned About Project Restart '22 – The Campaign For Better Transport". The Campaign for Better Transport. The Campaign for Better Transport. Retrieved 30 January 2022.
- "Half-million dollar rail project at Waitati". Otago Daily Times. 22 September 2009. Retrieved 26 September 2009.
- "Companies Office – ONTRACK Infrastructure Limited". Retrieved 25 September 2010.
- "KiwiRail Putting Hillside Workshops Up for sale". Radio New Zealand. 19 April 2012.
- KiwiRail 2011, p. 2.
- "KiwiRail – Executive Team". KiwiRail. Retrieved 4 May 2019.
- "KiwiRail group chief executive Greg Miller quits". RNZ. 24 November 2021. Retrieved 28 November 2021.