The Government has released the BIM documents that show the information that incoming ministers have received on various portfolios and areas of responsibility. This is a summary and commentary on the BIM for Kiwirail, which can be read here.
The Kiwirail BIM is a straightforward document that sets out the history of the organisation and its achievements to date. The most relevant part for policy formation for the incoming document is best located in the sections headed "Challenges" and "Opportunities" on pages 16-17.
The listed challenges include :
- Digital disruption, including big data, smart data, AI and automation.
- North Island population growth resulting in increased demand for commuter services.
- Shifts in international freight flows.
- Volatile international commodity markets.
- Environmental and sustainability issues.
- Reinstating the Main North Line after the Kaikoura Earthquake to its full capacity for customers.
- Ageing rolling stock impacting the reliability of services.
- Alignment with unions on strategic priorities to drive productivity.
- Shareholder alignment on rail policy and funding mechanisms.
- Competitively servicing the market and providing resilience across Cook Strait.
- Building risk based systems and worker participation to deliver a step change for health and safety performance.
- Attracting and retaining talent in a competitive market to mitigate Kiwirail's ageing workforce.
- Growing use of passenger rail
- Crucial need of a long term funding profile to support longer term decision making on simplifying the business, standardising assets and investing in people to support growth strategies.
A summary of the key points could include: the need for funding certainty (subsidies), commuter and passenger service capability, maintaining rolling stock, attracting young people to work for Kiwirail.
While opportunities include:
- Domestic freight market modal share growth
- New freight sectors such as fuel transportation
- Inland hubs/IMEX ports
- Maximising property less revenue and divesting non-rail required land
- HPHE with unions to drive productivity engagements
- Regional commuter rail services such as Auckland to Hamilton
- Common user terminal approach for Cook Strait ferries
- Auckland Network Integrated Operating Model
- Highlighting Kiwirail's sustainability story and contribution to regional economies
Some of the issues which are not mentioned and which should be brought into the debate include: Whether the achievements of key development strategies like the Turnaround Plan and Commercial Review have the right balance in terms of commercial strategies and policies for Kiwirail. Examples of key decisions that have been included in these challenges that are open to question include:
- Reducing capacity in the rail freight ferry operations by choosing not to replace withdrawn rail ferries
- De-electrifying the North Island Main Trunk
- Large scale contracting out of key maintenance services such as locomotive and rolling stock overhauls and track construction and maintenance.
It remains to be seen whether the current board is capable of revisiting some of these decisions should the government choose to highlight some of these issues. Kiwirail would probably say the previous administration failed to guarantee enough funding to ensure the historic operational models of these services could be maintained.
The operation of commuter services is largely driven through local government administration of the development and partial funding of them although NZTA funds a percentage of these services. At present Kiwirail does not operate many of these services but does provide the infrastructure they run on.
During the term of the previous administration only a few rail lines were downgraded or stopped operating. Key among them was the Napier to Gisborne line and the North Auckland line. The PNGL is to be considered for re-opening while funding for an upgrade of the North Auckland route has already been announced. The government has announced a focus on regional rail development but it seems unlikely lines like Rotorua Branch and SOL would be re-opened in future.
Kiwirail has claimed that non-rail related land should be divested. A key question is where this land is located. Anything that is either a present day or former rail corridor should not be divested.
Kiwirail is only of a number of transport modes in New Zealand and it remains to be seen what the best fit on a case by case basis will be for a range of different options including road and sea transport.
