For the land transport system to work effectively, we need to ensure all travel options are playing to their strengths. A well-maintained rail network contributes many benefits for people in New Zealand, including reduced congestion and emissions, and improved safety and resilience across the land transport system.
Over the last three years, we’ve been part of the Future of Rail review, led by the Ministry of Transport. In 2021, Government released the New Zealand Rail Plan (the Rail Plan) which sets out the long-term vision for rail.
The Rail Plan outlines the commitment to the significant investment needed to achieve a resilient, reliable and safe rail network. We were involved in the development of the Rail Plan, alongside the Ministry of Transport and KiwiRail.
The Rail Plan sets out two strategic investment priorities for delivering a resilient and reliable rail network:
To support the implementation of the Rail Plan, legislation was passed introducing a new funding and planning framework for the heavy rail track network under the Land Transport Management Act 2003.
The changes mean KiwiRail can receive funding from the National Land Transport Fund (NLTF) for investment in the rail network. KiwiRail owns the rail network and is responsible for managing, operating and maintaining it.
Reflecting the Government’s priorities, the Government Policy Statement on land transport 2021 (GPS) has identified the Rail Plan as one of the four government commitments, and a new Rail Network activity class was created to support implementation of the Rail Plan.
KiwiRail is required to prepare a Rail Network Investment Programme (RNIP) every three years to be eligible for funding from the NLTF. The RNIP must take into account the purpose of the LTMA, as well as the current GPS on land transport. The RNIP sets out the rail network activities that KiwiRail proposes, and that require investment from the NLTF.
The development of the first RNIP has been guided by the GPS 2021 and the NZ Rail Plan.
The Minister of Transport has approved the first RNIP at a total cost of $1.35 billion, with an initial $1.27 billion from the NLTF approved for rail activities contained in the RNIP. This includes:
As required under s22C and s22G of the LTMA, we provided advice to the Minister on the RNIP and recommended that the Minister approve the RNIP, pursuant to s22B of the LTMA and KiwiRail’s request for funding for rail activities pursuant to s22F of the LTMA.
We applied our existing Investment Prioritisation Method to assess the RNIP. The IPM was used for the development of the 2021-24 NLTP, and we adapted it as appropriate for the RNIP.
We engaged an external consultant with heavy rail network expertise to assist with the assessment. The scope of the external review was to cover:
We have assessed the RNIP using a combination of approaches:
For this first RNIP, we have focused on whether the processes and methodologies KiwiRail is using to build its asset management plan and operational decision making are robust. We also helped to ensure alignment of the RNIP with the Wellington and Auckland Regional Land Transport Plans, working with Auckland Transport, Auckland Council and Greater Wellington Regional Council on rail investment, alongside KiwiRail.
The LTMA requires KiwiRail to approve one or more procurement procedures that will apply to the delivery of rail activities and to consult with Waka Kotahi before approving its procurement procedures.
KiwiRail provided us with its procurement procedures that cover outsourced expenditure required to deliver rail activities in the RNIP.
We reviewed the procurement procedures and concluded that they are consistent with the Government Procurement Rules (GPR) and the advice provided by the Ministry of Business, Innovation and Employment (as the government Procurement Functional Leader).