Dr Aaron Fox: An Open Letter to NZ Prime Minister regarding KiwiRail’s proposal for a 24/7 Intermodal Freight Hub near Palmerston North

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With the permission of Dr. Aaron Fox, I am publishing his open letter dated September 26th 2023 addressed to New Zealand Prime Minister Chris Hipkins. Dr. Fox’s letter concerns the proposed KiwiRail freight hub near Palmerston North, which directly affects our own unique property (a stunning two-storey estate with 500+ m2 floor, 3000+ m2 garden, 3000+ m2 paddock housing up to 9 people).

Over the past three years, my family has tried repeatedly to engage with KiwiRail regarding how their freight hub proposal will impact our unique property and the unfair compensation they have proposed. All of our efforts have been met with indifference and frustration, as KiwiRail does not seem to care about how their project will affect us.

Dr. Fox’s letter voices many of the same concerns I and other impacted residents have about KiwiRail’s expansion of the original approved plan, the lack of community consultation, the environmental impacts, and the coercive use of compulsory acquisition powers against landowners like myself. I am publishing his important letter in the hopes that Prime Minister Hipkins will intervene and reconsider KiwiRail’s approach, before more livelihoods and homes are lost to this deeply flawed project. Our community deserves to have our voices heard on this matter of national importance.

The open letter raises numerous concerns about KiwiRail’s proposed rail freight hub expansion, its impacts on the community, and whether it has acted appropriately as a state-owned enterprise and requiring authority. It calls for government intervention and scaling back of the project.

I sincerely hope everyone receiving this letter can assist with sharing it to as wide an audience as possible. Broadly disseminating these important concerns across your networks will empower our community’s voice to be heard regarding KiwiRail’s flawed freight hub proposal. Your support in distributing this message through social media, email, or other channels gives us the best chance of driving real engagement and, ultimately, positive change around this project. We need your help to spread this open letter far and wide – only together can we apply enough pressure to get the government to properly investigate KiwiRail’s actions. I’m asking you to share this because amplifying our worries is crucial if we want to protect our community. Please lend your voice to distribute this letter – united we can make an impact. Thank you.

26 September 2023

The Rt Hon Chris Hipkins

Prime Minister

Parliament Buildings

Wellington

Re: An Open Letter regarding KiwiRail’s proposal for a 24/7 Intermodal Freight Hub near Palmerston North

In October 2018 Cabinet approved the use of $40 million of Provincial Growth Fund monies to assist KiwiRail in land-banking 65 hectares of land for the relocation of the current rail freight facility in Palmerston North. Cabinet was advised that this was industrial-zoned greenfield land, removed from neighbouring rural or residential properties. Regional Development Ministers expressed their reservations on 5 November 2018 that this should not become a toll operation.

KiwiRail has since expanded this proposal to a 177.7-hectare 24/7 intermodal freight facility near Palmerston North. To achieve this, the State-Owned Enterprise is using its powers as a Requiring Authority to place a designation on the local district plan, and to compulsorily acquire private properties – farmland and family dwellings. Much of the proposed operation involves the construction for rent to freight companies of warehousing and freight forwarding facilities.

A State-Owned Enterprise is required to exhibit ‘a sense of social responsibility by having regard to the interests of the community in which it operates’. What KiwiRail has offered our community is acoustic-treatments for those who will live closest to the hub – hermetically sealed houses with insulation, double-glazing and heat pumps to keep the noise out. For the rest of us, if we cannot cope with 24/7 construction and operation, and the concomitant noise, vibration, light and dust, then KiwiRail is satisfied that we can sell-up and leave.

The objectives of the Provincial Growth Fund were to:

• Create jobs, leading to sustainable economic growth.
• The Freight Hub may not create any new jobs. The figure of a workforce of 2,000 at the freight hub announced in July 2020 by then Regional Economic Development Minister Shane Jones has been bargained down to supporting some 300 jobs during the construction phase. KiwiRail’s proposal may simply relocate workers from existing freight forwarding facilities in Palmerston North. As at 31 July 2021 KiwiRail has spent $19,183,000 million of the $40M of PGF funding, and supported 43 previous and 29 current jobs to a total of 72 jobs. This is, after all, a land-banking exercise.

• Increase social inclusion and participation.
  • KiwiRail’s Social Impact Assessment was a desktop exercise conducted without reference to our community. Our community was never involved with the multi-agency workshops which produced a masterplan for the hub. KiwiRail has not offered any benefit or amenity to our community arising from this proposal.
• Enable Māori to realise aspirations in all aspects of the economy.
• From the outset, KiwiRail consistently dealt with the wrong Iwi in respect of the freight hub site – with Rangitāne and not with Ngāti Kauwhata.
• Encourage environmental sustainability and help New Zealand meet climate change commitments alongside the productive use of land, water and other resources.
• The majority of the site is situated on land outside of the Palmerston North City Council’s industrial zone and encompasses highly productive farmland hear the city. The area is also crossed by drainage and tributaries of our local streams and is prone to flood several times a year. The substratum is largely silt, which is prone to liquefaction in the event of an earthquake. Even KiwiRail understands that the geotechnical work and earthworks required to reshape and drain the site are prohibitively expensive.
• Improve resilience, particularly of critical infrastructure, and diversify our economy.
• The proposal is the opposite of diversification, concentrating log, container and milk powder freight movements on one gigantic site. It is also redundant, given that the existing Manawatu Inland Port near Palmerston North for container movements, and the separate proposals for the Marton and Woodville Rail Hubs to service the local forestry industry.

There is also the question of what constitutes ‘critical infrastructure’. KiwiRail is a requiring authority under the Resource Management Act for ‘its network utility operation being the construction, operation, maintenance, replacement, upgrading, improvement and extension of its railway line.’ The compulsory acquisition of private property to construct and rent warehousing facilities is surely exterior to the definition of ‘network utility operation’. This is rightly the purview of local developers and landlords, yet KiwiRail has declared them to be trade competitors for this project.

To realise the designation of 177.7 hectares of both industrial-zoned and privately-owned land as the site of the freight hub, KiwiRail has:

• Expanded upon the original Cabinet approval (from 65 to 177.7 hectares, and from the relocation of an existing freight facility to an intermodal freight hub proposal).
• Neglected its requisite ‘sense of social responsibility’ regarding our community.
• Subverted the objectives of the Provincial Growth Fund.
• Creatively reinterpreted its approval as a requiring authority to define warehousing and freight forwarding facilities as elements of the railway ‘network utility operation’.

This sets a dangerous precedent for other requiring authorities to reinterpret their approvals without reference to the Minister for the Environment, especially with respect to the compulsory acquisition by these requiring authorities of private property. A local kaumātua has observed that the freight hub proposal represents the greatest land-grab for railway construction in 150 years.

KiwiRail has announced that it will prepare an investment case for the development and operation of the freight hub. Any such case must be based on the latest freight transport data and projections, and not the 2014 figures which informed KiwiRail’s original proposal. Further, my abiding concern is that any such investment case is predicated on KiwiRail operating as a government-approved coercive monopoly:

• As a Requiring Authority, KiwiRail can:
  • Designate land for network utility operations – which currently includes non-network utility operations including warehousing – thereby denying this land for any other use.
  • Develop and operate on designated land without further reference to the Resource Management Act.
  • Operate without competition from private sector developers and landlords.
  • Determine and police its own operating conditions for the proposed freight hub and exclude certain aspects of its operation from any restriction or control.
• As a State-Owned Enterprise:
  • KiwiRail has access to government funding not available to the private sector.
  • KiwiRail is the sole beneficiary of government policies to transfer freight movement from road to rail.
  • Is required to be ‘as profitable and efficient as comparable businesses that are not owned by the Crown’, yet the profitability and efficiency of the proposed freight hub can only be achieved by KiwiRail operating in lieu of, rather than in competition with, comparable freight companies.

My eight questions to you, are, therefore:

• Do you approve of the expansion by KiwiRail of the 2018 Cabinet approval for the relocation of the existing Palmerston North railway freight facility to an intermodal freight hub?
• Do you approve of the expansion by KiwiRail of the 2018 Cabinet approval to encompass privately-owned farmland and households?
• Do you agree that the 2018 Cabinet approval for a 65-hectare land-banking exercise authorised KiwiRail to expand the original business plan to a 177.7-hectare inter-modal warehousing and freight hub proposal?
• Do you agree that KiwiRail can, without reference to the Minister of the Environment, reinterpret its powers as a Requiring Authority under the Resource Management Act to designate and compulsorily acquire privately-owned farmland and households for non-network utility purposes?
• Do you agree that highly productive land close to a city would be better purposed as an intermodal freight hub?
• What constitutes the success of this proposal – the number of new jobs created, the volume of freight transferred from road to rail, or does the intermodal freight hub have to return a profit rather than operate as a toll facility?  
• What is worse – losing your livelihood or family home to a natural disaster, or to KiwiRail’s coercive monopolistic practice?
• For the proposal to be viable, KiwiRail needs to be the exclusive beneficiary of Government policy, funding and authority. From my perspective this represents an alarming state-sponsored monopoly. Is this how your Government intends that State-Owned Enterprises and Requiring Authorities should operate?

If your response to any of these questions is in the negative, then I further request that you please:

• Initiate an enquiry into the Freight Hub Proposal, particularly with respect to any areas where KiwiRail may have expanded upon, neglected, subverted or creatively reinterpreted its approvals and responsibilities; and
• Initiate an enquiry into whether – or not – the Freight Hub Proposal meets the requirements of the Provincial Growth Fund; and
• Clarify whether – or not – KiwiRail as a Requiring Authority under the Resource Management Act can designate and compulsorily acquire private property for the purpose of non-network utility operations; and
• Consider putting a halt to the 177.7-hectare freight hub proposal, and instead direct KiwiRail to transfer the existing freight facility to the new 65-hectare site on industrial-zoned greenfield land. Those private landowners who stand to lose their livelihoods and homes, and the community of Bunnythorpe, would welcome an end to the uncertainty and anguish which this proposal has delivered to us all since 2020. Ancillary works would best be undertaken by local developers and landlords, though the standard planning approval process.

This is an open letter, which I am circulating as widely as possible. I consider that the issues which I have canvassed are of interest to not only our own community but the wider public, especially during a national election.

Yours sincerely

Aaron Fox (Dr)