28 Sep 2009

Closures of branch railway lines possible

8:00 pm on 28 September 2009

KiwiRail managers are considering closing unprofitable branch lines.

But they stress no decisions have been taken and several options are possible.

KiwiRail has publicly admitted it expects no state operational subsidies from next year onwards.

That loss of $90 million annually and a predicted decline in capital grants, is forecast to push KiwiRail from a net cash surplus of $44 million to a net cash deficit of $306 million in three years.

Company managers are working on how to deal with this, but are giving no details.

An Australian report this month suggested closing unprofitable branch lines, such as the little-used Napier - Gisborne line.

Company managers will say only that all options are on the table, but are known to be averse to big increases in freight costs.