Rail Cost Allocation Modelling

Passenger Rail PT services are very expensive due to high capital costs.  But because so much of the capital infrastructure is shared across multiple services cost allocation is more difficult than bus services.

This does not mean that the rail costs cannot be estimated for different services sharing tracks, stations and network systems.  Indeed, it is critical for any passenger rail operator to have some means to understand the costs of providing each service compared to the use and revenue from that service.  Without this analysis, it is impossible to properly run the service, determine where further investment should be made or even justify the value of the service.

That said, it is notable that there is very little information released on the two main passenger rail services in Auckland and Wellington.  The only regular passenger rail costs that are easily available are:

  • The total cost of the rail service
  • The operating cost of the rail service (which, along with the total fare revenue is used to calculate the farebox recovery ratio for passenger rail)

There is nothing published on the costs of individual rail services such as the Onehunga Line in Auckland or the Wairarapa line in Wellington. One can occasionally find further information on these costs by asking for the background to rail improvement business cases and government reports although mostly any future cost estimates are withheld as commercially sensitive by KiwiRail, Auckland Transport and the Greater Wellington Regional Council (GWRC).

Rail Cost by Passenger Kilometre

However, whatever model is used, the following principles clearly apply:

  • It costs more to transport more people
  • It costs more to transport a person further

Using these principles is the simplest metric to determine cost allocation is to use the amount of passenger kilometres travelled.  This approach does have some shortcoming the most important of which it is not directly related to the cost of providing the rail service.  The reality is most of the cost of running a train is the same whether it is full or empty. Using passenger kilometres will give the same allocated to a service that runs mostly full at peak time (such as the Wairarapa Line) or empty such as for the all-day service to Waikanie.

That said, the passenger kilometre metric is widely used to measure rail PT services (such as the 2015 EU “Study on the Cost and Contribution of the Rail Sector”) and it also has the advantage that it can easily be derived from New Zealand census information for each area of the region.

Wellington Rail Passenger Kilometres from 2013 Census

Part of the 2013 census has been the creation by the GWRC of the “Wellington 2013 Census Journey to Work Document” and supporting Appendices.  The appendix includes a table on passenger rail travel between areas:

The following average distance table was used as the basis to estimate the passenger kilometres travelled:

Multiplying these together give the following Rail Passenger-Kilometre estimates table:

Adding up the total passenger kilometres for rail travel from each area of the Wellington Region gives the following estimate (passenger numbers included for comparison):

A final note is the 2013 Census Transport information is used because the 2018 Census Transport data is not due for release until May 2020 and it is not known when the Census 2020 Journey to Work report will be available.