Rail transport in New Zealand consists of a network of gauge (Cape gauge) railway lines in both the North and South Islands of New Zealand. Rail services are focussed primarily on freight, particularly bulk freight, with limited passenger services on some lines. Only Auckland and Wellington have urban rail systems, both of which are being upgraded and expanded.
Ownership of the national rail network is vested in a state-owned enterprise, ONTRACK (the New Zealand Railways Corporation). The primary operator is KiwiRail and its subsidiaries Tranz Metro and Tranz Scenic, with Veolia operating commuter services in Auckland.
From 1993 to 2004 the network (including the track) was owned by a private company, Tranz Rail, formerly New Zealand Rail Ltd. The infrastructure has been renationalised. In May 2008 the New Zealand Government agreed to buy Toll Holdings's rail and ferry operations for $665 million from 1 July 2008.
The network has been the subject of major upgrading works on a number of occasions. The most major of these were the Tawa Flat deviation in Wellington, opened 19 June 1937; the Rimutaka deviation to the Wairarapa, 3 November 1955; and the Kaimai deviation in the Bay of Plenty, 12 September 1978. All of these involved major tunnelling works, of close to each in the two latter cases. Significant infrastructure improvements were also carried out on the North Island Main Trunk in the mid 1980s, some as part of the electrification scheme.
Until the 1950s most motive power consisted of steam locomotives. There were three sections electrified at 1.5 kV DC (Wellington suburban, Christchurch-Lyttelton, and Arthur's Pass-Otira), of which only the Wellington suburban lines are still electrified. Dieselisation began in the late 1940s with shunting engines; the first main-line locomotives, the English Electric DF class, were introduced in 1954. By 1967 steam had virtually disappeared from the North Island but remained in the South Island until 1971. Since 1983 a small number of privately owned steam and diesel locomotives have been permitted to operate special trains. In 1988 25 kV AC electrification of the North Island Main Trunk between Palmerston North and Hamilton was commissioned.
Freight provides the overwhelming majority of revenue traffic, largely bulk traffic, with general freight being largely restricted to containerised and palletised products. Major bulk freight includes coal, lime, steel, wood and wood products, paper pulp, milk, cars, fertiliser, grain and containers. Freight operations are carried out by Toll.
Most freight services are geared towards export industries, with most services emphasising capacity. For example, coal services on the Midland line, headed by two class DX locomotives, generally consist of 30 coal hopper wagons with a total capacity of 1600 tonnes.
The former rail operator Tranz Rail had been accused of forcing freight onto the roads. In 2002, Tranz Rail introduced a controversial containerisation scheme that assumed that most freight would be carried in containers on unit trains made up of fixed consists of flat deck wagons. Container loading depots were constructed at the major freight terminals. As a result, the government has required minimum level of freight tonnages for Toll to keep its monopoly freight rights on most lines, since renationalising the rail network from Tranz Rail in 2003.
Freight levels have now reached the level that they were at when the railway had a virtual monopoly, prior to 1983. In 1980 11.8 million tonnes of freight was moved by rail, in 1994 this had decreased to 9.4 million tonnes. By 1999 tonnes carried had increased to 12.9 million tonnes, slightly more than the 1975 peak. After the 1983 land transport deregulation there was substantial rationalisation of freight facilities; many stations and smaller yards were closed and freight train services were sped up, increased in length and made heavier, with the removal of guards vans in 1987 and the gradual elimination of older rolling stock, particularly four-wheeled wagons.
In recent years the amount of freight moved by rail has increased substantially, and started to gain market share in non-bulk areas as well. The line between Auckland and Palmerston North saw a increase of 39% in freight volumes between 2006 and 2007. The five daily trains on the 667 km line reduced truck volumes on the route by around 120 per day.
In the heyday of passenger rail in the 1950s and 1960s most provincial routes had railcar and locomotive-hauled passenger services. In 1965, 25 million passengers traveled by rail, by 1998 this had decreased to 11.7 million. Today now there are only four long-distance routes: the Overlander between Auckland and Wellington (which was to be withdrawn in September 2006, but continues on a reduced timetable), the Capital Connection between Wellington and Palmerston North, the TranzCoastal between Picton and Christchurch, and the TranzAlpine between Christchurch and Greymouth. Long-distance passenger services are operated by Tranz Scenic, a part of KiwiRail. The Wairarapa Connection is sometimes regarded as a long-distance service but is run by Wellington's commuter rail operator, Tranz Metro, also part of KiwiRail.
Services to Tauranga (the Kaimai Express), Rotorua (the Geyserland Express), and Napier (the Bay Express) ceased in 2001; The The Southerner, between Christchurch, Dunedin and Invercargill, in 2002; and The Northerner night service between Auckland and Wellington in 2004.
For 9 years Tranz Metro also operated the suburban trains in Auckland, the largest city in New Zealand. However, in mid-2004 Connex (now Veolia New Zealand) won the contract to run them - Tranz Metro did not tender. There are three lines: the Southern Line, Eastern Line and Western Line. All trains are diesel-operated, using both DMUs and locomotive-hauled push-pull trains. Currently, there is a programme to build new lines, re-open old lines (such as the Onehunga Branch and extending services north to Helensville) and electrify existing lines to improve the quality and frequency of services. Most Auckland rolling stock is owned and all services are funded by the Auckland Regional Transport Authority (ARTA).
From 1870, the central government of Sir Julius Vogel proposed infrastructure including railway development, to be funded by overseas loans of £10 million. The central government also adopted a national gauge of . The first narrow-gauge line was opened on 1 January 1873 in the Otago Province, the Port Chalmers Branch under the auspices of the Dunedin and Port Chalmers Railway Company Limited. Auckland's first railway, between Auckland and Onehunga, opened in 1873. Vogel also arranged for Brogdens of England to undertake several rail construction contracts, to be built by "Brogden's Navvies" recruited in England.
At the network's peak in the 1950s, about 100 lines were operating. There were large-scale closures of branch railways in the 1960s and 1970s. The network was initially protected from road transport competition, but during the 20th century, this protection was gradually eased until its total abolition in 1983.
The networks of the North and South Islands were independent of one another until the introduction of the inter-island roll-on roll-off rail ferry service in 1962 by the Railways Department, now branded The Interislander.
During the period of private ownership of the network, Tranz Rail was widely accused of diverting freight to its trucks and forcing other freight off the rails. It was also accused of deliberately running down some lines through lack of maintenance. The Midland Line, which mostly carries coal from the West Coast to Lyttelton, was assessed to be in a safe but poor state by the LTSA government safety body in 2003, and has needed major repairs. One of the reasons often cited for these policies was the cost of using road transport was less than using rail, because the road infrastructure was provided as a public good, whereas the rail network was a private good. Tranz Rail was also alleged to have denied reasonable access to the rail network by heritage operators, who were faced with a lack of access to certification resources and high charges that made their operations marginally economic at best. In recent years heritage groups have also faced increased bureaucratic requirements in the arena of safety certification, as well as problems obtaining suitable public liability insurance.
In 2002 shares in Tranz Rail dropped to a record low price on the New Zealand Sharemarket as a result of its poor financial state. The government then considered various schemes for bailing it out in return for regaining control of the rail infrastructure. Cited reasons included moving freight traffic from road to rail and ensuring access to the tracks for all interested parties. Toll Holdings of Australia made a successful takeover bid for Tranz Rail, subject to an agreement to sell back the infrastructure to the government for $1. The government has since committed to $200 million of taxpayer funding on deferred maintenance and capital improvements via the New Zealand Railways Corporation, now trading as ONTRACK.
Following successful negotiations with Toll in May for the purchase of its rail assets, the government formally acknowledged the change of ownership at a ceremony on 1 July 2008. The name of the new government organisation created to operate services on the rail network was revealed to be KiwiRail.
Rail museums in New Zealand usually focus around storage and displays of rolling stock with a short line of approx 1 km or more in length on which trains are operated. This covers most of the historic rail groups in New Zealand. A smaller number of lines are operated as heritage railways, usually on a closed section of a former national network branch line. Typically these lines are longer, usually 5 km or more, and most of their activities are focused on train operations with less emphasis on display and storage.
Current operations of the heritage railway type include the Glenbrook Vintage Railway, Bush Tramway Club, Waitara Railway Preservation Society, Weka Pass Railway and Taieri Gorge Railway. The Taieri Gorge Railway, which is a Local Authority Trading Enterprise of the Dunedin City Council, is 60 km in length, making it the most ambitious project of its type to date. All other lines are operated by voluntary societies. The Weka Pass Railway at 13 km is the most lengthy of these. The Bay of Islands Vintage Railway is 11 km in length, but it is in poor condition, though having operated its first trains through Kawakawa since ceasing operations in 2000 for two weeks from 3 July 2007, the Society is now working on rehabilitating the track between Kawakawa and Opua.