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New Locomotives For Kiwirail

Fuseworks Media
Fuseworks Media

Wellington, March 2 NZPA - The Government is spending $115 million to buy the first new rail locomotives in 20 years and new carriages for tourist trains.

But in approving investment a private sector operator baulked at, Infrastructure Minister Bill English is not up for "fairyland" spending of more than $3 billion he said was envisaged by the last government.

"The previous government had made undertakings up to $1.5b of investment over the next four to five years, plus all the undertakings for suburban rail take us up to over about $3b," Mr English said on Radio New Zealand.

"Rail needs a good going over to make sure a deal that was done in a different world, which was far too generous, is one that we can meet now," he said.

The purchase of 20 locomotives for $75 million from China got the thumbs up from Rail and Maritime Transport Union general secretary Wayne Butson even though jobs would have been created if they had been assembled from parts in New Zealand. They can be delivered faster from China.

Toll Holdings, the Australian company which sold rail back to the Government for $690m, did not invest in new locomotives.

"Last time we got new locos was under Muldoon," Mr Butson said.

"Locos and wagons are the two things we need at the moment. The track is being done progressively."

The key feature of the new locomotives is that they are double-ended. Many trains have two locomotives because there is no turning facilities at their destination.

The new locomotives are expected to run on the busy coal, milk and Bay of Plenty routes for key customers Fonterra, Port of Tauranga and Solid Energy.

"This is all new gear, much more versatile with better cab conditions," Mr Butson said.

He said union representatives on a team assessing the locomotives had been sceptical of the Chinese locomotives but had came back happy.

The first 10 locomotives are expected to arrive in April 2010 with the remaining 10 coming in August 2010.

The spending announced today also included $39.9m for new carriages for TranzScenic passenger routes.

The work will be completed by KiwiRail's Hillside Engineering workshop in Dunedin and will begin in January next year, maintaining workshop jobs and providing work for hundreds of other suppliers.

The new carriages are being paid for out of an existing appropriation.

KiwiRail will borrow the $75m for the new locomotives.

KiwiRail has 149 locomotives and the youngest is 20 years old.

The average age of the wagons is between 25 and 30 years and most have an axle load of 14 tonnes, according to a briefing to the incoming government.

KiwiRail said in that briefing that $14 billion has been spent on state highways since rail was privatised in 1993.

The document detailed $2b of necessary investment as KiwiRail sees it.

It broke down to $700m on so-called above rail assets, including locomotives, wagons and ferries, and $1.363b of investment in so-called below rail, essentially the network itself.

A National Infrastructure Unit being set up within Treasury aims to ensure that the Government's infrastructure programme is strategically sound and helps build a more competitive, more productive economy.

The unit will be drawn largely from Treasury staff and resources and staff seconded from other departments.

The Government has written off $248m on the investment in rail in its latest accounts.

The accounts show that KiwiRail made a loss of $4m in the six months to December 31 on turnover of $332m.

NZPA WGT pjg nb

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