Labour pledges to fund Capital Connection

05:25, Jun 23 2014

The Capital Connection rail link between Wellington and Palmerston North continues to make significant losses, despite concerted efforts to make it commercially viable, and halfway through a two-year trial the link’s future looks shaky.

Labour has promised to save the financially-stretched passenger service by pumping in millions in subsidies if it is elected in September.

But Transport Minister Gerry Brownlee has dismissed the proposal, saying efforts to save the service are failing and if passengers want it to survive they need to use it.

Brownlee agreed to a 2013 proposal from councils, including Greater Wellington and Kapiti District, to maintain the service for an extra two years in a bid to see if it could be saved, after KiwiRail revealed the operation was making a loss.

But in spite of fare hikes and efforts to boost patronage, the line will make a loss of more than $600,000 this year, while the number of passengers has also declined.

KiwiRail said in 2012 that in order to be financially viable, it needed an extra 61 passengers a day in each direction in order to break even by 2015 and average ticket prices needed to be 40 per cent higher.


Brownlee, who has faced criticism over a lack of funding for public transport initiatives, said that “if people want it they need to use it”.

“The total daily patronage is about 250 people in each direction so the increase that was required was not huge and it’s a little disappointing that we're in that position.”

He would not say whether he thought the service would last past the middle of next year, saying the review was still underway.

“Asking me midway through that process to ignore the falling patronage and the cost of running it this coming year and make a commitment to it I think does a huge disservice to the people who came to my office and asked for this arrangement.”

Labour is promising to adopt a 2012 business case from Greater Wellington and Horizons regional councils which suggested local councils and the NZ Transport Agency subsidise the line to keep it open at a cost of  $3.8 million over five years.

“Labour will invest in all transport modes, not just roads, to deliver an efficient and sustainable transport system. As the business case shows, the Capital Connection stacks up. We will work with local councils to keep it on the rails,” Labour’s Transport spokesman Phil Twyford said.

KiwiRail’s General Manager Passenger Deborah Hume acknowledged there was a “public preference for the weekday service to continue” but its future beyond the middle of next year depended on it becoming financially viable, and more people getting on-board.

“While any subsidy or funding from local or central government may well assist the Capital Connection to continue, any future decisions regarding a change to funding policy would not be made by KiwiRail.”