Here are some of our frequently asked questions about funding of Te Huia. Please look at the further topics on the side for more information.
Similar to 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.
Public funding for Te Huia is as follows:
Waikato Regional Council (WRC) – via targeted rate: 21.20%
Waikato District Council (WDC) – via general rate: 3.30%
Waka Kotahi NZ Transport Agency (Waka Kotahi) – via National Land Transport Fund: 75.50%.
The WRC share is collected from Hamilton city rateable properties through a targeted rate. Each rateable property pays a uniform annual charge of $20 and then $1.26 per $100,000 of capital value up to $5m.
Te Huia has operational funding approved from 6 April 2021 (service start date) to 30 June 2024. This coincides with Waikato Regional Council and Waka Kotahi funding cycles.
Approval of funding for the remaining years of the five year trial (from July 2024 to April 2026) will be determined via the Waikato Regional Council Long Term Plan 2024-34 and the Waka Kotahi National Land Transport Plan 2024-2027.
Waka Kotahi approved a total of $98.03m.
Of this, $85.80m is funded by Waka Kotahi and the remaining $12.23m by local government (WRC, HCC and WDC).
$68.7m was capital (all spent prior to service launch in 2022)
$29.3m is the approved operational costs for operational cost for five years of the trail.
The annual operational spend has been:
2021/22 = $5,311,020
2022/23 = $6,971,006
2023/24 = information will be provided after July 2024.
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 less, so is the service fee.
All Te Huia service-related fees are recoverable by KiwiRail under contract with WRC.
The Te Huia locomotives and carriages are owned by KiwiRail. However, if Te Huia is terminated earlier than the end of the start-up period, Waka Kotahi reserves the right to repurpose these assets to another public transport operation nationwide.
