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  • Andrew von Dadelszen

Report on $100m new Te Huia rail passenger service casts doubts on viability

Source: NZ Herald, 20 Feb 2022

Hamilton-Auckland passenger rail service Te Huia continues to use an "extravagant" amount of taxpayer funding to do the job and is not achieving any of the financial environmental goals it was intended to, says a new analysis. Hamilton-Auckland passenger rail service Te Huia continues to use an "extravagant" amount of taxpayer funding to do the job and is not achieving any of the financial environmental goals it was intended to, says a new analysis.


"Even when ignoring the $68.7m of capital expenditure to date, the project continues to use an excessive amount of government funding in order to carry out its operations, an extravagant amount when compared with the costs of alternative modes of transport." The service, which is being run by the Waikato Regional Council on a five-year trial, had a total subsidy budget for the next three years of $23.3m.


The report found commuter (during the week) trips averaged 30 passengers per journey for a 20% load factor. Weekend trips averaged 146 passengers per journey for a 74%

load factor.


A report commissioned by the Waikato Chamber of Commerce on the viability of the service, introduced last year with $85.8 million funding from NZ Transport Agency and $12.2m from Waikato local government, concludes if this year continues the trend of modest patronage, the project's future viability "should come up for extensive debate".


The study, by final year Waikato University school of management student and chamber intern Nicholas Farrell, found that per trip from Hamilton to Auckland, the cost of travelling by diesel vehicle was $48 compared to $294 on Te Huia - made up of a $12 fare and a $282 subsidy. (The $48 was before last month's fuel price hikes. The study used IRD figures for diesel cost given KiwiRail also uses diesel on the service.)


The report, which acknowledges that with Covid and stop-start operations, the service can argue it is still to get a fair opportunity to show its viability, said using current trends alone to analyse its financial and environmental performance "displays the clear fact that the service in its current form is not achieving any of the goals that it was intended to".




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