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The Rundown of Regional Rail

The Rundown of Regional Rail in NZ’s North Island…


Stuart Dow… Rail Consultant March 2016.
 jstuartdow@hotmail.com

Background :- Until the late 1970’s the rail system of New Zealand was basically a dieselised version of the previously steam operated rail system of the 1950’s/60’s.

The rush to dieselise the regional lines was however not met with enthusiasm by all within “the Railways”, as scant regard was given to the concerns expressed by the Civil Engineers with regard to the increased stresses on the track caused by the different riding characteristics and heavier axle weights of the new General Motors diesel locomotives, first introduced to regional lines in the mid to late 1960’s…..1968 in the case of Northland.

This would have LONG term implications for regional lines as there was no programme of track upgrades instituted in conjunction with the introduction of said locos. Most regional lines being of lightweight construction.

There were some positive developments e.g. the introduction of the first Rail Ferry in August 1962, a move to more productive freight rolling stock such as container wagons and the purchase of the first second generation diesel locomotives.

However the wagon fleet in the early 1980’s consisted of mostly two axle wagons with an average capacity of 15 tonnes (approx. 26,000 wagons in total) as opposed to now, where there are 4585 wagons with an average capacity of 45 tonnes, of which less than 150 are of the two axle type. Rail handled 30 percent of the NZ freight task in 1980, now it is around 10 percent!


Financially, rail was in the doldrums, having recorded numerous deficits, partly as a result of the Government imposed freight rate freeze from 1971 for several years and suffered once again in the early 1980’s when the Government imposed a wage and price freeze. This was in spite of record tonnages being carried for most of the 1970’s, culminating in 13.6 million tonnes being moved in 1977.


However in 1978 the distance limit that regulated trucks competing against rail was extended from 40 miles (65 kilometres) to 90 miles (150 k’s). This resulted in rails tonnage dropping 18 percent by 1983. This limit was abolished in October 1983 and rails tonnage dropped to 8.5 million tonnes in 1993.


Meanwhile costs continued to climb, especially fuel costs due to the oil price shocks of the 1970’s, resulting in larger deficits being recorded year on year. Also Government policy used “the Railways” to soak up the unemployed and take on seasonal staff e.g. Freezing workers. In addition “the Railways” was being used as New Zealand’s trade training school with large numbers of apprentices being trained, the majority of which then found their way to private industry.

The fulltime staff level in 1980 was approx. 22,000, now it is approx. 4200. The social roles performed by rail were quantified at $61.3 million for the year ended March 1980. This social role is something that has never been recognised by any Government, to this day…!!!


By the late 1970’s the WHOLE network, not just the regional lines, was in REALLY BAD shape with numerous derailments due to the hammering the track had taken during the freight rate price freeze when the network was pushed to the limit conveying all the freight on offer.


It took “MASSIVE” rebuilding of the North Island Main Trunk (Auckland - Wellington) associated with the “Think Big” electrification project in the mid 1980’s plus the opening of the Kaimai Tunnel and Deviation to address the worst of the rundown but areas/lines like Northland /Napier – Gisborne /Marton – New Plymouth /Masterton – Woodville and Stratford – Okahukura not to mention the regional lines of the South Island got almost nothing but essential repairs/renewal. In fact, staff from regional areas were seconded to urgent renewal works on the Trunk lines, to the detriment of the lines in their own areas.


The rundown of regional lines continues to this day despite promises from owners, both Government and private. As an example, in 2011, Steven Joyce (at the time Minister of Transport) was queried by rail activist Ken Crispin at a meeting in Gisborne re the need for more rolling stock for the Napier - Gisborne Line and was told more would be made available. No such rolling stock ever eventuated.


There is one exception to this rundown, in the Southern Taranaki/Whanganui area, where the line south of Hawera, to Marton, has had significant expenditure to upgrade the line for the use of the dairy industry.


However, this proved to be to the detriment of the Stratford – Okahukura Line (SOL), which after a small derailment (repair cost, some $300,000) several years ago, the line was “mothballed” (read closed) and is now leased for 30 years to a “railcart” tourist venture.


This decision is so short sighted its unbelievable and has COMPLETELY removed Kiwirail from the Auckland to Taranaki overnight freight market as well as removing a diversionary route from use by Kiwirail, should the Main Trunk line between Marton and Taumarunui be closed for any reason.


As a result, all freight from Taranaki destined for Hamilton, Tauranga or Auckland etc. must be taken south to either Marton or Palmerston North prior to going north instead of traversing the much shorter SOL…Whareroa (Hawera) to Hamilton via the SOL, 311 kilometres, via Palmerston North, its 580 k’s.

This adds lots of costs to the business (but removes the need to maintain 143 kilometres of railway in difficult country). One in particular is the decreased utilisation of wagons as heading south before heading north adds up to 12 hours (possibly more) to a return trip per wagon, meaning more wagons are required to do same the task.


Also there is the need for more powerful locomotives as opposed to using the SOL due to steep grades between Waitotara and Whanganui. Another disturbing side effect is that it has (in my opinion) almost rendered rail in the Taranaki, north of Hawera irrelevant and in danger of closure!!


However the Southern Taranaki/Whanganui experience is NOT the norm for the regional lines of the North Island.


NORTHLAND…A Case Study

In the early 1980’s, Northlands rail system (in this context, ALL lines north of Waitakere) was probably the most rundown of all the North Islands regional lines.


Due to the geography of the region, the lines of the winterless North have always had higher maintenance costs with numerous grades, tight curves and 15 tunnels. This makes things difficult operationally and for a slower journey time, OK in the 1950’s but not what todays “just in time society” wants.


Tunnel Number 2, the Makarau Tunnel (approx. 15 kilometres north of Helensville) has been the key operational difficulty for the line almost since it was completed, with issues with the lining of it being reported within one year of its completion, in 1897. This tunnel is the key reason that Hi-cube 2.9 metre (9 feet 6 inch) high containers cannot be conveyed into/out of Northland. More on this later.


When road transport was deregulated in 1983, almost overnight the majority of high value freight disappeared from rail across the country and with the road journey from Auckland to Whangarei being around 40 kilometres shorter (171 v 213) and far quicker, this had a devastating effect on the chances of Northlands lines breaking even, let alone being profitable.


As a result, rails role in Northland focussed on bulk commodities such as inward loads of coal, fertiliser and empty shipping containers and outward loaded containers, logs and woodchips. From the mid 1990’s onward, log traffic became a substantial traffic within Northland (several hundred thousand tonnes per year), with the opening of a large wood chipping mill at Portland. Until the Port of Whangarei moved to Marsden Point in 2007, the woodchips produced were railed to the port for export.


Changing trends in transportation such as the end of conventional shipping of meat from the Port of Opua ex the Moerewa Freezing Works also affected the makeup of the Northland rail network and as a result, the Moerewa – Opua Line was partly “mothballed” and partly leased in late 1985.


Granted, rail gained the haulage (of the now containerised) output from the “Works” to Auckland Port, although this traffic eventually ceased around 10 to 15 years ago, due to further changes to meat transport regulations and a change in “Rails” way of doing business in the “Beard’ era. As an aside, the Moerewa Freezing Works is no longer connected to the rail network. How short sighted..!!


The “Beard” era refers to when Tranzrail was run by CEO Michael Beard from 2000 to 2003. Under his tutelage rail operations in NZ were (in my opinion) destroyed and have never recovered. He instituted a “mode neutral” and “virtual railway” policy. Under the “mode neutral” policy, large amounts of rail freight was diverted to road because Tranzrail didn’t have to maintain the roads, just pay an access fee. While this reduced costs for Tranzrail it did little for morale...or for Northlands railway lines


The “virtual railway” was where rail sold or leased large amounts of its rolling stock to overseas leasing companies then rented said equipment back. Most maintenance requirements were contracted out as well. More bad news for Northlands railway lines.


Also introduced was the concept of fixed consist trains (although not in the north) with no shunting enroute, just the swapping of containers at stations. This alienated numerous customers on two levels. No longer could they expect their freight to arrive in a wagon which they could unload at their leisure and should they wish to send freight, a container was almost always a prerequisite.


This was on top of Tranzrail withdrawing most 2 axle (4 wheeled) freight wagons in the same period, in a knee jerk reaction to several shunting yard deaths. No real effort was made to assist customers to transfer freight to other railway rolling stock and numerous customers were told that their freight wasn’t paying its way and to take it elsewhere. Numerous private sidings (customer owned connections to the rail network) were closed as well.


All in all, the “Beard era” was not good for Northlands railway lines. This era came on top of quite a bit of upheaval in the late 1980’s. Failure to get the contract to ship “Triboard” from the Triboard (now JNL) plant in Kaitaia (opened in 1987) appears to be behind the decision to close the Otiria to Okaihau Branch Line in November 1987. This was in spite of tens of thousands of tonnes of fertiliser being railed to Okaihau yearly and the numerous plantation forests approaching maturity in the Far North.

Not long after closure, the line was ripped up so that the heavyweight rail could be sent to the South Island to upgrade lines there. The irony of this being, several years later when rail was used for a year or two, to convey “Triboard” ex Otiria, for export via Auckland and/or Tauranga.

The coal traffic to the Portland Cement Works ex Huntly (an almost daily train of its own) was lost some time in the late 1980’s, early 1990’s. Firstly coal barged from the South Islands West Coast was substituted and later cheaper IMPORTED coal. Imported coal (approx. 60,000 tonnes a year) continues to used at the Cement Works to this day.


The consolidation of the dairy industry also had an effect. In 1980 Northland had 4 rail served dairy factories, at least 2 of which were coal fired, with the coal being railed from Huntly. In 1987, the Kaipara Dairy Company in Helensville closed and in 2000, the Northern Wairoa Dairy Company in Dargaville closed (both coal fired). Both had an effect on the lines of the north, with the Northern Wairoa closure really changing the face of the Dargaville line forever.


It appears that the closure of the Dairy Factory was used as an excuse to remove the container gantry at Dargaville even though there was a large seasonal traffic in containers of squash, kumara and onions for export. As a result, all this traffic was lost to rail and the only traffic carted on the Dargaville Branch since this time has been logs. However there have been a few hiccups and after a derailment around 18 months ago, the line was “mothballed” and now has a “railcart” operation on part of it. More bad news for Northlands railway lines.


With the scrapping of almost all 4 wheeled wagons in the early 2000’s, traffics such as scrap steel and fertiliser, both staple traffics on the lines of the north basically ceased apart from some fertiliser conveyed to Wellsford in bottom dump wagons.


Also around this time, customers north of Whangarei were told that export shipping containers would no longer be handled at Otiria and that if a customer wished them to be conveyed on rail then the containers had to be delivered to rail in Whangarei. The result of this was that ALL container traffic ex the Moerewa Freezing works and NZ China Clays at Matauri Bay (25,000 tonnes a year in the case of the later) were TOTALLY removed from rail. More bad news for the lines of the north.


The removal of container traffic north of Whangarei did not apply to the Dairy Factory at Kauri but apart from this traffic, ONLY logs destined for both Portland and the Waikato/BOP were conveyed from north of Whangarei from the early 2000’s. In my opinion, early signs of a line being set up for closure. Even though there have been 3 owners since the early 2000’s, not one of them has seen fit to do anything to increase the use of the Whangarei – Otiria railway or the other lines of the north.


The removal of container service to Otiria is typical of what rail management has done throughout NZ when it wants to set a line up for closure. It disconnects the railway from its customers and when queried management would say there isn’t the demand or there is a shortage of container wagons, or the rolling stock is “life expired”, etc.etc.


The reality is that these and numerous other excuses, like the old “it’s a Kiwirail decision” so as to give the Government deniability of involvement, are a load of hogwash. Even though Kiwirail has obligations under the SOE Act, they are conveniently forgotten time and time again, not to mention the social and environmental role that Kiwirail performs and gets no credit for.


Basically the only thing the Government wants from Kiwirail is a return on any monies allocated, so to get the MOST “bang for the buck” Kiwirail has little choice but to chase the LONG haul freight e.g. Auckland to Christchurch, where more revenue per wagon load is earned. The result is that unless you are Mainfreight or Fonterra or the like and are located on one of the trunk railway lines, you as an existing or potential customer, don’t get a look in…!!!


Kiwirail has “hung its hat” so to speak on the dairy, forestry, freight forwarding and IMEX (Import /Export) container traffics, to the detriment of any other freight on offer but only if you have a LARGE volume to move or have (political) clout…!!! Thus the short hauls like those from Northland to Auckland are ignored except those from Fonterra’s plants at Maungaturoto and Kauri.


If it wasn’t for Fonterra’s 2 plants in Northland, I believe the railway lines of Northland would have closed years ago. Note, not one tonne of cement is hauled ex the Portland Cement Works even though cement produced there is exported throughout the Pacific Islands and the plant once boasted its own extensive rail operation with a connection to the national rail network.


The likes of the lines of Northland and the Napier – Gisborne line are two examples of lines that don’t fit Kiwirail’s long haul container trains or unit trains of milk or coal business plans and have suffered from neglect in maintenance such as Kiwirail’s admitted lack of culvert maintenance on the Napier – Gisborne Line that contributed to the washouts that currently have that line closed (Mothballed).


It astounds me that although there have been plans drawn and procrastination for over 100 years re the Makarau Tunnel and the problems it creates operationally to running trains in Northland, especially “Hi cube” containers, nothing has ever been done to fix the problem. One only has to see the EXPLOSION in tonnage that occurred on the Napier – Gisborne line once it was belatedly cleared for “Hi cube” containers in approx. 2010, to see what a catalyst fixing this issue could be for Northlands railway lines and the regional economy..!


There does not appear to be any lateral thinking going on within Kiwirail to solve this problem, probably because a small fleet of low deck height container wagons (which can carry “Hi cube” containers in areas of restrictive clearance such as Northlands tunnels) means another type of wagon and its associated spares. This fly’s in the face of Kiwirail’s drive to reduce the number of wagon types and associated spares to reduce the carrying costs of the inventory. Yes, Kiwirail are that desperate to save a dollar..!


The aforementioned low deck height wagons have been a feature of the British railway scene for well over ten years in container traffic and the loading gauge there is more restrictive than NZ’s. I wouldn’t be surprised if some were available for purchase or lease from the U.K and would only need altered and/or replacement wheelsets and possibly a change of couplings prior to use in NZ.


Otherwise I’m sure Kiwirail’s Chinese wagon suppliers could knock a few up based on the numerous U.K designs. This would obviate the need to lower the 15 tunnels in Northland and these wagons could also be used between Christchurch and the West Coast of the South Island, another regional railway line not able to convey “Hi cube” containers. Something you would have thought would not be a problem, nearly 20 years after the introduction of “Hi cube” containers to NZ..!


So there you have it, a fairly basic assessment of regional rail in New Zealand, Even though the case study was based on Northland it could have been any regional line in NZ as they all have faced or are facing the same or similar problems in their effort to be an essential part of New Zealand’s transport infrastructure.


Conclusion/Addendum


Whilst researching and writing this report I learnt that Kiwirail has announced plans to “mothball” (read close) the North Auckland line from Kauri (site of a large Fonterra plant), approx. 15 kilometres north of Whangarei, to Otiria, approx. 70 k’s north of Whangarei. Otiria is the site of a large log yard where logs from all over the top of the North arrive by truck for on forwarding by rail. The majority go to Portland (approx. 10 k’s south of Whangarei) to be chipped and are then trucked to Marsden Point for export. Some of the higher grade logs are railed to the Waikato/Bay of Plenty for processing.

I had already chosen Northland as my case study prior to this announcement. How prophetic..!!!

The information contained in this report is from personal experience/knowledge (I worked for Kiwirail and its predecessors for 29 years) and reference to information found on the Internet plus various books/magazines including the NZ Railway and Locomotive Society’s “Observer”.


I have seen a copy of an internal Kiwirail Newsletter trying to justify to the employees, the “mothballing” of the piece of line in Northland and surprise, surprise, the same old lines have been trotted out again and as an example I quote “the wagons are 50 plus years old”. This is NOT correct, the oldest wagons used in this traffic are 45 years old this year and although not ideal, 45 year old wagons are not uncommon in rail operations worldwide.


In fact, the main diesel locomotive used in the South Island, the DXB/DXC are between 40 and 44 years old, this year.

The newsletter also tries to justify things by stating there is only one customer on the line and that the contract was only for 21 years. Obviously it worked for 21 years, so why not renew for a further period..? Also hinted at, was lines with only one customer being under threat “due to the need to reduce issues on some parts of the Kiwirail network”. Kiwirail speak for pay up or the line will close..!!


I say the issue is with Kiwirail and its business model..!! It is high time the rail network was removed from Kiwirail control, thereby allowing them to follow their (in my opinion) flawed business model and let some other entity run the network (the track and structures) for the good of New Zealand as a whole.


This would then enable other potential operators to enter the freight market without being mucked about by Kiwirail, who are so scared of competition that they put completely unnecessary obstacles in the way. Just look at the feet dragging by Kiwirail with regard to the attempts to resurrect a rail operation on the Napier – Gisborne Line..!!


I FIRMLY believe this is the ONLY way forward for railway lines in regional New Zealand, otherwise there won’t be any left. The simple fact is that MOST Regional railway lines DO NOT fit with Kiwirail’s business plans now or in the future..!!


The death by a thousand cuts of our regional railway lines must NOT be allowed to continue..!!


I hope this has helped you with understanding the complexities of the NZ Rail industry. I am more than willing to answer any questions you have. Feel free to email me if I can be of assistance.


Stuart Dow… Rail Consultant March 2016. jstuartdow@hotmail.com