5 Apr 2011

KiwiRail boss confident of future

5:54 pm on 5 April 2011

KiwiRail says its long-term future looks good, even if its current position is very difficult.

Chief executive Jim Quinn expressed confidence in the state-owned company at a rail development conference in Wellington on Tuesday.

KiwiRail has revised down its forecast earnings (ahead of interest, tax and other charges) from $120 million to $105 million for the year.

It blames most of this on the earthquakes in Canterbury in September last year and February which has dried up tourism, and the Pike River mine disaster, which has halted many coal shipments.

However, Mr Quinn says the long-term outlook is different, with total revenue forecast to increase three-and-a-half times in the next decade.

Mr Quinn says this can be achieved by in various ways: from convincing freight customers to make rail their first choice, to having larger wagons with more stock.

He said revenues from freight would double in 10 years.

The predicted improvement will be assisted by a $750 million grant from the Government and would contrast with decades of economic under-performance by New Zealand's rail network.

On Monday, KiwiRail announced the suspension of TranzCoastal service until August due to the Christchurch earthquake.