KiwiRail: Another Year Older and Deeper in Debt

KiwiRail has turned another net loss; this time $248 million. No surprises there. The government has poured in about $1 billion of taxpayers money since 2010. That is a lot of money and there are lessons that need to be learnt before we pour in another $1 billion.

Lesson number one: accept that rail exists for the common good. It is a public service. Rail takes the pressure off roads, is environmentally friendly, and should provide a cost effective way of moving people and freight around New Zealand. KiwiRail needs to operate efficiently but it does not need to make a profit.

Chuck the SOE model out the window and with it the excessive salaries of top executives. Clearly paying close to $1 mill a year to the CEO and a similar amount to another half dozen or so senior managers does not a profitable enterprise make. It’s money that could be better spent on training apprentices, for example.

Lesson number two: if the government is going to throw $1 billion dollars at our rail network, throw it around here, not at off shore manufacturers. Make sure the full $1billion stays in New Zealand creating jobs for New Zealanders and being fed back into the local economy.

If nothing else, New Zealand manufacturers would be able to drip feed new rolling stock into production so that any faults can be identified early in production without whole batches having to be removed from service to be fixed. An added bonus is that the workers at the (now closed) Hillside Workshops can recognize asbestos when they see it and know not to go anywhere near it, much less use it in new rolling stock.

The final lesson: do not reprivatize. Under no circumstances sell off our rail network again. That is why KiwiRail is in the mess it is in. Previous private owners ran down the network and sold off anything that wasn’t tied down. Our rail network is an essential public asset. Let’s take that on board for once and for all.

New Zealand needs an efficient, effective, and accessible railway network now, and more importantly, in the future. The Alliance Party has no quibble with government money being spent on rail. What we can’t stand is government money being wasted when it could be used to improve both our rail system and our economy.

We are told the company is now in talks with Treasury about its future. We wait with bated breath, hoping that common sense and the common good will prevail. KiwiRail should be a national treasure.