National setting Kiwirail up to fail

Kiwirail is laying off 181 workers despite its freight business growing by 25 per cent in two years, showing how unrealistic the Government's Turn Around Plan for rail is, says Labour's transport spokesperson Phil Twyford.

"Kiwirail CEO Jim Quinn said today the freight business had grown 25 per cent. If Kiwirail is doing that well but it still needs to lay off 181 workers to meet Government financial targets, then something is wrong with the targets.

"Kiwirail is getting rid of track workers, and deferring maintenance of its network so it can save $200 million. This is crazy. Improving the state of the network is exactly what Kiwirail has to do to reduce journey times and compete more effectively with long haul trucking.

"The Turn Around Plan, which was written before the Christchurch earthquakes and the worst of the economic slowdown, requires Kiwirail to find $4.75 billion for capital expenditure. So we have this absurd situation where Kiwirail is cutting capital expenditure, so it can meet the Government-imposed targets for funding its capital expenditure.

“The Turn Around Plan must give Kiwirail the room to invest in its network. If the Government can find $12 billion for uneconomic roads it can provide support for our embattled railways.

"The bad news keeps rolling on from Kiwirail. The organisation has had a string of procurement problems with Chinese-sourced locomotives and wagons, and rotting rail sleepers from Peru.

"It is trying to flick off the Hillside workshops which should be a vital source of support. And now it wants to sell off TranzRail.

Labour’s Dunedin South MP Clare Curran says Mr Quinn appeared to brush aside the cost of repairing the imported locomotives and wagons.

“Jim Quinn has glossed over the serious flaws in the imported wagons and locos but it will cost $250,000 to repair each loco, which is $5 million in total. Kiwirail can barely afford that, we need to know if their warranty covers it.”

Phil Twyford says “If it continues the way it is going, then you have to conclude National is setting Kiwirail up to fail.”