Building a Stronger Upper North Island: The Future of Rail and Freight Connectivity

[Speech to the Upper North Island Strategic Alliance, Whangarei] Good afternoon.

Thank you to our hosts at Whangārei District Council, and to Mayor Ken Couper, Mayor Mahe Drysdale, and Chair Pita Tipene for inviting us to be with you today.

Warm acknowledgments to everyone here today, including Mr Reidy from KiwiRail.

Here we are with the leaders of Northland, Auckland, Waikato and Tauranga. We do have some form in your arena, having represented Hunua, Tauranga and Northland, but who’s counting.

You asked for our views on freight, rail, and how they align with the Upper North Island Strategic Alliance. It just so happens we have views on all three.

New Zealand’s freight system Let’s face facts. New Zealand sits at the end of the global shipping line, just north of the penguins. Scale matters. That is why exporters like Fonterra and Silver Fern Farms created Kotahi, and why our relationships with major shipping lines are so important.

We cannot overstate how essential business and government relationships are with major players like Maersk, CMA and so forth in maintaining our economic connectivity with the rest of the world.

When people ask which ports matter most to New Zealand’s future, we do not hesitate: Tauranga, Northport, Lyttelton and Port Chalmers.

That does not diminish the role of other ports, but when the shipping lines consistently tells us where they want to go—ports with deep water, capable of taking large ships, and simpler operations—at some point we have to listen.

We have endured countless reports calling for another ports strategy. Frankly, it is remarkable how difficult we make something as fundamental as connecting New Zealand to the world.

Mayor Wayne Brown, with his usual forthrightness, showed how to get results with the Ports of Auckland: a $1.1 billion profit share, more waterfront access, higher gate charges, scrapped automation plans, and a port focussed on what it does best—and that includes rail freight.

Likewise, Mayor Mahe Drysdale and Bay of Plenty leaders remain focussed on the long-term growth of Port of Tauranga. Of course, we will leave remarks about the planned asset sale by the regional council to another day.

As a former Member for Tauranga, we know the transformation that port enabled for the Bay of Plenty and New Zealand. It is now New Zealand’s largest port. But could it have happened without rail? No.

The Kaimai Tunnel connected Hamilton to Tauranga and changed the game, avoiding the Karangahake Gorge and speeding up the connection of freight.

Today, almost half of every container at Port of Tauranga moves by rail. Southdown and Ruakura thrive because rail is the conveyor belt keeping freight moving.

The Golden Triangle should in fact be called the Steel Triangle.

Rail also frees road capacity and cuts fuel consumption. Moving the equivalent freight from Auckland to Palmerston North by truck would burn around 14,000 extra litres of fuel on a single trip.

It proves once again that being green is an economic choice—requiring none of the eyerolling, virtue-signalling nonsense seen from some of our opponents in Parliament.

Thankfully, we are in Whangārei, not Parliament.

Rail priorities Rail has a task to serve, and it is doing it.

It would be good to see more leaders acknowledging the work happening at KiwiRail.

Ten years ago, rail was neglected. Today it is succeeding. KiwiRail reported a $73 million half-year profit and remains on track for $160 million this year. Freight volumes are up seven percent, compared with around two percent for road.

So why is rail succeeding?

Because we set a strategy and railway people delivered it.

We changed the law so rail infrastructure is funded more like state highways. Since then, sleeper by sleeper and bridge by bridge, the network has been rebuilt.

This year’s storms caused only two significant washouts nationwide. One per island for a national network is not a bad result.

Budget 2026 includes $1.075 billion for the national network and another $107 million for metropolitan rail renewals.

More than 2,000 new wagons are already in service, with hundreds more being assembled at Hillside Workshop in Dunedin. New shunts are operating in KiwiRail’s freight yards, and the entire South Island locomotive fleet will be replaced next year with state-of-the-art locomotives built in Spain.

KiwiRail will soon have the youngest locomotive fleet of any rail freight company in the world. People need to sit up and see what is in front of them here: rail is back in big way.

Indeed, two new ferries will arrive in 2029 – with rail on them just has been the case for the past 60 years.

In Northland, the North Auckland Line has been comprehensively upgraded. Culverts replaced, embankments rebuilt, tunnels lowered, and standard-weight trains restored.

That work has put the railway in position for Marsden Point.

For the business itself, KiwiRail has finally grappled with its cost competitiveness. It has taken hard decisions to remove inefficient practices, thereby saving costs. Those decisions have a twin objective: offer a cost-competitive rail solution, while contributing to what is most important to freight customers: schedule reliability.

In our office, we have adopted a freight term: ‘Delivered in full on time. This is a well-worn measure that KiwiRail people spend their working days focussed on, as reliability is everything.

The Interislander, for example, is 98 percent reliable. A major advance on recent years.

KiwiRail’s freight services are around 90 percent, often 95 percent for major customers such as Fonterra, and all have markedly improved in recent years.

Part of this is to do with the new assets we bought for them, but much of it comes down to the work on the ground and that is why rail is succeeding.

Because when we give people in this country the tools to succeed, New Zealanders succeed.

And so, we turn to another building block for long-term export success.

Marsden Point Rail Link The Marsden Point Rail Link is needed. It is blindingly obvious that Northport should have the same rail connection enjoyed by every other major port in New Zealand.

The previous Government allocated $410 million before a railway had been designed. KiwiRail was effectively asked to create a brand-new railway while solving every conceivable problem along the way.

It wasn’t enough to just build a railway from Oakleigh to Marsden Point, KiwiRail was also expected to save Northland from extreme sea level rise and build overbridges so a ute can inspect a pole every year or so.

The result was a design costing more than $1 billion, and suddenly the previous Government had nothing much to say about this project.

That is a major fault in how New Zealand does infrastructure. We have ambitions for sainthood when we just need to attend confession.

Governments announce projects, spend years producing business cases, reveal what they are willing to pay, and then act surprised when costs rise.

That is not what we are doing here.

Last year we opened KiwiRail’s design work to the market. Builders and funders reviewed the information, proposed alternatives, and identified opportunities to reduce costs.

This week we announced that Acciona, the Downer-HEB partnership, and Martinus Rail will compete to develop lower-cost options.

And here is the beautiful part: they are competing. They want the construction contracts. We want value for money. And they do not know our budget.

Imagine applying that principle across more infrastructure projects instead of publishing glossy business cases that reveal the number on day one.

This approach means our Government will receive robust cost estimates, actual design data underpinning them, and can proceed to build and fund with far higher confidence than is typically the case for infrastructure.

Conclusion Collectively, your regions represent more than 60 percent of New Zealand. The opportunities are immense, but opportunities not taken count for nothing.

What we need is a focus on basics.

In rail, 66 cents of every dollar goes into maintaining and renewing the network. The Infrastructure Commission says we should spend more than 60 cents. We already do.

The transport system is exactly that: a system. Rail, roads and coastal shipping working together.

An expanded Northport. An expanded Port of Tauranga. A rail connection to Northport. Additional crossing loops around the Kaimai Tunnel. More freight capacity through Auckland. An Avondale–Southdown connection.

Put those together and you create a stronger connection between Auckland, Hamilton, Tauranga and Northland.

And the connector—the ballast for growth—is rail.

A system as old as anything, coming into its own for the future.

We do not shy away from bold ideas. If our record is anything to go by, we deliver them.

Thank you.