Budget 2020: New Interislander ferries, more money for rail

Thursday, 14 May 2020

KiwiRail currently employs almost 4000 people.

The Government has set aside $1.2 billion for New Zealand's rail system in Budget 2020, including money to help replace the Cook Strait ferries.

There will be $246 million to invest in the rail network, $421 million for new wagons and locomotives, and $400 million towards replacing the three ageing Interislander ferries and port infrastructure.

The $421 million rolling stock investment included Auckland's European Train Control System, which would provide safer and more reliable services on the Auckland metropolitan rail network.

The funding was announced on Thursday as part of $16 billion of spending announced in Budget 2020 to fight the Coronavirus crash.

The Government will put $400 million towards replacing the ageing Interislander ferries and port infrastructure.

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The money came on top of the Government’s $1 billion investment in Budget 2019, said KiwiRail chief executive Greg Miller.

The capital funding promised for the new Interislanders highlighted how important the ferry connection was to New Zealand, he said.

“Our Cook Strait ferries are an extension of State Highway 1, moving 800,000 passengers and up to $14 billion worth of road and rail freight between the North and South Islands each year.

“They are a must have for NZ Inc. The two new rail-enabled ferries will be more advanced, have significantly lower emissions and last for the next 30 years.

“This is a once-in-a generation investment and I am thankful for the Government’s support. It gives us the security to go out to international tender to build the ships, which we hope to see arriving on our shores in 2024 and 2025.”

The Government wants spending on infrastructure projects to help keep Kiwis in jobs, with a Covid-19 induced recession expected to result in a steep rise in unemployment in coming years.

KiwiRail currently employs almost 4000 people, and its chief executive, Greg Miller, is on an infrastructure industry group reporting to the Government about 'shovel ready' projects.

'Rail is a critical part of our integrated transport network,' said State Owned Enterprises Minister Winston Peters.

'Not only is investment essential to address decades of under-investment, but further investment in rail will play an essential role in our economic recovery post-lockdown.'

'The investment in rail infrastructure is not only helping to secure the thousands of existing jobs at KiwiRail but will be a huge boost to New Zealand's civil engineering and construction sector, with hundreds of contractors, and their material suppliers, needed nationwide for track renewal, mechanical facility upgrades, and ferry terminal projects,' Peters said.

New Zealand needed a resilient and reliable rail system to support freight and get cities moving, and help reduce the country's emissions, said Transport Minister Phil Twyford.

Proposed changes to the Land Transport (Rail) Legislation Bill would allow network investment to be channelled through the National Land Transport Fund (NLTF), Twyford said.

KiwiRail's ability to access a further $148 million in Crown NLTF funding depended on the bill being passed and coming into force. If the bill was not passed, further Crown funding would likely be needed to support the establishment of a reliable and resilient rail network, Treasury noted.