Scoop Election 08: edited by Gordon Campbell

On Kiwirail’s current problems with its Chinese-built wagons

February 23rd, 2012

kiwirail, flat-top wagon, trains, cargo, transport, lemon

For many people, Kiwirail’s decision to buy 500 flat top wagons from manufacturers in China instead of building them at Hillside workshops in Dunedin was a classic case of New Zealand chasing short term cost savings from overseas providers at the expense of many local jobs, the development of manufacturing expertise in this country and the related flow-on economic benefits to the wider community. In recent weeks, the issue of the $49 million rail wagon contract has risen again – this time over news that the Chinese-built wagons are already requiring repairs at a rate significantly higher than normal.

Earlier this week, I asked Kiwirail CEO Jim Quinn to update what the precise figures for the repair list were, and what is known about the causes. “We currently have a total of 46 IAB container wagons (made in China) out of the total fleet of 500 under repair or undergoing maintenance in maintenance depots around the country,” Quinn replied. “This represents 9% of the total fleet. With normal operations we always plan for at least five percent of a fleet of wagons to be either under repair or undergoing normal maintenance. This is normal practice for rail operations worldwide as the rolling stock is working 24/7. In other words we have a less than 4% increase in what is normal.” [In fact, 46 out of 500 is 9.2%, so the increase is slightly more than 4 %. Moreover, if a 5% level is to be taken as the norm, then at 9.2%, the repairs on the Chinese-built wagons are running at almost twice the normal rate.]

The cause of these breakdowns remains something of a mystery. To me, Quinn indicated that the problem is “wheel skid,” with the cause as yet unknown. “There hasn’t been a systemic failure with these wagons, rather there is a specific wheel skid issue in 20 [18 of these wagons are currently being held in Christchurch] of these wagons for which the cause has not yet been fully diagnosed. It could be operational (eg handbrakes being left on) or a mechanical issue. Once we know the cause we will implement the appropriate response. In terms of the diagnosis – what we do know so far is that in the majority of cases the wheel skid issue is only happening on the bogie (wheel) with the handbrake on it and it is almost impossible to skid wheels on only one bogie unless it is due to the handbrake being left on. We have not found an example of any other possible cause would have caused the skid on the reviewed wagons to date.”

Right. So it could be an operational failure to check whether the handbrake has been released, or a mechanical failure – or a mixture of the two. Wayne Butson, general secretary of the Rail and Maritime Transport Union explained to me how the wheel skid damage appears to be occurring: “The hand brake mechanism on the new Chinese wagons are different to any other handbrake. You turn the handbrake like a wheel to turn it on and then there’s a lever you pull to release the handbrake. What they’ve found is that when you pull the lever sometimes the handbrake still doesn’t release, so the wheels stay locked up and the wheels get dragged along the track… and the wheels go flat.” As Butson readily concedes, some of the earlier wagon prototypes built at Hillside share the same problem – “They started building them [at Hillside] and they optimised the design – and once they had it right, that’s when they sent it over to China and got it built…”

The solution, as Quinn indicates, may require a technical fix – presumably one focussed on the linkages between the lever release and the handbrake – or an operational one. An operational fix would require a double check to ensure that the lever release had, in fact, released the handbrake as expected – and if not, this would then have to be released manually. The more interesting point is that no one appears to know what is causing the problem.

Furthermore, by my calculations, the wheel skid problem accounts for only 43.5% of the wagons currently in for repair. More than half are in the repair shop for some other reason – presumably for wear and tear, inadequate welds etc. Again, this mix of problems is unspecified. As Quinn maintains. there hasn’t been “a systemic failure” with these wagons and Kiwirail continues to be “very pleased” with their performance, but the failure to diagnose the reasons for their current malfunctions is troubling – given that the wheel skid problem alone appears to be pushing the incidence of damaged wagons out of service up to nearly double the normal rate.

There is an added issue, equally mysterious. Butson points out that the design of these wagons included a slight curvature in the middle – a bend in the steel designed to straighten as the wagon is filled, allowing the ends to be locked off. This isn’t happening as expected, Butson says, at a higher rate with the Chinese built wagons. “What the troops are finding is that they’re having real difficulty loading and unloading the wagons. So if you were dropping a 40 foot container on a Chinese wagon… the centre of the 40 foot container sags below the end of the container, as its sagging with the weight. Two fat bellies meeting in the middle means there’s a problem at the ends. So what they have to do is force boxes onto the wagons and so on, and then they smash hell out of the twist locks trying to get them to lock in at the ends. “

As yet, Kiwirail’s Jim Quinn says. there have been no indications that this particular problem with the Chinese-built wagons is resulting in damage to the containers. “There [have] been no reports of container damage as a result of being used on these wagons.” However, Quinn confirmed that the problem exists, and that the cause of it remains as yet unknown. “One issue that has been discovered in only a couple of these wagons is when loading some empty (or light) 40 foot containers, they can’t be fastened. We are working with the Chinese supplier on what could be causing this.”

For his part, Butson can’t say whether the quality of the steel on the Chinese built wagons may be a contributing factor. “No one can tell me whether there is a difference between the metal specifications on the Chinese wagons versus the Hillside ones. But in practical terms I’m told the Hillside ones are easier to load.” Quinn is adamant on this point : “The Chinese wagons have been built using a higher grade of steel than those constructed at Hillside.”

In sum, if Kiwirail is still largely in the dark as to what is causing (a) the wheel skid problem and (b) the locking off of the wagons problem, the ability to seek redress under the contract would appear to be limited. As yet, ‘total systematic failure’ of the Chinese built wagons is not happening. Yet the current rate at which the wagons are turning up in the repair shop is hardly a ringing endorsement of the policy of getting cheap foreign providers to build the key items in our transport infrastructure.


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    1. 10 Responses to “On Kiwirail’s current problems with its Chinese-built wagons”

    2. By Jason on Feb 23, 2012 | Reply

      Nice one Gordon. I was especially struck by Quinn commenting that they’re “very pleased” with the performance of new wagons that, as you’ve niftily pointed out, are failing at twice the rate expected for a mixed-age fleet. To be generous, Kiwirail must have a very forgiving attitude. What would it take for them to be merely “pleased”; a quarter of the wagons failing? :).

    3. By Jack on Feb 23, 2012 | Reply

      Sad, really when over 40 million could have been spent in Dunedin in jobs. Yet, Key decided to use the chinese. He must really dislike kiwis.. he did the same with the ferry from wellington to south island.. had it shipped to south korea for repairs. I don’t like my tax dollars going abroad and Key is costing us, not saving us money. I suppose those 48 employees have time to work on Key’s bike trails… after all the police have more time, they can work on Key’s tea tapes.

    4. By Hamish on Feb 24, 2012 | Reply

      While “failing at twice the rate expected” sounds shocking, it is only an extra 21 wagons under repair then what KiwiRail allows for at any one time. Considering KiwiRail owns a few thousand wagons, 21 is nothing.

      However, you can expect that number to drop to within normal limits once KiwiRail and the wagon builder work though the two issues.

      Gordon might want to consider what “bathtub performance” means. Recently the reliability of KiwiRail’s new Chinese built locomotives has jumped sharply, with the mean distance between failures more than doubling within a two month period, even though their performance at the start was less then ideal. All because new equipment isn’t that good at the start does not mean it’s a lemon.

    5. By Robert Miles on Feb 25, 2012 | Reply

      In New Zealand in the 1970s and 1980’s there was a general view that the rail system was economical and an efficient user of resources for freight movement but not for passengers. I was always interested in rail and did my initial MA(hons) thesis about the decisionmaking about rejected options of buying new inter city and provincial rail carriages and railcars in the mid 1970’s.
      I never believed the consensus view, in the modern world my assessment rail is suitable for short and medium distance passenger services and is neither sensible or economical for freight except for coal and a few specialised business. The Queensland Railways similarly narrow gauged have always moved ten to twenty times as much coal as NZR and any idea of our railways being useful as a coal mover , really died with the abandonment of the original plans to complete the Nelson-Inagahua railway link in 1930 after a series of earthquakes. Recent plans to move useful tonnage of coal over the Alpine line died with the Pike River fiasco and the obvious failure to modernise the potential rail line for coal haulage thru , Christchurch. By about 2008 Christchurch motorists were already experiencing massive disruption from the small coal trains.
      Why on earth was the money wasted on these freight trucks and Chinese locomotives not spent on expanding carriage production for regular passenger trains to Hamilton, Tauranga and Palmeston North or more tourist trains tin the South Island say a Searider from Dunedin to Timaru,

    6. By Adrian on Feb 25, 2012 | Reply

      “we have a less than 4% increase in what is normal (rate of failure)”

      No they don’t. They have an 84% increase in the normal rate of failure.

    7. By MP on Feb 26, 2012 | Reply

      Thank you for this correct. Glad someone beat me to it.

    8. By dan on Feb 26, 2012 | Reply

      ha ha good job how did i see this one coming another great decision from a national government,this will just be the beginning,well not really the beginning, of out sourcing labour,thanks to the clue-less people that voted for a national government, you know the greedy and dumb people.

    9. By Hamish on Feb 26, 2012 | Reply

      4% is referring to the amount of wagons out of service, not the increase in rate of failure.

    10. By bob on Feb 29, 2012 | Reply

      Yes Hamish, but at whose cost? I’m sure the Chinese manufacturer enjoys having Kiwirail function as a test bed for their R&D development work, but will they reimburse Kiwirail fully for that? I doubt it.

      And a ‘doubling of distance traveled between failures’ for the new Chinese built locos tells us nothing really; is that from 10km to 20? from 100km to 200? fro 10,000 to 20,000? You haven’t told us.

      What is interesting is that Wayne Butson suggests Hillside workshops had done the development work on that flatbed wagons and sorted it, with just the earliest prototypes still flat-spotting their (steel) tyres. If so, why didn’t Kiwirail pass on the latest data to the Chinese maker to ensure the full order of wagons were up to standard?

      The govt should insist that the Kiwirail Board get answers to Gordon’s questions from Jim Quinn, with no evasion allowed.

    11. By Karl on Oct 9, 2012 | Reply

      I have some details below I’ve worked out to Save Hillside Workshops & put $375 Million into the Dunedin / NZ Economy . Which I have sent to the EPMU to table this Fri @ their Job Crisis Summit !
      NZ Doesn’t have a Crisis if the NZ Government put this money to work for Kiwi Workers instead of investing it in Chinese jobs !

      Links below are where I got my figures 25% Dearer if made @ Hillside with the current High NZD

      John Key was in Hollywood trying to create Jobs for New Zealanders . Where as John & his Team in “Wellywould” ? there be more Jobs & Business confidence in NZ by 2015 ? John Come Back to Hillside Workshops in Dunedin !
      Well if you read Kiwi Rail’s Web Site you will see they Need 3000 New Container Wagons & they are to be Built over 10 Years in China . Take 3000 New Wagons Divided by 10 years = 300 Wagons per year ! Then Divided 300 New Wagons by 40 Weeks = 7.5 Wagons per week . This is what Hillside Workshops could be doing Now ! Which would be keeping $37.5 Million NZD in NZ . Keeping More than 250 Kiwi Rail Workshop staff in a Job ( they should be able to do this as they are only Flat Deck Container Wagons) these would be built over 10 Years ! These Wagons will need Steel ( from Glenbrook )& other NZ Steel Suppliers , Paint from Local Manufactures , Hoses & Fittings , Bolts, Tools , Welding & Gas Cutting supplies, Grinding Disc’s , Transport firms Couriers etc (Pumping Millions Annually into Dunedin & NZ Economy ) !!!
      Then if Kiwi Rail wants them Built Sooner, then they could be Sub Contracting this work out to other NZ Engineering Firms creating More Jobs & Business confidence in NZ NOW !
      This will Pump $375 mil NZD into the NZ Economy. This is how you get the NZ Economy Pumping Spending Kiwi Dollars in Gods own Employing Kiwi’s & Training Apprentices over many Trades !

      Steamingmadd !

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