Steaming ahead of rail's struggles

BY CATHERINE HARRIS

Jim Quinn is a man with a plan, and plenty of passion for his job.

He's going to need both, for his role as new chief executive of KiwiRail is essentially to stitch the country's rail and ferry system back together.

It's a business, he says, "that has for no specific, individual reason been put through a huge amount of change over the last 25 years as it's had multiple owners, been pulled apart and now been pulled back together".

"Because of that, it's a business which needs genuine, long-term thinking, a long-term plan and dedication to sticking to the plan." Some people trace the underinvestment well beyond 1993, when NZ Rail was privatised and sold to a consortium including merchant bankers Fay, Richwhite and Company for $400 million. They listed it and renamed it TranzRail.

Ten years later the Government bought back the tracks but let Australia's Toll Holdings take over the rest for $394m.

Last May it was bought back by the Labour Government for $665m, only to be revalued by Treasury in November at $448m and just recently at $349m.

Mr Quinn is not one for apportioning blame. He studiously steers clear of the public-versus- private ownership debate.

All he will admit is that KiwiRail has been "underloved" and that it is "in its rightful place now". One of his first tasks in his new role has been to answer complaints from freezing capital commuters in heater-less carriages.

He reiterates patiently that many of the faulty parts are from the 1960s or 70s and must be built. Wellington is part of a "bow-wave" of maintenance the company faces and as new carriages only arrive next year, KiwiRail has become "an expert in refurbishment".

Mr Quinn did not grow up as a trainspotter, although he notes plenty of his staff do have that kind of love for the railways. He was a "military brat", moving around with his family until secondary school at Silverstream, and then he veered away from university for a job in a courier company.

His parents may have been initially worried at his career choice, but he remained at NZ Couriers for 15 years, working his way up to general manager.

There's a certain irony in his past - the soaring courier industry in the 1980s coincided with deregulation in land transport, which sliced the NZ Railway Corporation's revenues in half.

In the courier business, Mr Quinn acquired a feel for logistics and a love for IT.

From there, he took senior roles at two software firms and at Waikato's WEL Energy Group during deregulation of the electricity sector.

In 1998, Mr Quinn agreed to do a month's consulting work for NZ Post and eventually ended up heading its joint venture with DHL, Express Couriers.

"I had no real desire to go there because I'd sort of competed with them most of my life.

"But I had the opportunity. I'd finished with Advantage and, 10 years on, I left a couple of months ago."

Now at KiwiRail, Mr Quinn says he's first and foremost a service business kind of guy who enjoys uniting a team towards a goal.

"I'm guess the common theme across all of the businesses I've been involved in is people."

Over the next few years, KiwiRail already has some key priorities. Auckland and Wellington's metro services are being upgraded and are due for electrification. Auckland passenger numbers have doubled over the past five years.

But freight remains the major earner. Although KiwiRail hauled just 6 per cent of freight tonnes last year, rail freight volumes are projected to grow 70 per cent in the next 22 years. Maturing forests and growing dairy exports are expected to play a big part.

However, one of rail's dilemmas is that it relies on government top- ups to remain affordable. The Government does so in the hopes it can move freight off an increasingly clogged roading system but rail still struggles to compete with the trucking industry for speed, operational cost and route flexibility.

The answer, Mr Quinn says, is for rail to play to its strengths.

That means a more reliable heavy goods carrier that is well integrated with trucks, ships and main ports. Likewise, passenger rail might need to integrate better with buses and cars.

"It's important to understand we are part of what New Zealand needs, not the answer."

While long-distance passenger rail in New Zealand has largely disappeared, Mr Quinn acknowledges that internationally metropolitan train travel is getting a second wind and that it is important to preserve the assets for the long term.

The needs of the rail system now are not necessarily the ones of tomorrow, he notes, citing the "coal route" to the West Coast and the "milk route" in the central North Island.

"They're two of the most heavily used routes today but no forecast 25 years ago would have said that."

In the meantime, there is plenty to be done. At least one ferry will need replacing by 2016 and some 200km of tracks are nearing the end of their life. Bridges need to be fixed, locomotives are underpowered, bigger wagons are needed and there's ongoing maintenance and upgrading.

KiwiRail needs a $2 billion injection over the next five years, half of which it can raise but for the rest of which it is reliant on the Government.

And some help has been forthcoming. Recently the Government funded 20 new locomotives for key freight routes, 100 new wagons for heavier loads and 17 new carriages for the Tranz Scenic tourist business.

Transformation won't happen overnight but in five years, Mr Quinn says, he has an idea of what he'd like to see.

"I'd like to see a long-term view of where we're going, which everybody understands, and that we would have delivered on getting the structure of the business right so it can deliver what the market values of it, day after day, night after night.

"I just see this as an opportunity to put what is a fantastic New Zealand asset into the shape and state it needs to be to deliver the value it can."

- © Fairfax NZ News