Freight Rail, Passenger Rail

Rail saves NZ $1.3bn per year: Report

By taking cars and trucks off New Zealand’s roads, the country’s rail network delivers approximately $1.3 billion a year in “hidden benefits”, according to a study commissioned by KiwiRail and the New Zealand Transport Agency.

The research, carried out by Ernst & Young (EY), explored the indirect positive impacts of rail on New Zealand’s economy and environment, such as mitigating road congestion, reducing greenhouse gas emissions and easing the levels of spending required on road maintenance.

“These benefits do not show up on the balance sheet, but they are very real, and they make a huge contribution to New Zealand,” KiwiRail chairman Trevor Jones said.

“They need to be considered when choices are made about the transport options available, and how to allocate resources.”

The EY study used an approach which modelled the hypothetical impacts that, on average, would have occurred had the rail network not existed.

Without rail, the study shows, an additional 100,000 daily car trips would have taken place every year on New Zealand’s roads, including 76 million light vehicle hours and 11 million heavy vehicle hours.

Moreover, 488,000 tonnes of carbon emissions are cut by rail use, according to the study, while an estimated 271 road deaths are avoided each year.

“The numbers produced reflect the value of rail at a point in time. We will continue to refresh the data with our transport stakeholders, ensuring we are reflecting the changing nature of rail in New Zealand,” Jones said.

“There are further benefits which are not quantified in this report such as the economic benefits rail brings to the regions through network resilience, land use and value uplifts, together with benefits from its tourism and freight businesses.”

According to Phil Twyford, the minister of housing and urban development, EY’s research bolsters the new Labor-led coalition government’s resolve to increase rail investment in New Zealand’s cities and regions.

“For too long, rail has been on life support – starved of government funding. The Labour-led government will restore balance to transport funding, boosting investment in rail infrastructure both for passengers and freight,” Twyford said.

“This will include significant investment in regional rail via the Regional Development Fund, as set out in the Labour-New Zealand First coalition agreement.

The minister also questioned why the study, commissioned in 2016, wasn’t released by the previous government, and said that the National Party appeared to want to downplay the benefits of rail.

“National’s ideological bias against rail, in favour of low-value projects like their $2b East-West Link plan, has cost New Zealand through congestion, pollution, road damage, and traffic accidents. The Labour-led government will not repeat that mistake,” he said.