Wellington Scoop

KiwiRail’s incorrect advice about diesel vs electric locomotives


by Roger Blakeley, Bob Norman, Alex Gray, Keith Flinders
KiwiRail says it has received no direction from the Government to cease the de-electrification programme on the North Island main trunk line, and is continuing to decommission the electric locomotives fleet by 31 March. But there are three key issues in KiwiRail’s advice to the Minister of Transport, as reported by Radio NZ , that are not correct:

1. Costs of Diesel v Electric Locomotives.

KiwiRail advised the Minister that they could not afford to buy new electric engines; that it is hard to justify on cost grounds replacing electric locomotives that are near the end of their life with new electric locomotives; and that it is estimated that diesel engines are between 30 and 40 percent cheaper over the course of their lives.

The facts are:

KiwiRail’s current electric locomotives are midlife and not at the end of their useful life as stated by KiwiRail in the briefing to the Minister. As noted by the Rail and Maritime Transport Union (RMTU), the electric fleet locomotives are the second most modern mainline locomotive in KiwiRail’s fleet. Refurbishing the electric locomotives is a valid commercial proposition. KiwiRail’s best locomotive, the DX class diesel-electric locomotive, was introduced in 1972 and received a comprehensive overhaul in 2006 – 34 years after introduction. By comparison the EF class electric locomotive on the North Island Main Trunk is only 32 years old.

The lowest cost option considered by KiwiRail in its ‘Better Business Case’, dated 21 December 2016, was an upgrade of the electronic control system on the electric fleet. This would have cost only $10M. If the electronic control system is upgraded, the electric locomotives’ life would be extended by over 20 years.

While the diesel locomotives have lower capital costs, they have higher operating and maintenance costs, and only half the life of electric locomotives. The ‘whole-of-life’ costs of new electric locomotives are less than new diesel locomotives.

In the KiwiRail December 2016 ‘Better Business Case’, the diesel option was calculated to have a Net Present Value cost range of $204m to $236m (lower and upper bounds), compared to the electric option, which had a range of $242m to $310m.

However, a leaked (early 2017) KiwiRail internal review critiqued the financial modelling that informed the Board paper at the end of 2015. It said that the financial modelling under-represented the cost of the diesel option and over-represented the cost of the electric option. Based on the corrected model, that review assessed the cost of the electric option as $230m cheaper than the diesel option. The final ‘Better Business Case’ appeared to ignore that internal review. It is still being ignored in advice to Ministers in the new Government in March 2018.

2. Reliability and Time performance

KiwiRail advised the Minister that the current locomotive switches from diesel to electric locomotives, and back again, at Te Rapa and Palmerston North affects the reliability and time performance of KiwiRail’s services, and reduces the attractiveness of rail as a freight option compared with road.

The facts are:

The scheduled delays in the ‘Better Business Case’ of 21 December 2016 are for 40 minutes at each location of Te Rapa and Palmerston North. The redacted sections of the ‘Better Business Case’ (leaked to the authors) included four trials in July 2016, which found that the delay for each locomotive change was on average 5 minutes, rather than the 40 minutes scheduled. The average 5-minute delay at both Te Rapa and Palmerston North is negated by the faster speed of electric locomotives on the electrified section of the NIMT, which makes up 10 to 20 minutes. Therefore, the decision to switch from electric locomotives to diesels cannot be justified on time-saving grounds.

3. Greenhouse gas emissions

KiwiRail advised the Minister that a shift from electric to diesel locomotives would provide a more consistent and reliable service for modal shift onto rail: “For every tonne of freight moved by rail there is a 66% carbon emissions saving over heavy road freight”.

The facts are:

The same reliability, efficiency, reduction in travel time, and corresponding mode-share shift would be achieved by new or refurbished electric locomotives or dual-mode locomotives travelling between Auckland and Wellington – see 2 above.

In New Zealand, 80% of electricity production is from renewable resources such as hydro or wind power, with a new government target of 100% renewables by 2035. Consequently, only a small proportion of electricity supply required for an electric locomotive fleet depends on burning fossil fuels.

KiwiRail will burn an extra eight million litres of diesel per year using diesel locomotives on the electrified section of the NIMT. This is in direct conflict with the Government’s target of reducing to net zero carbon emissions by 2050.

Professor Ralph Sims of Massey University said “the rail network would generate 12,000 tones of carbon dioxide per year by de-electrifying – more than cancelling out the 9,000 tones saved by using 3000 electric cars”.

4. Towards Full Electrification of the North Island Main Trunk

A critical issue in this decision is the importance of retaining the long-term capability to fully electrify the North Island main trunk line.

The KiwiRail decision to switch from electric to diesel locomotives involves retaining the electrified infrastructure required for electric trains and keeping the lines maintained, inspected and energised, at an estimated cost of $2m-3m per year. This funding could be at risk from future budget cuts, which could jeopardise any future opportunity to electrify the whole NIMT.

The options of a new electronic control system for the electric fleet, new electric locomotives or dual-mode electric-diesel locomotives would all potentially be part of a long-term transition to a fully electrified NIMT. A first step could be electrification from Papakura to Te Rapa. This would also allow the extension of the EMU commuter service from Auckland to Hamilton.

Dr Roger Blakeley is a former Secretary for the Environment. Bob Norman is a former Commissioner of Works. Alex Gray is a professional civil engineer and Senior Project Manager. Keith Flinders is an Electrical Services Consultant.

Roger Blakeley on Morning Report

Read also:
Kiss of death for electrification


  1. Dave B, 15. May 2018, 14:42

    We wait for the government to intervene here, as it said it would if elected into office. We do not want another hand-washing exercise from Phil Twyford as happened over Wellington’s trolley buses. As Roger Blakeley points out, there are strong reasons to remain committed to the NIMT electrified operation and an urgent first-step is to get those EF locomotives refurbished. This should have been underway 10 years ago. This will stave off the threat to the electrified service and buy us some time until a decision to fill-in the electrification-gap from Hamilton to Papakura can be arrived at.

    Pulling the plug now will jeopardise much that is of value for the future and should not be entertained as an option.

  2. Russell Tregonning, 15. May 2018, 16:49

    This is a national scandal.

    Jacinda Ardern said that climate change is “my generation’s nuclear free moment”. She went on “There will always be those who say it’s too difficult. There will be those who say we are too small, and that pollution and climate change are the price of progress…They are wrong.”

    Our PM & her government — to have any credibility on climate change action — must stop this Kiwirail madness.

  3. Casey, 15. May 2018, 16:52

    “Ah, yes, Dave, but prior to attaining office we were not made fully conversant with the facts and costs concerning the de-electrification of the NIMT. Now that we are aware and considering all the other more important promises we need to fund, this one has to be sacrificed”. PT

    KiwiRail promise to mothball the NIMT electrical installation pending a return to electrification in the future. Just like they mothballed rail line Wairoa to Gisborne that has been neglected and is now in a state that it will be too expensive to reopen even if found to be commercially viable, freight wise, in the future.

  4. Dave B, 15. May 2018, 19:18

    @ Casey: Indeed! But I don’t think PT can argue that there “isn’t the funding” (for overhauling the EFs and retaining the electrification) because this has been demonstrated as a cheaper option than buying new diesels. Phil needs to critically evaluate the stories he is being told. That is his job.

  5. G Mazengarb, 16. May 2018, 12:00

    It has appeared for some time that the senior management and board of KiwiRail go their own way regardless, and that their objectives (whatever they might be – they certainly are far from obvious) are at odds with this government, and in fact more in tune with the previous National Government which appeared to see rail as a bit of a nuisance, really, requiring all this costly funding, and getting in the way rather than complementing their preferred (and heavily lobbied) mode of freight transport, the trucking industry.
    This I find puzzling – like a sort of death-wish. These people are supposed to have vision, and to be good at their jobs. That is why they are paid the “big bucks”. But it doesn’t seem that way to me.
    What does appear obvious to me, is that we have an entrenched culture at the high levels in KiwiRail, which needs a total clean-out if we are ever to get rail ‘back on track’.

  6. Jonny Utzone, 16. May 2018, 13:50

    I don’t think a train timetabler would schedule anything less than 15 minutes for a loco change-over given the distances involved.

    Kiwi rail loses money on rail freight which gets hidden by the Interislander. Diesel or electric? It doesn’t matter since rail’s a financial dog which ever way you look at it. That’s why Toll only kept the road operations.

    NZ simply doesn’t have the freight volume so Government policy is about cheaper trucking. Result? H class truck and trailer units with kinetic envelopes wider than the roads they operate on (SH2 Rimutaka).

    So ‘get in behind’ car driver and wait for a long passing place.

  7. Tom, 16. May 2018, 16:06

    The problem for Kiwirail appears to be that it needs to fund the investment and upkeep of the whole rail asset from revenue generated by operations (with some exceptions such as govt intervention). Road transport does not have this limitation – no road transport provider 100% funds the asset it drives on (again with exceptions such as private roads).

    So, what really needs to happen is that NZTA should be given the rail asset management, and required to fund it from the natioanl land transport fund. That would have the effect of meaning all investment in road would be competing with investment in rail on a more like-for-like basis.

    Then Kiwirail can get on with being an operator and perhaps find a way to make rail more viable as an operation…

  8. Ross Clark, 16. May 2018, 20:11

    Tom – disagree. Trucks pay very substantial road user charges which are dedicated to the maintenance and upkeep of the road network. What trucks do benefit from is that they share the asset, and its funding, with the private motorist. There is a limited case for supporting the rail network from the National Land Transport Fund, where road users could be shown to benefit from it.

    Simply put, rail cannot meet its fixed or infrastructural costs – unlike nearly every other transport mode – because its standard of service and therefore what users are prepared to pay for, is far less than what it costs to provide that asset. Structurally, the economy produces a lot less of the sort of things which are suited to travel by rail, and much of that could go to coastal shipping.

  9. Gillybee, 27. May 2018, 15:59

    “Trucks pay very substantial road user charges which are dedicated to the maintenance and upkeep of the road network.”

    Not nearly enough to pay for the damage done to our roads by trucks and if the real cost of maintaining the roads was transferred to trucking companies, we’d have a more even contest between rail and road. Our roads were mostly built after WW2 from flexible, light pavements. We’ve gradually improved them over the years, but they are still not designed to withstand being pounded to pieces by trucks. Our roading authority spends most of their budget on stitching up the damage – an inefficient and wasteful use of our money and resources.

    “Structurally, the economy produces a lot less of the sort of things which are suited to travel by rail, and much of that could go to coastal shipping”

    Baloney. We need to develop a more effective transfer system to better utilise rail for haulage and trucks for distribution. Fifty years ago we used capsules to transfer goods between rail and Bristol freighters at Rongotai airport with a turnaround time of 13 minutes. To quote Wilhelm Hegel “We learn from history what we do not learn from history.”

  10. Ross Clark, 30. May 2018, 22:23

    Gillybee – In the 2016-17 year, fuel tax provided $1.96bn of revenue to the Land Transport Fund, and Road User Charges, $1.5bn. Licencing provided a further $224m (refer: https://www.nzta.govt.nz/assets/resources/annual-report-nzta/2016-17/nltf-annual-report-2017.pdf).

    Your basis for saying, “Not nearly enough to pay for the damage done to our roads by trucks”, is what, then?

    Seriously – about twenty years ago, I worked for TranzRail as-was, at a time when the clear aim from the management was to shift all the freight they could onto rail. Instead, they ended up being the second-biggest trucking company in the country. If there was an easy fix for the problems you are outlining, we’d have found it by now.