Future use of the Napier to Gisborne Rail line

Article by Brian Fisher and Supporters of the Bay2Bay Rail Trail

It’s a truism in life that if you hear something often enough you’ll believe it. One of those things that we keep hearing is that rail will one day be the saviours of our global warming catastrophe. It’s a very brave and un-PC person that would challenge this. Here in the Bay, I’ve heard this time and again from politicians, mostly dare I say the “uninformed”, people whom you’d hope would take a wider view of the world and not just parrot the same old rhetoric. As I write this article, I can almost hear the cries of heresy, because what I have to say challenges many of the urban myths about rail efficiency and cost effectiveness, that it save lives and reduces greenhouse gases. If you don’t believe me, do some research yourselves.

A few facts;
 Rail in New Zealand has not been profitable (or economic in anyway) since the 1940’s
 Since 1950 the amount of rail line in NZ has been reducing from a high of 5,600km to the current 4,000km. Why is this? well it’s because those lines that were removed were uneconomic and the cost of maintenance and upgrade quite simply couldn’t be justified based on income (or the local economic benefit)
 Since 1991 track renewal has averaged < 40km per year and has never been greater than 60km p.a. Why is this? Well quite simply because it is too expensive to build rail line and there isn’t enough profit in rail to justify upgrading the line.
 In July 2008, government equity in KiwiRail & ONTRACK was valued at $12bn, this is the same as Meridian, Genesis, NZ Post, Mighty River Power, Transpower, Solid Energy and all other SOEs combined. In 2007/08, these SOEs had an after-tax profit of $637m on revenues of $9.4bn (ROE 5.3%), yet Rail (+ferries) had negligible profit on revenues of $741m. There would have to be a tripling of rail revenue without increasing costs to get a similar ROE
 We have been told by Government that rail needs $1bn to rebuild the rundown network. Why should NZ invest in an infrastructure that hasn’t been profitable for over 50 years? Toll certainly understood this and could not justify the investment based on expected returns and sold the old dog back to us!
 We are told that rail is safer, yet Truck-related road deaths are 5.4/year and Rail-related deaths are 5.3/year (average fatalities per billion NTK, 1998-2007)
 We are told that shifting freight from road to rail reduces congestion on our roads, yet this ignores congestion issues at transfer points, at level crossings, in the rail network and off-peak scheduling of the larger trucks that actually compete with rail.
 The congestion figures quoted by rail advocates are for Auckland (70%), and Wellington and Christchurch (20%). There is little advantage to these places by increasing the rail freight share as it carries only non-urgent freight which can be carried off-peak by trucks
 The conventional wisdom tells us that “rail is 4x better than trucking”, but typically quoted figures are from Europe which may not be applicable to NZ. And when used to justify projects, only the operating emissions are measured, ignoring completely the full lifecycle and input costs for steel, concrete and diesel, all significant sources of CO2 emissions and the major inputs to rail infrastructure. In the Netherlands, it is estimated that 45% of total rail energy use is in providing the rail infrastructure. This proportion would be much higher on lightly-used tracks in NZ.
 In the USA it was found urban rail energy payback periods were often longer than the project lifetime, and for one light rail project in Portland, Oregon it would take 172 years!
 We are told that commuter rail can help reduce CO2 emissions, yet there are huge subsidies paid to encourage patronage which just internalise (hides) the true costs. Indeed, in the USA they have found that rail uses the most efficient bus routes – lowering their average energy efficiency

And of course there are many more examples of how inefficient rail is. That doesn’t mean that rail is a completely wasted investment, because it’s not. It is very efficient at carrying non-urgent high volume freight such as coal and timber. In areas where timber and coal are the main freight we should continue to invest in rail. In all the other areas we should not. Which brings me to the main point of this article, the future use of the Napier to Gisborne rail line.

There is no good economic reason to maintain the Napier to Gisborne rail line for freight. But there is a very good economic argument to turn it into a premier cycleway that would rival the Otago Rail Trail and would inject a much needed boost into the East Coast and Hawkes Bay economy. The Otago Rail Trail brings 11,000 visitors $8m p.a. into the central Otago area, and creates 75 fulltime jobs. I feel pretty sure that a rail trail from Napier to Gisborne (Bay to Bay), could easily do that (and more), and would definitely bring more to the region than the one train a week that uses the current line.

What’s involved in a conversion from rail traffic to bike traffic? Well not much in infrastructure terms; remove the rails and sleepers (cost neutral as they can be sold for recycling), crush the ballast and compact to form a suitable cycling surface, put barriers on the bridges, lighting in tunnels, and signs along the way. Total cost probably less than $2m for 200km of exceptional cycling trail.

Of course this all takes considerable planning, politicking and negotiation. But it is a logical and cost effective way to bring much needed tourism development to a region that is crying out for new and attractive initiatives. There are numerous examples of these multi-use tourism and recreation facilities in Australia, Europe, USA, Canada and the United Kingdom, and of course the great Central Otago Trail.

This Bay2Bay trail would provide an exceptional easy 3 to 4 day cycle journey though the stunning East coast. From rugged hill country farmland to forestry and coastscapes, the alignment crosses impressive viaducts and passes through 20 tunnels, all done in the delightful Hawke’s Bay climate. This ride has the potential to become world renowned, and would provide an entre for more visitors to summer holiday spots like Mahia and the hot springs at Morere. As with the Otago trail, this trail will bring business opportunities to the small towns and villages along the line, and farms offering accommodation and food. Creating new wealth in the communities and employment opportunities.

Recently the Chairman of the Hawkes Bay Regional Council, Mr Dick, said the Napier to Gisborne Line is “Sacrosanct” and that it is crucial for regional development. But there is no evidence to suggest that this is the case, indeed the “Bays” have survived without a quality rail service for decades. What really needs to be done is to stop looking at these uneconomic assets as if they are saviours and “sacred cows”, and start thinking innovatively about how best to gain economic leverage from them. These assets belong to ALL New Zealanders, and as owners of them, we should expect the Government to be making sound investment decisions. For over 50 years, rail has not been a sound investment, it’s time for the Government to let go of the sacred cow and allow this land and infrastructure to be put to good economic use.

The Government recently allocated $50 million to develop a series Great Rides, the Bay2Bay could be one of those, and it could be up and running in just a few months if the money was available. But it will take political will; have we got enough to challenge the status quo and the boring uneconomic thinking of our regional leaders.

Special thanks to Dave Heatley the author of the primary work quoted in this article. For a full copy of Heatley’s work go to http://www.iscr.org.nz/f511,14914/14914_The_history_and_future_of_rail_in_New_Zealand_RR_.pdf

References
The future of rail in New Zealand Dave Heatley, Research Fellow, NZ Institute for the Study of Competition and Regulation
Affleck Consulting. (2002). Comparison of Greenhouse Gas Emissions by Australian Intermodal Rail and Road Transport. Brisbane: QR Network Access.
Bos, A. J. M. (1998). Direction indirect : the indirect energy requirements and emissions from freight transport. Groningen. Retrieved from http://irs.ub.rug.nl/ppn/17069478X.
Crown Company Monitoring Advisory Unit. (2008). Briefing to Incoming Ministers on entities monitored under Vote State-Owned Enterprises. Retrieved from http://beehive.govt.nz/sites/all/files/CCMAU_VSOE_BIM_0.pdf.
The Privatization of New Zealand Rail Part 2: Quantitative Cost Benefit Analysis. New Zealand Institute for the Study of Competition and Regulation. Retrieved October 2, 2008, from http://www.iscr.org.nz/f251,5018/5018_tranzrail_part_2_100799.pdf.
Ministry of Transport. (2005). National Rail Strategy to 2015. Retrieved from http://transport.govt.nz/assets/NewPDFs/nrs.pdf.
Richard Paling Consulting. (2008). National Freight Demands Study. Ministry Of Transport, New Zealand. Retrieved from http://www.transport.govt.nz/assets/Images/NewFolder-2/FREIGHT-STUDY-EXEC-SUMMARY1.pdf.
Orr, S. (1981). New Zealand Railways Corporations. A Short History of Previous Experiences With New Zealand Railways as a Corporation.Economic Division, Ministry of Transport.
O'Toole, R. (2008). Does Rail Transit Save Energy or Reduce Greenhouse Gas Emissions? SSRN eLibrary. Retrieved February 10, 2009, from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1263426.

Article by Brian Fisher Hawke’s Bay Cyclist and supporters of the Bay2Bay Rail Trail.