Kiwirail Or Cullen’s Folly?

I have a feeling I have mentioned once before my concern at the previous Government’s re-nationalisation of the railways.  I was therefore pleased that as one of the new Government’s responses to the mess confronting it, that the blank cheque for rail has been ripped up and that some careful analysis is to be done on the value of future investment in rail.

I am a member of the Wellington Regional Council’s Land Transport Committee and frankly I was shocked at the poor quality of the analysis done in a recent proposal for an extra $440 million in expenditure on rail in the Wellington Region over the next 25 years.  This is on top of the $2 billion or so already programmed for expenditure.  Amazingly this paper had gone through the Greater Wellington Regional Council’s Transport and Access Committee and had been put up for endorsement by the Land Transport Committee.  Along with a couple of others I was able to have a decision on this paper delayed on procedural grounds (it was 138 pages long, involved $440 million in new expenditure, and many of the Committee members had only been given two days to consider it).

I am all for improving public transport but worry greatly that some have a near religious like faith in rail as the solution, when it may be that less investment in buses and roading will deliver a much better outcome.  We have the perverse situation now in Wellington that once the new investment is completed on the Johnsonville line it would have been cheaper to give every passenger using the rail line in from Johnsonville a taxi chit than to have made this investment in rail.  Investment in an enhanced bus operation must have been better value (Transit New Zealand studies done as part of the Ngauranga to Airport study also show that hourly demand for the Johnsonville line – 1,145 in 2001, is predicted to collapse to 374 in 2016.  Why are we investing another dollar in the Johnsonville rail line???).

Nationally I would like to see a really thorough analysis on the benefit and costs of all future investment in rail, compared to the benefit of investment in road.  We only have a limited pot of money available to us and we need to spend it as effectively as possible.  I would also like to see a full analysis done (Kiwirail must have done this) on the expenditure that is necessary just to keep the existing rail network going.  I suspect it will be enormous.  We need to do a benefit cost analysis on this expenditure.  It may be that the economically sensible thing to do is to stop investing and look hard at how much of the network is actually economically viable.  I suspect that most of the Wellington commuter network is viable.  Some of Auckland might be also as will links to ports such as Tauranga.  I wouldn’t like to put much money on the rest being that viable.


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One Response to “Kiwirail Or Cullen’s Folly?”

  1. Sally Says:

    Charles, I am not surprised at the poor quality of the analysis done. I was a first term councillor with a small District Council in the previous term and when I questioned the long term sustainability and wanted more financial data of a new project, I was accused of being a mischief maker.

    In my council of eleven councillors and mayor, there was not one person with the financial skills to be Chairman of Finance. It was interesting that this council did not keep minutes of the audit committee.

    A problem, that was relaid to me by a staff member, was that the CEO stressed to his staff not to give too much information to Councillors as they would only want “more information.” It was apparent to me that the Council had employed the wrong person as their CEO.

    Wayne Brown the Mayor of Far North is correct when he talks of “councillors with learned behaviour.”

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