KiwiRail Chief executive Peter Reidy said the decision to replace electric trains with diesel on the North Island main trunk line was the best for its business and its customers'.

﻿Kiwirail has announced plans to ditch its North Island electric rail fleet and replace with diesel freight engines - a decision derided by environmentalist and Opposition MPs.

But chief executive Peter Reidy says the switch will improve reliability and efficiency for Kiwirail's customers.

Plans to replace 16 electric trains - each about 30 years old - which operated between Hamilton and Palmerston North would see diesel locomotives begin operating in phases over the next two years.

SUPPLIED An electric freight train is to become a scarcity in the next two years.

The North Island Main Trunk runs from Auckland to Wellington but is electrified only between Hamilton and Palmerston North.

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Reidy said KiwiRail was essentially running "a railway within a railway" by having the electric section.

"Imagine having to change planes at Hamilton and again at Palmerston North, just to fly from Auckland to Wellington. That's not efficient, it's more costly and ultimately delivers a less reliable service.

"The doubling up of service facilities, inventory, training and maintenance required with two separate systems on the line adds to the inefficiencies and unreliability," he said.

The trains were breaking down on average every 30,000 kilometres, he said. It was well below the target of every 50,000km.

Kiwirail would need to purchase eight new diesel trains, but the rest of the work could covered by existing diesel trains, already owned by the cash-strapped State-Owned Enterprise.

Green Party transport spokeswoman Julie Anne Genter said it was a "massive step backwards".

"National has promised to take climate change and transport issues seriously, but it's underfunding of rail is responsible for short-sighted decisions like this.



"National should commit to completing the electrification of the North Island Main Trunk Line. This would send a clear signal to KiwiRail that they can invest in an electric future," she said.

Labour's transport spokeswoman Sue Moroney said today's announcement was the result of Prime Minister Bill English failing to properly resource Kiwirail for eight years (as finance minister).

"The electrification of the Main Trunk Line between Hamilton and Palmerston North was a $250m 'Think Big' project investment in the 1980's. The rest of the world is now following suit.

"National's 'new' Cabinet is already looking like a relic of a bygone era, within a day of its first meeting.

"It is absurd that the electric trains will be ditched, but KiwiRail will still have to keep an electric current going through the overhead lines for security at a cost of $3m per annum," she said.

Diesel trains would spit out five times the emissions of electric ones, she said. But Reidy said the decision was as much about the environment as anything else.

"This is an important move for New Zealand as without a reliable and efficient service, our customers will not move freight on rail and every tonne of freight moved by rail delivers a 66 per cent reduction in carbon emissions from road. That's critical for our customers, and for the country," he said.

Unions would be consulted before the phase-in began, as a "small number" of jobs would be affected.

Reidy said the electric options did not stack up.

"Ultimately the high costs of a new or refurbished electric fleet couldn't be justified, while the gains to be made from standardising our fleet were very compelling."

The cost of electrifying the whole North Island Main Trunk Line is estimated to be more than $1 billion for the infrastructure alone; feeder lines would still require diesel trains.

Reidy said it was not a "forever decision".

"We should not lose sight of the fact that last financial year freight carried by rail in New Zealand meant 1.1 million fewer truck trips, 76.7 million fewer litres of fuel used, and 208,613 fewer tonnes of greenhouse gas emitted and that was with a largely diesel fleet."

KiwiRail looked at four options before reaching Wednesday's decision; replace the electric fleet with used or new electric trains; upgrade the current electric fleet or replace them with diesel trains as used on the rest of KiwiRail's network.

A Treasury review of funding for KiwiRail considered whether most of the national rail network should be closed. Documents released last year, outlined how the Government invested more than $1 billion between 2010 and 2014. Despite plans to become a more substantial freight company, revenue in 2014/15 was similar to that of 2010.

That was the year a 10-year $4.6 billion turnaround plan came into force.