The new funding will focus on locally assembled wagons and upgrades to the KiwiRail network

The Government has announced major spending on rail transport in the 2021 Budget, including new train workshops in Dunedin and Christchurch.

The announcement includes $722.7 million to replace older trains and wagons, as well as $449.9 million for track infrastructure, $87.3 million for KiwiRail maintenance and $85 million to develop new rail workshops in Dunedin.

The Dunedin facility will be built at the historic Hillside rail workshops to assemble roughly 1500 wagons for the southern rail network.

Hillside was put up for sale in 2012 under the National government but revived in 2019 by Labour with an investment of $20 million to service KiwiRail trains.

“We’re really excited,” says Dunedin Mayor Aaron Hawkins. “Rail is a critical part of our low-carbon future and it’s great to see this returning to its spiritual home at Hillside.”

However, the plan has already received criticism from the Opposition.

“There’s going to be Meccano lessons to put together presumably Chinese-made products,” says National leader Judith Collins of the Singapore-made parts that will be assembled at Hillside.

“We heard plans about 19th Century technology and no plans for building technology for the future,” she says.

ACT Party leader David Seymour was also no fan of the announcement, describing the rail spending as a “train wreck”.

Aside from the Dunedin facility, the announcement also includes the final funding needed to build the South Island Mechanical Maintenance Hub at Waltham, Christchurch.

The hub will maintain and service trains in KiwiRail’s South Island network and is expected to create around 300 construction jobs.

“I think it’s the dawning of a new reality,” says Wayne Butson, general secretary of the Rail and Maritime Transport Union. “If we want a safe and sustainable rail network for the future then we need to be investing in it now.”

Butson says his union is elated after fighting for decades to have the Hillside facility reestablished. 

The Hillside Workshops were founded in 1901 and were one of Dunedin’s biggest employers with 800 workers at its height in the 1930s.

“Hillside is a major part of Dunedin’s engineering history,” says Hawkins. “It’s great to see that coming back.”

The Government says the new assembly plant will help secure the country’s freight network.

“Instead of buying ready-made wagons from overseas, this new facility will allow us to initially assemble around 1500 wagons locally,” says Minister for State Owned Enterprises David Clark.

However, KiwiRail will still need to purchase around 400 wagons from overseas until the facility is ready to go.

The Government says Hillside will create around 150 new construction jobs and up to 45 operational KiwiRail jobs.

It will also improve KiwiRail’s ability to maintain its southern network, something Butson says has been sorely lacking in recent years.

Overall, the Budget announcement will see $722 million spent on 60 new trains and 1,900 new wagons, including replacements for more than half the mainline freight trains used in the South Island.

The money will also go toward safety upgrades to allow the KiwiRail fleet to enter the Wellington metro area, and upgrades to regional depots like Kawerau and Westport.

Meanwhile, the $449 million in infrastructure spending will go towards upgrades to KiwiRail’s 3,700 km national network.

The Government expects this to create a further 150 new KiwiRail jobs including engineers, track staff, and trainees.

Another $87.3 million is set aside for assets like a new freight ICT system that will include real-time tracking.

The Government is also touting the announcement as part of ongoing work to lower emissions and tackle climate change.

“On average, every tonne of freight moved by rail produces at least 70 percent less carbon emissions compared with heavy road freight,” says Clark.

However, Greenpeace says the announcement doesn’t go far enough to tackle the urgency of the climate crisis.

“The $1.3 billion set aside for improving rail is good news, but the Government is really missing in action when it comes to dealing with New Zealand’s biggest climate polluter – intensive dairying,” says Greenpeace spokesperson Amanda Larsson.

“Winning slowly on climate change is the same as losing.”

The announcement follows other recent rail investments including the re-opening the Wairoa to Napier line and Te Huia – the Waikato to Auckland commuter service.

Ben Leonard writes on Treaty issues and the environment.

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