KiwiRail's future could be veering more towards mothballs than mega-ferries, but the government's not sending out any hints

Rail in New Zealand looks to be following a dead-end track with no firm plans to replace the Cook Strait ferries, and a government preference for roads.

In the 16 years since it was bought by the government for $690 million, KiwiRail has had several overhauls and turnaround plans, worth billions of dollars.

Its ambitions as a successful, profitable operator of tourism, freight and ferries have often been derailed by disasters from earthquakes to cyclones, mine explosions and the collapse of key industries like coal mining.

The latest goal for KiwiRail under the multi-billion dollar 2021 New Zealand Rail Plan was to make its "above rail" business of trains and ferries commercially viable by 2025 and able to fund future investments, but that was contingent on significant ongoing government investment in the network, the "below rail" side of the business.

"It gave KiwiRail certainty for the first time that it would get specific allotments every year for three years and then having a wider 10-year outlook," BusinessDesk infrastructure editor Oliver Lewis tells The Detail.

But the new government is taking a different approach to the state owned enterprise, making it clear that road users would not be cross-subsidising rail through the National Land Transport Programme.

"That results in a massive reduction in the possible range of funds that KiwiRail can access in future years. And so there's a lot of concern from the unions and others, (including) rail users, that this might result in more underutilised lines getting closed down or mothballed," says Lewis.

Add to that the finance minister Nicola Willis' bombshell decision not to pump another billion dollars into the Interislander mega ferries, sinking the project and leaving a question mark over KiwiRail's future as a shipping operator.

"I get the impression that government and officials are asking themselves this very question," New Zealand Herald's Wellington reporter Georgina Campbell says.

Campbell has been following the dramas of the Interislander for several years and says she felt relief that KiwiRail was pursuing a plan to replace the ageing ferries, especially after the terrifying Kaitaki incident last year when it drifted towards rocks, endangering the lives of hundreds of passengers on board. …

Go to this episode on rnz.co.nz for more details