Outrageous KiwiRail scandal!

By   /   May 13, 2017  /   14 Comments

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5 immediate questions that need to be asked here are:

This is about as bad as it gets in terms of short sighted bullshit thinking by captured Wellington Bureaucrats…

Leaked documents reveal serious concerns about KiwiRail’s decision to switch from electric trains to diesel

Leaked documents throw into question a controversial decision to dump electric trains for diesel locomotives between Hamilton and Palmerston North.

KiwiRail announced the decision last year, and said diesel would improve reliability and efficiency.

But an external peer review by engineering consultants WorleyParsons warns diesel trains bought from China have “a very high failure rate”.

Seven to nine are out of service at any one time for maintenance, repair and asbestos removal. And their performance has been “extraordinarily poor”.

The review said KiwiRail should be switching its whole fleet to electric, but it said a paper from the company’s board was “biased towards the diesel option”.

And there are more concerns from a separate internal report, which says KiwiRail over-inflated expected savings – and upgrading electric trains was actually $230m cheaper than replacing them with diesel.

They warned KiwiRail “provided no basis for its cost estimate” that electrifying the whole main trunk line could be up to $1bn.

The electric trains will be phased out in the next two years. But Transport Minister Simon Bridges says the whole line could be electrified in the future.

“There is an avenue down the line for different decisions to be made … we can revisit this in due course – if we decide that’s the right thing to do,” he said.

…for Christ’s sake folks, look at your high vegetable costs, the massive rain fall, the extreme weather – climate change is here right now. Making our Trains electric is the future and has to be the future. Buying junk Chinese diesel trains that are dangerous to the workers who must use them while gutting our own trained manufacturers is so far away from where we need to be it’s a fucking scandal.

So what the hell is driving this?

Who is getting paid? We know the National Government have many powerful MPs who are personally connected via wealthy private business relationships with China, so who is getting a slice of this counter-productive bullshit?

5 immediate questions that need to be asked here are:

1: Which National Party MP stands to win something in this?

2: In the report there was the claim that KiwiRail were “biased towards the diesel option”. What does that mean exactly? How were they biased? In what way?

3: Seeing as the astounding suggestion here is that replacing the fleet with electric trains would actually save $230million rather than the diesel option?????? There must be an immediate halt by Minister Simon Bridges on this project because such a difference in costs demands immediate investigation.

4: The impact of asbestos on worker health needs an immediate review and if there is any question of contamination the deal must be called off.

5: There needs to be an explanation of the thinking by the company that they arrived at such a counter-productive policy.

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  1. Siobhan says:

    Where are we on the Corruption Perceptions Index again??
    But its not just financial corruption, it’s ideological.

    Mr Chomsky, again, on Obama and “the Project’

    “Just to make it more surreal, while this option was being avoided, the Obama administration was sending its transportation secretary to Spain to get contracts for developing high-speed rail for the United States, which could have been done right in the Rust Belt, which is being closed down. There are no economic reasons why this can’t happen. These are class reasons, and reflect the lack of popular political mobilization. Things like this continue.”


  2. Neil says:

    Oh it can’t be true, because it’s not in the NZ Herald.
    Surely such a newsworthy scandal would be reported by the country’s largest newspaper, right?

  3. Jack Ramaka says:

    Amazing we are reverting back to 3rd world rail technology ?

    I wonder if these people have ever been to Japan or Spain and seen their railways in operation ?

    Our ex Leader John Key and Fay Richwhite were heavily invested in the NZ Rail Industry at one stage, I am not sure why they didn’t follow through and develop our rail network. It just got trashed and now we are buying the railway equivalent of old Skoda’s or Lada cars ?

    • …and Fay Richwhite were heavily invested in the NZ Rail Industry at one stage, I am not sure why they didn’t follow through and develop our rail network.

      Fay & Richwhite invested in NZ Rail through Midavia Rail Investments in October 1990.

      Their investment was speculative and asset-stripped the company*, later selling their shares for millions. After an (alleged) insider trading case was brought against the pair, Fay and Richwhite settled with the Securities Commission for $20 million, though not admitting any liability. (Because people often pay $20 million for no good reason, because of “lack of liability…)

      Ref: http://www.stuff.co.nz/business/161039/Richwhite-and-Fay-make-big-rail-profit

      Ref: https://en.wikipedia.org/wiki/Tranz_Rail#New_Zealand_Rail

      (* The reason the Ganz-Mavag trains were always breaking down was that – according to sources who spoke to me – Fay & Richwhite had sold valuable spare parts as scrap metal. This boosted NZ Rail’s profit for that year and boosted the value of their shares. Which they later sold. Unfortunately, the Hungarian Ganz-Mavag no longer operated and spare parts were hard to locate.)

  4. CLEANGREEN says:

    Yes Jack we ae sleepwalking back to the 1900th century with Bull-dust English and Tar-seal Joyce on the job of land transport.

    Likely with this reckless mob we will see next a return to the dog sled and ox cart.

    Clearly they intend to honour the Treasury model of reducing rail to an inner city commuter service for locals.

    That will run against their dream of opening the “infrastructure” to tourism and they will then need to supply bikes to them as the roads will be owned and run only by trucking.

    National = a regressive backward step in our quality of life and public health.

  5. David Benton says:

    Its just a simple case of short term thinking , a trademark of the current govt.
    The Electric locomotives option is $ 230 million cheaper over a period of 30 years. The cheapest short term solution is to go Diesel. Kiwirail , been on a starvation budget, probably has no option but to take the cheapest option in the short term.

  6. kejomu says:

    As I understand it . Two reasons against electrics;
    A: Regular use prevents oxidization of the [expensive] overhead lines. 15 to 20 trains per day is not enough to prevent this happening.
    B: Partial electrification means that investment in extra diesel locos is needed to run over the gaps, plus the cost of switching locos on every train.
    The answer to A; is to put more on rail to start with and get a more economic life from the overhead system.
    and B; The North Island Main Trunk electric system needs to be completed for fully economic use of the system.
    A sensible and rational government would be looking at options that best benefit our country . Unfortunately these kids are probably too busy playing with their business portfolios.

  7. Mike in Auckland says:

    Would you believe any of these persons would vote Greens or Labour?

    There may lie your answer, National loves highways, motorways and private road transport operators, who also vote for them.

    More looking after your mates by National, nothing else, and Kiwi Rail know what the government expects, so they follow their priorities, according to their understanding of the present market demands, whether it makes sense longer term is another matter.

    • Mike, I wonder how many people are getting totally exasperated with the constant roadworks and endless kilometres of those effing bloody road cones!? When they were doing the “smart motorway” (hah!!) into Wellington, there were often road cones and lit-arrow trucks pointing to merged lanes even for no apparent reason; no work taking place; no workers; nothing.

      People must be getting sick of constant road works by now…

  8. Geoff says:

    I don’t think it’s the scandal claimed, it’s just that so many pro-retaining the electric locomotive people don’t really understand the economics involved of operating an isolated electrified section. The common mistake is that folk keeping comparing electric and diesel on a one for one basis, as they would do when comparing the merits of an electric car with that of a petrol or diesel one.

    Suppose you decided to go electric, and buy an electric car to replace your petrol car. But, you are only allowed to use the electric car on one road, between two points which are neither your origin nor destination. I.e., you must first use a petrol car to get a third of the way to your destination, then you can use your electric car for the next third, then another petrol car for the last leg. The trade off for buying an electric car, is that you must also have two petrol cars, i.e., three vehicles to complete your trip. You would of course reject the electric vehicle option, because being able to use them only for a particular length of road on one particular route, would make the option woefully uneconomic.

    The North Island Main Trunk upgrade of 1980-1988 was a two-component project. The first component was to make the line faster by improving the infrastructure (deviations, curve easements, new track, etc). This component delivered as promised, and continues to do so today and into the future.

    The second component, was to reduce the national fuel bill which was expected to vastly increase in price due to the 1970s oil shock. Electric was seen as likely to be cheaper as oil prices spiraled upward. This component did not deliver, as the oil shock ended and from day 1 of electric operations through to today, the electric locomotives have been uneconomic.

    KiwiRail is keeping the economic component, and ditching the uneconomic component. It is keeping the uneconomic one in mothballs in case it becomes economic in future.

    • Mike in Auckland says:

      Quoted from that report mentioned above:

      “And there are more concerns from a separate internal report, which says KiwiRail over-inflated expected savings – and upgrading electric trains was actually $230m cheaper than replacing them with diesel.
      And Treasury also had concerns. Cabinet advice given to the Green Party under the Official Information Act shows officials weren’t convinced by the business case.

      They warned KiwiRail “provided no basis for its cost estimate” that electrifying the whole main trunk line could be up to $1bn.”

      Does that not raise questions, whether the advice Kiwi Rail obtained was reliable and accurate?

      So when their “business case” is flawed, then the alternative option may not be as uneconomical as they try to make out, that is the crux of the matter of this discussion.

  9. doc says:

    Hey that’s not judy collins in the engine drivers seat is it ?

  10. Helena says:

    When your largest creditor is China, you do what the boss wants!
    (Otherwise a robot may just take your place.
    When it’s in the news it’s already been done. I hear through the grapevine that little armies have already been created. What a world, eh!

  11. Strypey says:

    Would it be possible to OIA the report that was biased toward the diesel option? I guess that would depend on whether State-Owned Enterprises are subject to the OIA? Perhaps its time the next government did a major reform of the whole QUANGO (Quasti-Autonomous Non-Governmental Organisation) situation with SOEs, reversing the corporatization of all those government departments, and turning every SOE into POI (Public Owned Infrastructure).