KiwiRail boss Greg Miller's plans to build a new train set

Friday, 31 May 2019

Deputy Prime Minister Winston Peters told a lunchtime business audience in Christchurch that the Government has invited KiwiRail to prepare an application to the Provincial Growth Fund (PGF) 'to get the Northland rail line properly back up and runn

KiwiRail chief executive Greg Miller rejects the notion that the Government's latest $1 billion funding commitment is a taxpayer subsidy.

'KiwiRail has to pay for all its infrastructure so it makes sense to invest in it. But trucks have been subsidised by other road users for a long time.'

Budget 2019 included a major boost for rail funding, with $1b in new money for trains, ferries and regional lines and a cash injection for the Auckland City Rail Link.

* Case to upgrade Northland rail line 'marginal'

* KiwiRail welcomes Northland rail pledge**

While he's now the recipient of a big cheque from Government, it hasn't all been a smooth journey for the KiwiRail boss.

When he was appointed chief executive of KiwiRail, the move raised some eyebrows as he was already the company chairman.

KiwiRail chief executive Greg Miller says rail expansion in Northland will help replicate Bay of Plenty's wealth.

Recruiters got down to a shortlist of four candidates, but supply chain experience was top of the requirements and other board members told Miller to put his hand up for the chief executive job, he said.

Miller was general manager at Toll from 2003 and managing director after 2008, the year prime minister Helen Clark's Labour government bought KiwiRail back.

Toll had been the owner of KiwiRail after it was privatised in 1993 by finance minister Ruth Richardson.

Miller said the trucking sector was under seige with a shortage of drivers, and freight companies have been lobbying for increased rail capacity.

'The money is all capital expenditure and tagged to specific projects. There is $375 million for loco replacement, some of them verging on 60 years old. There are 900 wagons that are also about 50 years old and need to replaced for safety reasons and will provide work for our workshops.'

Another $331m is for signal systems and upgrading technology, tracks, bridges and tunnels, $35m for the two ferries, and $300m earmarked for potential investment through the Provincial Growth Fund.

The main Kaikoura earthquake-related repairs have been completed.

More money is likely to be allocated later this year to upgrade the rail line and tunnels in Northland.

'There's 30,000 containers a year out of Northland going to either Tauranga or Auckland when they could be going through Northport at Whangerei,' Miller said.

Refurbishing carriages for the Hamilton to Auckland passenger rail service is part of a major upgrade.

He can't predict exactly how many jobs the new funding will create, but there will be many inside KiwiRail and 'with our partner contractors'.

The Government has invited KiwiRail to prepare an application to the Provincial Growth Fund 'to get the Northland rail line properly back up and running'.

Geo-technical and engineering investigation into the Marsden Point spur line was complete, and was relatively straight-forward, according to a government report.

Later this year the report will accompany an Upper North Island supply chain study, and Ministry of Transport's plan for rail investment for Government consideration.

Miller said the Northland region and Northport would benefit in the same way Tauranga had benefited from rail line development in the 1970s.

He said electrification would be part of a global revitalisation of rail which made sense for all the environmental and economic benefits.

Miller said the disagreement between the KiwiRail board and the Government in 2018 over electrification of locomotives took place before his time on the board.

'When I came in as chairman it was clear to me that in the long run there had to be an electric component.

'I was comfortable to challenge the previous board decision and support the Government over buying electric rather than diesel locos because it was the right decision.'

A board decision he wholeheartedly supported was choosing to buy new Interislander ferries, with a focus on transporting rail freight rather than trucks.

'We're looking at two large ships with a range of energy systems, a different style of passenger tourism, and hull design.

'The future for us with the Interislanders is at Picton. Port Marlborough is doing good work with us.

'We have to build a linkspan and the port company is working to give us a good land allocation. It would be very hard to resurrect the alternative Clifford Bay proposal. It's seriously big capital and it's not our priority,' he said.

KiwiRail had largely emerged from earthquake rebuilding and freight numbers were recovering, Miller said.

The resurgence of KiwiRail was also evident from staff survey with a major turnaround in engagement and satisfaction, he said.

While KiwiRail still tended to be dominated by men, nearly half of Miller's executive was female, and he had worked on a gender board at Toll.

'We have enormous diversity as more women become drivers and workshop cadets. And we have people from about 63 different ethnic backgrounds,' he said.