Boosting Economy and Connectivity: Celebrating Rail Infrastructure Milestones in Otago

Good morning.

Port Otago directors, management and workers, thank you for hosting us here today.

It is good to share this milestone with you and your Southern Link Logistics Park partners Dynes Transport and also KiwiRail.

Dunedin Mayor Jules Radich, local and regional councillors, Dunedin Railways, and other community members, thank you for joining us on this occasion.

Companies involved in building this infrastructure, including Martinus, SouthRoads, WSP, KiwiRail, and Octa Associates, thank you and well done.

The Honourable Shane Jones, Minister for Regional Development, thank you for outlining the Government’s economic investments in Otago and the fast-track consenting steps, and the Honourable Mark Patterson, Minister for Rural Communities, thank you for your ongoing advocacy for the Otago region.

Now, as the Minister for Rail – and the word for is deliberate in that job title – it is a pleasure to join you today for this event.

This opening is part of a time-honoured tradition in a region that has always known how to grow its economy.

This is the region of Sir Julius Vogel, a visionary leader who opened New Zealand’s hinterland by rail to exporting ports and connected communities to each other by rail.

Vogel built more railways in ten years than New Zealand did in the entire 130 years that followed.

Growth and productivity don’t happen by chance, they happen by an unrepentant and unapologetic commitment to New Zealand’s unfinished business.

Our unfinished business is God’s own country – plentiful, energy secure, industrious, jobs-rich and where all young people are on the education and employment escalator, and where all people have pride in their community.

When we invest in ourselves, when we build our resources, and back one another to sell our wares to the world; we put ourselves at the top of the pack of nations that create wealth – just like Ireland, just like Singapore, just like New Zealand when we were number one in the world.

We have done it before, and we can do it again.

The new rail siding in Port Chalmers is yet another example of private companies investing in their future.

Synlait, in Canterbury, funded a siding into their distribution centre some years ago. They connected their operations directly into the rail network.

Coca-Cola, in Auckland, funded a doubling of its rail sidings to service its distribution across New Zealand.

Fonterra, nationwide, and representing a quarter of New Zealand’s exports in dollar terms, chooses rail time after time because rail is the best mode for moving bulk goods long distances.

The fact is, in business, if you don’t know how to get your goods to market in the most efficient manner, then you don’t know how to be in business.

For far too long, rail was under-appreciated in New Zealand.

It wasn’t the fault of the customer – as you know, the customer is always right.

It was the fault of decades of underinvestment in our rail infrastructure since the 1990s.

We said it then, when a National Government was selling the railways on deeply inappropriate terms, and the Labour Party meekly said ‘the timing isn’t right’ – not that selling was against our economic interests, or that the deal stunk to the high heavens, but that the ‘timing was not right.’ But here we are, decades later, finally putting right to an economic wrong.

We have a positive vision for rail, and time and time again we have delivered the goods.

We changed the law to fund rail like we fund roads, creating a three-yearly programme of infrastructure works to maintain and renew rail assets sleeper by sleeper, rail by rail, bridge by bridge, up and down this country.

We established a programme of commercial investments to replenish KiwiRail’s freight assets. This includes: New locomotives, including replacing the entire South Island fleet with state-of-the art low emission, double-cab, heavy hauling DM locomotives – most arriving next year.

New wagons, including up to 1,500 being assembled right here in Dunedin at the entirely rebuilt Hillside Workshops to do that job and many more to come.

New ferries, not once but twice. We set that cost-effective, no-nonsense ferry replacement programme up in 2020 for rail ferries, and we had to do it again this year after the previous Government went away with the fairies, so to speak. And in a few weeks we will detail our solution and you will see we have saved the taxpayer more than $2 billion.

And unlike others who are fast on the lip but slow on the hip, we deliver.

On Tuesday, KiwiRail reported its annual result.

The company achieved a $111.2 million operating profit.

That was ahead of target, and achieved in a challenging trading year for freight companies across the country.

KiwiRail is tightening its costs, with $34 million in direct savings achieved that year as well as $40 million in productivity savings.

Now is the time to tighten costs, so that pricing can become more competitive and rail freight can position itself strongly for the upturn.

And for those in the media who said we cannot turn rail into a thriving commercial business – just watch us, and look at the facts of that result: we already are.

There is good reason to outline these investments to an audience like this – wharfies who work here and business leaders who operate in this region.

That reason is this: we invest in rail, because rail backs our economy.

When we, the Government, lays down a track that can be relied upon by business, as we have for decades with roads and at long last as we finally do again with rail, business responds by investing in rail.

The services are competitive, commercially funded, and track user charges must be paid just like road user charges, but the rail network can be relied upon like the road network.

This $13.5 million investment for this rail siding involves zero tax or ratepayer funding.

And yet Port Otago invited us, representatives of the Government, to open the siding because the companies based this investment on our reformed rail system.

A rail siding which will serve more than 60% of all container traffic through this terminal – a high proportion compared to many ports.

This will grow higher when the road and rail freight hub in Mosgiel is built.

That programme is a major undertaking by companies based here in Otago.

The Regional Infrastructure Fund has committed $8.2 million as a contribution to building a three-track rail siding into that freight hub, while all the rest of the investment including container marshalling yards, buildings, concrete hard stands and equipment fall to those companies.

Our job is to be an enabler of growth as Shane Jones has proven with our investment, not handwringers whose busiest activity is dreaming up reasons to say no to industry.

We are talking about scalable storage capacity in Mosgiel, the type of infrastructure that means container flows here at the port can grow and with it the regional economy.

The Port Otago rail siding already supports 60 percent of all containers transported through the terminal, taking 43,000 truck trips off Dunedin’s roads last year with a further 19,000 to come when the Mosgiel inland port is in operation – easing congestion, lowering road maintenance costs, and making use of our rail assets.

Inland freight hubs that serve coastal ports is a globally proven model, like Hamilton for Tauranga and Rolleston for Christchurch, and they are seen in every major city in New Zealand except one: Dunedin.

But this siding brings good news: the freight trains are coming to Dunedin.

Now let’s make way for those trains by officially launching the Port Otago railpad.

Could the senior representatives and Ministers join us here as we hold the rail signal in the air.

Thank you