KiwiRail’s own figures show Hillside closure a political decision

The Alliance Party says the announced closure of Hillside railway workshops cannot be justified on cost grounds at the same time as KiwiRail is pumping cash into corporate salaries.

Alliance Party co-leader Kay Murray says the number of senior managers on inflated salaries at KiwiRail has soared at a time when the company is pleading poverty, indicating other factors are at play.

Ms Murray says information released by Kiwirail to Dunedin man Trevor Hislop under the Official Information Act on the tendering of KiwiRail wagons is deeply troubling. This information showed the successful CNR tender was  $31.3 million and the Hillside tender was $37.7 million – a difference of only $6.4 million (Otago Daily Times, 21 November 2012).

Local National list MP Michael Woodhouse was quoted as saying the difference between tenders was about 40% (Otago Daily Times, 16 November 2012). Ms Murray says the actual difference would appear to approximately 20%. “This is a significant discrepancy. A difference of $6.4 million pales into insignificance when one considers that according to its 2011/ 2012 annual report, KiwiRail’s overall operating expenses appear to have increased by over $70 million dollars.”

Ms Murray says the Alliance finds it interesting that despite a wave of redundancies in 2011, KiwiRail’s overall wage bill appears to have increased by $21 million. The number of employees earning over $100,000 a year reportedly increased from 405 in 2011 to 564 in 2012. KiwiRail now employs four people who earn over $440,000 a year compared to one in the previous year, at a cost of at least $2.4 million between them. Ms Murray says the Alliance does not see much evidence cost cutting in these figures and does not believe cost cutting can be behind the closure of Hillside.

Nor is the closure due to lack of work, she says.  According to the KiwiRail 2011/2012 annual report, it has 535 new wagons “and more to come”.  KiwiRail has said on previous occasions at least 3000 are needed. “If that is true there is plenty of work for Hillside Workshops.” Ms Murray says it is imperative full information about the tenders and the exact number of wagons still required is made public.

“This is a major issue. Ninety jobs are at stake and a further forty were lost last year, jobs that Dunedin and New Zealand cannot afford to lose. KiwiRail intends to close a productive public owned workshop employing skilled workers when there appears to be plenty of work available.”