KiwiRail's assets have been written down by more than $6 billion as part of a major restructure, but the Prime Minister insists the move isn't being done with a view to selling the rail company.
As part of KiwiRail's long-discussed turnaround plan, the Government is writing down the value of the state owned rail company's land and network assets from more than $13 billion to $6.7 billion, to put it on a firmer commercial footing.
A key part of the restructure is New Zealand Railways Corporation holding 18,000 hectares of rail network land, which it will make available to Kiwirail, while Kiwirail's ferry and rail infrastructure and rolling stock will be transferred to a new state-owned enterprise.
Kiwirail's chief executive, Jim Quinn, insists the restructure is effectively a paper transaction which won't affect the company's staff or customers.
And Mr Key says the rejig is a step towards putting the company on a more commercial footing with the aim of allowing it to fund its operations on a commercial basis.
It is not an indication the Government wants to sell off the company, he says.
"It's not something there is likely to be a lot of appetite for ... the Government has written it down in the books at what is a realistic value, Labour bought it marked it up by billions and billions of dollars; it was never real.
"In fact it's cost us a better part of a couple of billion dollars to recapitalise what was a very expensive and over priced asset that the Labour Government bought."