Key: KiwiRail Not For Sale (Yet) & Hints At Investment Plan


The prime minister says there won’t be any sale of KiwiRail before the next election, and while KiwiRail needs a lot of work, the problem is that already millions have been spent on rail, especially in Auckland so it’s not clear the way forward.

Speaking to Paul Henry on TVONE’s Breakfast, he did hint there was a plan under consideration involving even more large investment in KiwiRail.

“It needs a lot of work because the capital programme to make sure there’s a business plan that can get KiwiRail back into financial viability is a large business plan with huge financial investment.

Pressed further on his plan for KiwiRail, he said he wouldn’t go into detail. “But there is a plan that says, with a large amount of investment, both the company taking  debt and the Crown putting in investment, over a period of time you could see it returning to profitability, but it’s a big ask.

“Behind the scenes, Steven Joyce is working with all of the stakeholders - the unions, but most importantly the customers , saying if you really want this thing to work, actually, you’re going to have to invest in this as well in terms of making sure you support the business.”

Asked if that was the minister’s job to get that closely involved, the prime minister said that KiwiRail was a “turnaround business.”

“Essentially the previous government bought something that was completely over-valued, it didn’t have a credible business plan to work, and there’s literally billions of dollars  shortfall now that we are going to have to fund so the taxpayer’s going to get a return for that and that’s the aim.”

Mr Key repeated that National would not have bought it, but that there would be no sale in the present government term, and he wasn’t sure who would buy it.

“Given the capital investment that is required, this is not a simple business for someone to pick up. I mean there’s a price at which anything can be sold but that’s not on the table at the moment. Now, beyond that, beyond 2011 if we decide to have partial sales for instance we will campaign on that, if that’s the case. We haven’t made that decision, Cabinet and caucus hasn’t discussed it. At some point, we’ll have to make that call.

“The question is what do you do. We’ve got a situation with rail across New Zealand  where we’ve invested so much money. It’s $600m for electrification in Auckland, $600m for double tracking the Western Line, it’s $500m for extra trains up here. You’ve got a major rebuild that’s required of, as I understand it, parts of the national line, particularly the bridges in the South Island.

“The problem is, if you don’t do anything, it doesn’t work properly in which case it’s slow and in which case, you have the freight forwarders quite correctly saying: ‘Look, if you can’t get me a container from, let’s say, Wellington to Auckland faster than I can do it on a truck, then I will put it on a truck.’ ”

Key on TVNZ




  1. Jeremy Harris says:

    Hmm, an interesting week given what Joyce said on Saturday…

    Might we see a new director and large line closure and investment strategy in June..?

  2. John Dalley says:

    Michael Cullen apparently.

  3. Jon R says:

    Amazing that the Nat’s aren’t asking the NZTA to prove how much real benefit the nation is getting by the $11 billion spend on roads.

    Rail around the world is having massive investment in upgrading tracks and faster trains. What are the Nat’s doing? So far NOT ONE SINGLE THING that was not already announced by the previous Govt!

    The Govt. does not seem like one to move the country forward. All we are going to get is a huge debt for decades to come paying for their “Roads of Think Big”. Not a smart move Joyce and Key! Though the Road Transport Forum (trucking lobby) did make massive donations to the National Party to win the last election. So you can see why they are playing the roading card.

  4. max says:

    At least it is pretty plain-spoken, compared to what you usually get. And you don’t have to be Rodney Hide to see that it’s “put up or shup up” (shut down) time for our rail.

    Of course that doesn’t mean we will like National’s rail plans, but at least he seems to be promising to be reasonaby open about what they are doing.

  5. Jezza says:

    I’ll settle for Kiwirail to still be in state hands and not too many line closures till the next change in government…

  6. millsy says:

    This government is really erratic about KiwiRail. We have ones minister hinting at pouring heaps of money into it and giving it the support it needs, then moments later another minister is talking about closing it down.

    I guess we will hear more towards budget day..

  7. anthony says:

    GAH! let a rich american railroad company take over, then they might electfy the entire North Island Main Trunk in an instant!

  8. Jeremy Harris says:

    We tried that, didn’t work…

  9. max says:

    “This government is really erratic about KiwiRail. We have ones minister hinting at pouring heaps of money into it and giving it the support it needs, then moments later another minister is talking about closing it down.”

    Bait and switch? Rail may also be lucky as it is too public - their preference for privatisation may show itself in different areas first (like Auckland).

    I wanted to put a smiley behind the “Auckland”. I can’t. It just isn’t funny.

  10. Luke says:

    Key seems to be misleading people a bit there. By talking about the money from all the Auckland projects, hes made it sound as though rail throughout the country has had piles of money thrown at it, which is of course wrong.

    At least they’re out there talking to the customers though. That has hopefully enlightened them and changed their mind somewhat.


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