KiwiRail

KiwiRail Holdings Limited

Type	State-Owned Enterprise
Industry	Rail transport, shipping, property management
Predecessor	Toll NZ
Founded	1 July 2008 (2008-07-01)
Headquarters	Wellington, New Zealand
Area served	New Zealand
Key people	John Spencer (Chairman) Brian Corban (Deputy Chair), Peter Reidy (CEO)
Services	Rail freight Long-distance passenger rail Urban passenger rail Inter-island ferries
Revenue	NZ$720.6 (FY June 2015)[1]
Operating income	NZ$168 million (FY June 2015)[1]
Divisions	KiwiRail Scenic Journeys KiwiRail Freight Interislander
Subsidiaries	KiwiRail Finance Ltd KiwiRail Ltd
Website	www.kiwirail.co.nz

KiwiRail Holdings Limited is a New Zealand State-owned enterprise responsible for rail operations, which trades as KiwiRail. Headquartered in Wellington, New Zealand, KiwiRail is the largest rail transport operator in New Zealand. Since July 2010 John Spencer has been the chairman. KiwiRail Freight, KiwiRail Scenic Journeys and the Interisland Line are all subsidiaries of 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^[2] to create one company that controls both rail and ferry operations and rail infrastructure. Toll retained ownership of its trucking operation.

Turn-around plan

A new DL class locomotive (9020), purchased as part of KiwiRail's turnaround 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.^[3]

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.^[4]

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."^[5]

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.^[5]

The plan includes five major points:^[5]

• "Step change" on the Auckland – Wellington – Christchurch "main trunk" route:
  • reduce transit time and improve reliability along the route – easing curves, removing speed restrictions, greater renewals investment in bridges and sleepers and passing loops. Currently, an express freight train journey between Auckland and Wellington takes thirteen and a half hours – similar to transit times in the late 1970s. A truck on the same route takes nine hours. KiwiRail aims to reduce transit times to 11 hours.
  • Improve exit and entry from Auckland and Wellington – improvements at terminals and on main lines to reduce transit times and conflicts with commuter services
  • Increase ferry capacity for rail freight – extend the length of Aratere and make Kaitaki rail capable
• Improve reliability and capacity:
  • Increased renewals on "other key routes", investment in replacement of sleepers, strengthening of bridges, refurbishment of track formation.
• Enabling investment:
  • Improved IT systems and processes, equipment and facilities at terminals
  • Forty new locomotives (see DL class) and 3,000 new wagons.^[6]
  • Improved track infrastructure
• The minor lines:
  • KiwiRail will review business on:
    • North Auckland Line
    • Stratford - Okahukura Line (mothballed 2009)
    • Napier – Gisborne Line (mothballed October 2012)^[7]
    • and North Wairarapa line.
  • Consultation with communities, customers and staff
  • Close or mothball by 2012 if anchor customers do not emerge
• Clarify and assign accountability for costs associated with operating Auckland and Wellington metro services. As a result, the Tranz Metro assets were transferred to the Greater Wellington Regional Council and contracts for running services were made "contestable' as in Auckland.

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.^[8]

In 2013, company Chairman John Spencer stated that over the last three years of the plan, rail freight revenue has increased by over 25%.^[9]

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.^[10] 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.^[11]

De-merger

On 31 October 2011, KiwiRail proposed splitting its land and rail corridor assets from its rail operation assets.^[12] 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.^[13] The de-merger took effect on 31 December 2012.^[14]

Asset sales

On 19 April 2012 KiwiRail announced it was putting its Hillside Engineering division on the market.^[15] 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.^[16]

In July 2012 it was revealed that KiwiRail was considering selling its Tranz Scenic division, its remaining long-distance passenger services.^[17]

Operations

KiwiRail Infrastructure and Engineering

KiwiRail Network replacing sleepers on the Main South Line at Blueskin Bay, Otago.^[18] Closest machine is a dynamic track stabiliser, followed by a Regulator, then a Continuous Action Tamper.

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.^[19] Rick van Barneveld, former head of Transit New Zealand, is its general manager.

KiwiRail Infrastructure and Engineering has three main areas of operation:

• It is responsible for the maintenance and operation of all of New Zealand's main-line rail infrastructure (see List of New Zealand railway lines).^[20]
• It provides rail operators with access to the rail network in return for the payment of track access charges. It is also responsible for the maintenance and development of the network.
• It is the rail network controller, providing services such as train control and signalling.

The network consists of:

• Route length: 3,898 km
• 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)

Yards and facilities

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

• Westfield, Auckland
• Southdown, Auckland
• Te Rapa, Fonterra bulk store yard, Hamilton
• Mount Maunganui
• Wellington
• Picton, Marlborough
• Addington, Christchurch (wagon repair)
• Middleton, Christchurch
• Taieri, Fonterra bulk store facility, Mosgiel

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.^[21] KiwiRail moved 4.58 million net tonne kilometers of freight in the same year.^[22]

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.^[21]

Current fleet

The Interislander operates three ferries. In 2011, the Aratere was extended by 30 m to add extra capacity.^[23]

Image	Name	Built	Entered service	Capacity			Notes
				Passengers	Road	Rail
	DEV Aratere	1998	1999	600 + 31 crew	1050 lane metres [23]	420 lane metres (32 wagons)[23]	Numbers are post 2011 modifications
	MS Kaiarahi	1998	2014	550	1900 lane metres [24]	none	built 1998 as Dawn Merchant; chartered temporarily by Interislander in 2014 as Stena Alegra while Aratere was out of service, then chartered long-term in 2015 and renamed Kaiarahi
	MV Kaitaki	1994	2005	1350 + 60 crew	1780 lane metres (550 cars) [25]	none	Built 1994 as Isle of Innisfree; chartered by Interislander in 2005 as Challenger; renamed Kaitaki 2007

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.

Image	Class	Introduced	Number in class	Number in service	Power output (kW)	Notes
	DBR	1980	10	3	709	Heavy shunting. 5 stored at Hutt Workshops and 2 scrapped.
	DC	1978–1981	85	41	1230	Mainline diesel-electric. 21 leased to Auckland Transport. 44 stored at Hutt Workshops.
	DFT	1979–1981	30	22	1800	Mainline diesel-electric. 3 leased to Auckland Transport. 8 stored at Hutt Workshops.
	DH	1979	6	6	672	Heavy shunting locomotive.
	DL	2010–2014	48	48	2700	Mainline diesel-electric.
	DSC	1959–1967	70	31	315	Shunting. 3 stored at Hutt Workshops
	DSG	1981	24	24	700	Heavy shunting.
	DSJ	1982	5	5	350	Shunting.
	DX	1972–1975	49	46	2240	Mainline diesel-electric. Classified DXB and DXC, two rebuilt into DXR, one withdrawn.
	DXR	1993	2	2	2420	Mainline diesel-electric.
	EF	1988–1989	22	17	3000	25kV AC electric locomotives. 3 stored at Hutt Workshops.
	TR	1936–1978	90	33	138	Light shunting, positioned in smaller yards and leased to industrial customers. 1 stored at Hutt Workshops.

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.^[15]

Corporate governance

Performance

Financial year[* 1]	Total revenue	Operating income[* 2]	Net income
2008-09[26]	$636 million	$63 million	-$186 million
2009-10[27]	$646 million	$74 million	-$48.1m million
2010-11[28]	$667.4 million	$100.3 million	-$31.1 million
2011-12[29]	$715.8 million	$77.6 million	-$77.7 million
2012-13[21][30][31]	$727 million	$77.5 million	-$174 million
2013-14[32]	$740.9 million	$108.2 million	-$229.3 million
2014-15[1]	$720.6 million	$90.5 million	-$168.0 million

See also

• Rail transport in New Zealand

References

External links

• KiwiRail

KiwiRail subsidiaries

• KiwiRail Freight
• KiwiRail Scenic Journeys
• Tranz Metro

Articles about KiwiRail

• KiwiRail value halves, 'BusinessDay, 3 June 2009.
• KiwiRail under price pressure, 'BusinessDay, 17 April 2009.
• MP at a loss after KiwiRail rejects plea, 'The Marlborough Express, 16 April 2009.
• Trains now called KiwiRail, 'Dominion Post, 30 June 2008.