KiwiRail plans to ditch electric freight trains – the Govt disagrees

by Rebecca Macfie / 22 December, 2017

Photo/Getty Images

KiwiRail has long been looking at replacing the electric machines with diesel locomotives.

Running through the rugged centre of the North Island, 412km of overhead wires deliver power to the electric trains that ply the most arduous section of the main trunk railway. Cited by state-owned KiwiRail as one of the most significant engineering feats in New Zealand’s rail history, the project to electrify part of the North Island main trunk required major earthworks to realign the corridor, the strengthening of bridges and the enlargement of tunnels to make room for poles and cables.

It was one of a cluster of “Think Big” projects initiated by the National Government of Rob Muldoon. By the time the job was finished, under Labour in June 1988, it had cost $250 million – two and a half times more than expected. But it enabled powerful electric locomotives to haul bigger trains more quickly through the tough central North Island terrain. The electric engines ran on home-grown energy rather than imported diesel and, thanks to the wonders of regenerative braking, topped up their fuel supply on the downhill stretches.

Like the legacy of big hydro dams that underpin New Zealand’s largely renewable power supply, the electric infrastructure running through a significant section of the nation’s main railway corridor seems like a gift from the past to today’s leaders who have the task of cutting greenhouse-gas emissions to zero over coming decades. Electrification of transport, after all, is seen as critical to weaning economies all over the world away from carbon-spewing fossil fuels.

But the 22 locomotives designed and built in the UK to travel the electrified section of the North Island line between Te Rapa (near Hamilton) and Palmerston North are now 30 years old. Sixteen remain in the fleet, but KiwiRail says they are now unreliable and break down too often.

Since at least as far back as 2014, KiwiRail has been looking at replacing the electric machines with diesel locomotives. The board of the state-owned enterprise finally made its decision a year ago, announcing they would be phased out over two years and replaced with an entirely diesel-powered fleet.

At a time when countries ranging from Azerbaijan to Israel are investing in the electrification of their rail systems – and in the wake of the successful electrification of commuter rail in Auckland and Wellington – KiwiRail’s decision has been derided by critics for increasing dependence on fossil fuels. From the other side of the world, the head of the UK’s Committee on Climate Change, Lord Deben, called the move “barmy”. The Green Party has protested loudly against it. Before the election, the Labour Party wrote to KiwiRail telling the company that, if elected, it would order the de-electrification to be halted. The union representing rail workers, the RMTU, has attacked the shift to “dirty diesel” as a “backward step that endangers our children”.

Some within KiwiRail’s ranks have vented their fury at the board’s decision by leaking a deluge of confidential documents that they say show the move is driven by narrow commercial considerations, and that the company is exaggerating the problems involved in running a line that requires the locomotives to be switched at either end of the electrified section.

Peter Reidy: “early lines of communication” with the new Government have been positive. Photo/Simon Young

Peter Reidy: “early lines of communication” with the new Government have been positive. Photo/Simon Young

Despite the controversy, the company has firmly defended its decision on commercial, safety and environmental grounds. It claims the fact that the electrified infrastructure runs only between Te Rapa and Palmerston North means it has to effectively run a “railway within a railway”. A freight train from Auckland to Wellington starts out with a diesel locomotive, which is swapped for an electric at Te Rapa, and changed back to a diesel at Palmerston North.

KiwiRail chief executive Peter Reidy says this is cumbersome and inefficient and adds delay and risk on a time-sensitive freight route. The company says the changeover adds a scheduled 40 minutes at each junction, and that electric locos spend 10 hours out of every 24 sitting idle while waiting for assignment. It says having to maintain a mixed fleet adds cost and complexity, and is inconsistent with the company’s overall strategy of standardising and simplifying the business.

By running an all-diesel line, it says it can provide more reliable services, which big customers such as Mainfreight and Toll Holdings have been asking for. That means it can attract freight off trucks and onto rail on the key Auckland-Christchurch route, which is forecast by the Ministry of Transport to grow by 85% in the next 30 years.

Ditching the electrics in favour of diesels would increase the fleet’s carbon-dioxide emissions by 10%. But KiwiRail argues that even diesel-powered trains produce much lower emissions than trucks: every tonne of freight moved onto rail from roads saves 66% in greenhouse-gas emissions, it says. Therefore, it reasons, the best way it can help the environment is by offering a more competitive service and getting more big trucks off the roads.

Not so slow

But these arguments have been called into question by the contents of the leaked documents. For instance, time trials done by the company in 2016 show it takes only about 12 minutes to change the locomotives at Te Rapa and 10 minutes at Palmerston North – a total of 22 minutes for the whole journey, or about a quarter of the time cited by KiwiRail. The time-trial report described the changeovers as “surprisingly quick” and “reasonably straightforward”.

And given that the new diesels would be the same type of locomotives that KiwiRail has been buying since 2010, the promised efficiency improvements are also open to doubt. The so-called DL machines, manufactured by Chinese company CRRC, have badly underperformed, with a mean distance between failure (MDBF) – the standard measure of reliability – averaging 42,200km over the six months to July, compared with a target of 80,000km.

That’s not a lot better than the 30-year-old electrics, which did 37,600km between failures over the same period. However, Reidy says the performance of the DL machines has been improving and the latest generation have an MDBF of 176,200km.

In a 2015 interim peer review of KiwiRail’s decision-making approach on the future of the electric trains, international transport consultants WorleyParsons described the roll-out of the DL machines as “extraordinarily poor”. It said it was “remarkable that additional DL locomotives could be recommended as the solution to a locomotive reliability problem without first recognising this state of affairs, and secondly, conclusively demonstrating that all problems, currently and potentially arising, have been identified and satisfactorily managed”.

WorleyParsons noted that even the existing 30-year-old electric trains were more powerful and capable of going faster (up to 110km/h) than the DLs (100km/h). And it said three-quarters of the electric-train failures were caused by the control system, which could be fixed with an upgrade. However, KiwiRail board papers show this option was ruled out because, although cheap, it would take four to five years and didn’t meet the overall strategy of standardising the fleet.

The leak of the WorleyParsons paper in May further fanned criticism of the decision to de-electrify. But Reidy says KiwiRail continued to work with the consultants after its 2015 report. At the end of an “exhaustive process”, both parties endorsed the final decision and methodology on moving to an all-diesel fleet. WorleyParsons has not responded to the Listener’s requests for confirmation of this, and Reidy says no final report was written.

Julie Anne Genter: funding changes coming. Photo/Simon Young

Julie Anne Genter: funding changes coming. Photo/Simon Young

Cheaper in the long run

Julie Anne Genter is not buying KiwiRail’s reasoning for the de-electrification move. As the Green Party’s transport spokesperson, she was a strong opponent of the decision, and now as Associate Transport Minister, she remains so. She says the decision was a product of “short-term thinking”.

KiwiRail’s arguments might make sense “if you are looking at it in the next 5-10 years”, she says. “But we have to achieve net zero carbon emissions by 2050. We already have [part of] the electric overhead infrastructure. It’s going to be much cheaper and more efficient in the long term to retain it and extend it … than replace the trains with diesels for 20 years, and then have to plan for how to electrify it all by 2050.”

She says there are other solutions to KiwiRail’s “railway within a railway” problem, including dual-mode locomotives that can both use the electric overhead line and run on diesel. KiwiRail has disputed that dual modes are available which could work on the route, but railway consultant Randall Prestidge says big manufacturers such as Siemens are starting to make them, and a number of international railways see them as a cost-effective way of making the transition to electrification.

Genter says rather than mothballing 30-year-old electrical infrastructure, which KiwiRail has promised to leave in place at a cost of $2-3 million a year, with a low current running to prevent vandalism, New Zealand should be filling the gaps that were not electrified as part of the original project.

“The parts of the network that are not electrified are quite small at this point, and we already have a commitment [from the previous Government] to extend the Auckland commuter network electrification south as far as Pukekohe. So it makes a lot of sense to just complete the electrification.”

KiwiRail has given no serious consideration to electrifying the whole route, which Reidy says would cost more than $1 billion. Why not? Because as a business obliged to operate commercially, he says KiwiRail wouldn’t earn a single dollar more from its customers from an all-electric line than a diesel line.

The company is also expected to fund capital investment out of earnings – something it has proved unable to do year after year, having to rely on short-term Budget top-ups from the Government of about $200 million a year over the past decade.

But Genter says the new Government will overhaul how transport infrastructure is paid for, and wants “a more integrated approach to funding and economic evaluation of transport projects, and that should include capital investment in KiwiRail, or in the rail infrastructure, and even the rolling stock should be eligible for that”.

Under a new funding model, she foresees not only completing the electrification of the main trunk, but also the “Golden Triangle” connecting Hamilton, Tauranga and Auckland. She says she has been told by a senior KiwiRail executive this would cost $2 billion, including a new fleet of 65 electric locomotives. The Listener has been told by a senior rail insider the figure is closer to $3.5 billion if the Northland line is included.

It sounds expensive. However, Genter says we need to compare it with what has been spent on roads. “When you think of the Waikato expressway by itself – a bypass of Hamilton that hasn’t substantially improved journeys – it was more than $2 billion. So it seems eminently justifiable because [electrifying rail] doesn’t just benefit the people using the rail network, it benefits people using the road network as well.”

But would $3 billion-plus worth of electrification deliver the best bang for New Zealand’s carbon-reduction buck? Given that KiwiRail produces only 0.2% of New Zealand’s emissions, doesn’t it make more sense to do what’s possible in the short term to get as many trucks as possible off the road?

And as the Productivity Commission notes in its current discussion paper on how New Zealand can move to a low-emissions economy, shifting freight from road to rail is a relatively low-cost way of reducing emissions, but the cost of electrifying rail is high.

Letter’s in the post

Five weeks into the life of the new Government, KiwiRail’s de-electrification decision remains a hot topic yet to be confronted; formal meetings and briefings are still to be had. Reidy says nothing has changed in its planning since before the election. But he has, in effect, four new bosses – three ministers of transport, namely senior minister Phil Twyford and two associates in Genter and New Zealand First’s Shane Jones, as well as SOE Minister Winston Peters.

“Early lines of communication have been positive,” Reidy says. “Obviously, this is a Government that strongly backs rail and has a positive view of the contribution we can make.”

But that pre-election letter from Labour, warning that it would order the company to backtrack on a hard-fought and divisive decision to de-electrify the company’s key freight route, is in Reidy’s inbox.

Says Twyford: “We made it pretty clear what our view was.”  

This article was first published in the December 9, 2017 issue of the New Zealand Listener.

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