10 Jul 2015

Difficult decisions ahead for KiwiRail

11:56 am on 10 July 2015

KiwiRail says it has difficult decisions ahead as it scrambles to save whatever money it can, with its least profitable services in its sights.


Photo: Wiki Commons

In documents released yesterday, the Treasury suggests closing down the state-owned enterprise because it costs too much to run.

Finance Minister Bill English rejected that advice but said ongoing funding at the current level was not sustainable.

KiwiRail is working with $210 million from the last Budget, and will have $190 million in the next - but that is the only committed funding it has.

It said it must make changes; the only question is what those changes are.

A spokesperson, Joanne Black, said while it would be getting ahead of things to talk about job losses, the Government has put KiwiRail on notice.

"Right across the board everything is being looked at because we think we have to find these cost savings and plainly the least profitable services would be the ones that would be looked at the hardest.

"And also ways of reducing some very expensive labour costs in the business as well.

"But those are discussions that have to be had with the staff."

KiwiRail said it was assessing all its operations, including the Interislander ferry service.

The Green Party has called on the Government to provide KiwiRail with more certainty over its future.

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