Kiwirail’s future as a commercial state-owned enterprise (SOE) may be numbered in the wake of the impact of the Covid pandemic, a government document suggests. Ministers have asked the Treasury and the Ministry of Transport to consider Kiwirail’s “entity form”, a briefing paper released by Treasury on Tuesday Dec 15 2020 stated.

The report states “Public benefit expectations and public funding of KiwiRail are increasing and so the SOE Act may not provide sufficient levers to achieve ministers’ ownership objectives for KiwiRail,” the department advised.

Treasury said it wanted to engage with ministers about its objectives and priorities for Kiwirail, “including its corporate form.”

KiwiRail Chairman Brian Corban reminded us that it was its own government department, as New Zealand Government Railways, and under direct ministerial control for more than 100 years, until it was “corporatised” in 1982.

CEAC supports rail as it has the best way to lower the climate emissions (see report below) and make our roads safer and far less expensive to maintain.

Kiwirail holds vital important evidence called “The value of rail in NZ” produced by Ernest Young (EY) as an economic study proving rail is vital for our future protection of our economy and public safety and importantly section 4.4 ‘Emissions benefits’.

“The total emission cost figure represents avoided costs from transporting freight and passengers by rail and hence for this study it also represents the value of emission benefits. The estimated extra avoided cost (therefore benefits) of emissions created from moving Auckland and Wellington rail passengers and rail freight to road is $9.27m to $8.45m. This is a net figure and the emission savings arising from discontinued use of freight trains locomotives have been subtracted from the gross total. A modest proportion of the emission benefits is from the transfer of passenger services from road to rail with the largest amount of this net extra avoided cost arising from rail freight. $9.33m to $8.49m. “

CEAC encourages Ministry of Transport, Government, & Treasury, to consider the report called “The value of rail in NZ” and to take our public railway back under New Zealand Government Railways, and place it back under ‘direct ministerial control’ again as it was for more than 100 years, until it was “corporatised” in 1982 and failed by a lack of maintenance of the asset.

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