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Northland Regional Council

The following has been copied from the Northland Regional Council web-site and links to relevant documents have been added.

ISSUE: Review of Rail in Northland – Progress Report
ID: A141159
To: Regional Transport Committee Meeting 8 June 2011
From: Vaughan Cooper, Growth and Infrastructure Manager
Date: 27 May 2011
Summary: The purpose of this report is to provide an update to the committee
on the issue of the future of the Northland Auckland rail line.
Report:
Background
KiwiRail has presented to the council in regard to the review of the Northland Auckland line.
This committee has been identified as the appropriate committee to review the future of rail in Northland and provide an informed and robust position on the future of rail in Northland.
Working Group
The committee has established a working group which has held an initial meeting (minutes are included as Appendix A).
The working group discussed the overall approach or goal for rail and considers that the goal is to keep rail operational in Northland – seeking a stay of execution whilst a plan to progress the future of rail is developed (covering both long term goals as well as interim steps).
The working group has identified a number of key areas for further investigation and progress.
These are discussed briefly below, in no particular order of priority:
Review of Land Use Strategy and Container Hubs
An initial investigation of the feasibility for establishing inland container hubs was undertaken by Enterprise Northland in 2009.
This may need to be updated and needs to be combined with a strategic review of the land-use and planning tools that can influence the role of rail – for example land-use zoning or incentives to locate logistic operations or large scale manufacturing in places with direct access to rail.
Engagement with Freight Owners
It is often asked what existing freight is being moved by rail within the region and what opportunities exist to increase rail’s market share.
 This requires engagement with the key cargo owners within the region and an open and honest discussion about the potential for increasing the volume of freight moved by rail. It is important to begin this process with the freight generators (the owners of product) rather than through the
freight transport providers.
Work has begun identifying the freight owners who use the Otiria to Whangarei section of the rail line, including an opportunity for engagement with these groups.

Understanding the Network in Northland

There needs to be certainty and clarity around the entire network north of Auckland and the exact issues and challenges faced by each part of the network – particularly around tunnel capacity and the reasons for speed and weight restrictions.
This would be a very useful starting point to ensure all those involved and interested in rail in Northland understand the status of the network.
Connecting into Auckland
Likewise there needs to be a greater understanding of the network into Auckland and particularly the long term future of the freight network connecting with the container hubs in South Auckland.
This particularly relates to the Auckland Council’s long term view of the Avondale to Southdown link and the opportunities for a container hub in
north western Auckland.
Engaging with KiwiRail
The working group wants to work constructively with KiwiRail to develop an understanding of how we fit in the turnaround package – is there a strategy after the turnaround plan? What made the other border-line rail lines stay above the cut-off?
There also appears to be a perception about the business and its operations – particularly what marketing is done in Northland to drive increases in freight volumes – this needs to be understood and a plan developed to improve if necessary.
It is noted that NRC staff have had an initial meeting with KiwiRail on behalf of the working group which was very productive and KiwiRail has indicated its desire to work with the region and to make any information available that the working group might want.
Economic and Social Value of Rail
There are a number of reports available that have attempted to provide a robust cost comparison for the movement of freight between rail and road modes – including a broad evaluation of road wear, road safety, fuel prices, etc.
 A small body of work is needed to summarise these into a collective report – including some discussion on the apparent conflicts between some of the reports.

Links with Marsden Point
The regional council has quite correctly identified that the future of rail in Northland is directly associated with the long term future of the port operations at Marsden Point (Northport).
The future make-up of ports in the upper North Island is outside the scope of this topic.
However, this process can usefully contribute through providing clarity and up-to-date information on the costs and benefits of constructing the
Marsden Point rail link.
This needs to be a broad review and update which considers all opportunities for construction and operation of the link – including private sector investment and or ownership. Certainty needs to be provided around the construction costs and timeframes.

Public Engagement on Review Process
There are a number of interested groups along with a general interest from the public regarding the future of rail in Northland and what is being done within the region to address this. It is recommended that the working group develop a communications plan for engagement over this topic – including consideration of how to disseminate information related to rail in Northland.
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Regional Transport Committee 8 June 2011 32
ITEM: 5.3

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Next Steps
The working group will be focusing on making progress on each of the topic areas identified above.
 Identifying the key parties to involve, whether additional research or information is required and developing timeframes and priorities for completion.
Compliance with Decision Making Processes:
The activities detailed in this report are provided for in the council’s 2009-2019 Long Term Council Community Plan, and as such are in accordance with the council’s decision making process and sections 76-82 of the Local Government Act 2002.
Recommendations:
1. That the report, “Review of Rail in Northland”, dated 27 May 2011, be received.
2. That the objective of this committee is to keep rail operational in Northland – seeking a stay of execution whilst a strategic plan to progress the future of rail is developed.

Regional Transport Committee 8 June 2011 33
Appendix A
Rail Working Group Meeting
Council Chambers of Northland Regional Council
Thursday 5 May 2011
13:30
Present:
Mark Simpson - WDC (part meeting)
Ken Paterson - NRC (part meeting)
Vaughan Cooper - NRC
Vibeke Wright - NRC
Ken Rintoul - RTC
Peter Casey - NZTA
Tim Condor - NZTA
Martyn Taylor – NZTA
Apologies
Kai Tun Chan - NZTA
Discussion on the goals of the working group
Initially discussion focused on a bottom line of preserving the options in the rail corridor – i.e. keeping the designation.
 However as the discussion progressed it became clear that the bottom line is in fact to keep rail operational in Northland – seeking a stay of execution whilst a plan to progress the future of rail is developed (covering both long term goals as well as interim steps).
Notes:
1. There are number of reports that would be useful to the working group and these need to be discovered and obtained (ref to Appendix A). Additionally there are a number of useful reports currently available to the working group (ref Appendix B).
2. Discussion about goals continued but become more focused on information the group wanted to have rather than goals for the group.

General Information for Working Group
• Option value for rail for freight clients
• Review of other lines – has there been any business models developed or review process for them we could learn from – check with other regional councils
• Robust cost comparison for movement of freight between Rail and Road modes.
Including broader evaluation which includes road wear, road safety, fuel prices etc.
Information from within the Region:
• Understand the opportunities to increase freight in network between Otiria and Marsden Point – focus on freight owners before freight movers. Consider how to convert their interest in using rail into real contracts rather than indications of support.
• Future freight task such as minerals that could be transported by rail – linked to airborne geophysical survey
• Costs and feasibility of inland port hubs at Otiria, Whangarei, Marsden Point?
• Long term view of land expansion in Northland and any possible constraints to business development Information from Ministry of Transport
• Economic Benefits of Rail Freight – independent reports from John Bolland Regional Transport Committee 8 June 2011 34
Information from KiwiRail:
• Understanding of how a mothballing decision would work – how long would the track stay in place?
• Where do we fit in turnaround package – is there a strategy after the turnaround plan?
• What made the other border-line rail lines stay above the cut-off
• Financial pressures now and moving forward?
• Rolling stock availability for Northland
• Options for upgrading NAL – can lower rolling stock help?
• Options for network north of Auckland to be owned and operated differently
• Do they have a view of how to change their culture / the perception of their culture
• In-depth into business
- are they operating efficiently?
- Are the unionised?
- Marketing plan for growth in market in Northland?

Information on the Role of Ports
• Need to agree the role of three ports into the future
• NZTA is leading an Upper North Island Freight Network Plan – which includes Northland, Auckland, Waikato and the Eastern Bay of Plenty. Initial view that the upper north island will need all three ports to cope with moderate levels of growth into the future
• Commodities – prices are increasing into the future – will greatly increase the ‘just in time’ demand because the commodities are too expensive to have sitting in storage.
• What is the current ability of Northport to efficiently handle unloading of containers within their land operations?

Conclusion:
• Fundamentally we must agree the role of Northport in the future of the upper north island freight task
• Northland must sell its value proposition as part of the upper north island freight task
• We must protect the rail corridor into the future and this can only be done by ensuring it continues to be used in the interim.

Next Steps
• NRC has a meeting with KiwiRail on Friday 13th – the matters raised above will be discussed with KiwiRail.
• Further meeting of Working Group be held prior to the next RTC Meeting (8th June).
Meeting Closed:15:30

Regional Transport Committee 8 June 2011 35

Appendix A: Reports wanted for Working Group

Independent Advice on the Economic Costs and Benefits of Rail Freight – Stage 1
Independent advice to Ministry of Transport as part of Ministry’s advice to Minister on funding Rail John Bolland Consulting Ltd
Independent Advice on the Economic Costs and Benefits of Rail Freight – Stage 2
Independent advice to Ministry of Transport as part of Ministry’s advice to Minister on funding Rail John Bolland Consulting Ltd
http://logjam.files.wordpress.com/2007/10/bolland-report-april-2010.pdf

Appendix B: Reports available to Working Group
Rail Investment and the Prospects for Northport, Marsden Point
Scoping Report Prepared for Northland Regional Council and Northland Port Corporation CityScope Consultants Ltd, May 2009
Copy available from NRC

Rejuvenating Rail Planning For the Marsden Point Rail Line

http://www.beca.co.nz/markets/transport/~/media/publications/technical_papers/rejuvenating_rail%20_planning_for_the_marsden_point_rail_line.ashx

Independent Advice on the Economic Costs and Benefits of Rail Freight – Stage 3
Independent advice to Ministry of Transport as part of Ministry’s advice to Minister on funding Rail
John Bolland Consulting Ltd, April 2010 Copy available from NRC

Future Freight Solutions – An Agenda for Action
Report of key discussion points that are exercising the private sector participants in
transport
New Zealand Business Council for Sustainable Development, April 2011
http://www.nzbcsd.org.nz/_attachments/NZBCSD_Freight_Future_Report_FINAL_26_April_2011.pdf

Upper North Island Freight Study
Identifying Current and Future Freight Flows in the Upper North Island – based on findings of the 2006 National Freight Demands Study – commissioned by NRC, ARC, EW, EPOB, NZTA
Richard Paling Consulting, August 2010
Copy available from NRC
http://www.nrc.govt.nz/upload/7767/Upper%20North%20Island%20Freight%20Study%20-%20August%202010.pdf

Freight Demand and Economic Justification for North Auckland Line Upgrade
Report commissioned by Ontrack
Beca Infrastructure Ltd, June 2006
Copy available from NRC

Northland inland port / distribution hub – pre-feasibility study
Investigation of the potential to develop multi faceted inland port distribution hub
Enterprise Northland, April 2009
Copy available from NRC    E-mail saveourrailnorthland@gmail.com for a copy of the .pdf file

The Question of Bigger Ships – Securing New Zealand’s International Supply Chain
New Zealand Shippers Council, August 2010
http://www.shipperscouncil.co.nz/documents/The_Question_of_Bigger_Ships.pdf

Mega Trends: Global and National Trends Affecting Regional Prospects
Report identifies long-term global and national trends that are likely to have significant implications for patterns of output, employment, and demographic change in New Zealand’s regions
Infometrics Ltd, April 2011
Copy available from NRC
http://business.naturecoast.co.nz/tl_files/ENTERPRISE/Publications/BERL%20Reports/Infometrics%20Mega%20Trends%20Report%202011.pdf

Understanding Transport Costs and Charges Phase 1
Stock-take of the current domestic transport funding, charging and pricing arrangements and a gap analysis to identify transport costs and charges information needs for Ministry of Transport
Hyder Consulting Ltd, September 2008
http://www.transport.govt.nz/research/Documents/UTCCPhase1finalreportSept08.pdf

Understanding Transport Costs and Charges - Phase two Transport costs in freight logistics
Report to to understand the relative importance of transport costs in freight logistics
Financial and Economic Analysis Team, Ministry of Transport, November 2010
http://www.transport.govt.nz/research/Documents/UTCC-Phase-2-Transport-and-freightlogistics-final-report-Nov2010.pdf   ( broken link  ? )