The new investment funding for the rail industry announced on 1 October 2008 will strengthen New Zealand’s transport sector, enabling it to expand its business in key freight and public transport markets, the New Zealand Railways Corporation (NZRC) Chairman, Jim Bolger said.
Mr Bolger was commenting on the Government’s announcement of an additional $121 million over and above existing commitments to rail.
“We now have a structure and the prospect of funding which will enable the industry to work together to meet the major transport challenges New Zealand faces,” he said.
“The investment programme Dr Cullen has referred to will accelerate the process of the operating and infrastructure arms of the business catching up on past years of severely curtailed spending. It will also enable the industry to and gear up for future growth.
“The five-year funding programme the Government is working on will provide certainty for the industry’s future.”
Mr Bolger said the NZRC board has already begun the task of establishing priorities for investing the money.
“It’s a question of establishing the right balance between improving infrastructure, buying new rolling stock and upgrading support systems. There is a degree of urgency about getting the process started but we must also be careful to ensure we have got the mix right.”
Mr Bolger said the recent National Freight Demand Study forecast overall freight volumes to increase by 75 percent over the next 25 years. While modal share is predicted to remain relatively constant, the sheer increase in freight volumes makes rail’s role in the transport mix extremely important.
Rail has a natural advantage in hauling the output of export industries such as dairy products, coal, meat and steel as well as in the carriage of people in major urban centres.
On a typical midweek day, there are approximately 140 freight trains operating around the country. They haul around 14 million tonnes of freight over an average distance of almost 300 kilometres.
“Export industries are vital to achieving strong economic growth,” said Mr Bolger. “When you consider that the flow of manufactured dairy products is forecast to almost double over the next 25 years, it becomes clear how important an efficient transport and logistics chain becomes to get these products to markets.”
“If rail did not exist, there would be many more trucks competing for space on an already congested state highway network. It’s questionable whether the roading infrastructure could cope with such volumes.
“Our goal will be to increase the supply and quality of rolling stock and to strengthen the infrastructure to serve these markets. Because infrastructure projects take time to bring to fruition, it won’t happen overnight but I have no doubts about the value to the New Zealand economy of making this investment,” he said.
Issued by the New Zealand Railways Corporation