Funding

Like other public transport across New Zealand, Te Huia is funded by a combination of passenger fares and public funding.

The public funding requirement is equal to the gross operating cost, less fare revenue.

Funding is dynamic – if fare revenue is higher, then public funding will be lower and vice versa.

From 01 July 2024, public funding for Te Huia is split as follows:

  • Waikato Regional Council (WRC) – via targeted rate: 26.70%.
  • Waikato District Council (WDC) – via general rate: 3.30%.
  • NZ Transport Agency Waka Kotahi (NZTA) – via National Land Transport Fund: 70%.

The WRC share is collected from Hamilton city rateable properties through a targeted rate. For 2024/25, each rateable property pays a uniform annual charge of $20 and then $10.88 per $100,000 of capital value (up to $5m).

The NZTA decided that Te Huia would progressively receive reduced subsidy – from 75.5 per cent to 70 per cent in 2024/25 and 60 per cent in 2025/26.

WRC is funding the remaining amount via the $2.2m of reserve funds accumulated due to the postponed service launch, COVID-19 lockdowns, and delayed rollout of service improvements in 2023.

Partners

The success of Te Huia is based on strong collaboration amongst a range of partners:

  • New Zealand Transport Agency: who both provide national funding and regulate the service operation.
  • Waikato Regional Council: who fund most of the local investment, and contract the service to:
  • KiwiRail: who operate the Te Huia trains and maintain the track / signalling (and The Strand station in Auckland).
  • Waikato District Council and Hamilton City Council: who operate and maintain the stations.
  • Auckland One Rail: who operate the rail lines in the Metro network.
  • Auckland Transport: who operate and maintain stations in the Metro network where Te Huia calls – Papakura and Puhinui.

For future service development, both the Ministry of Transport and Auckland Council will also be key stakeholders.

Operations of Trains

Te Huia is operated by KiwiRail under contract to Waikato Regional Council (WRC).

Te Huia has a cost-plus contract in place. This means KiwiRail charges WRC an ‘Operating Cost Amount’ for all operating costs incurred plus a ‘Service Fee’ monthly. The ‘Service Fee’ charged by KiwiRail is a percentage of the Operating Cost which means that if operating costs are lower, so is the service fee.

All Te Huia service-related fees are recoverable by KiwiRail under contract with WRC.

Ownership of Trains

Te Huia locomotives and carriages are owned by KiwiRail. However, if Te Huia is terminated earlier than the end of the trial period, New Zealand Transport Agency reserves the right to repurpose these assets to another public transport operation nationwide.