Billion dollar KiwiRail now worthless, says English

KiwiRail as a business is just about worthless, Finance Minister Bill English said today when he accused the previous government of failing to fund the commitments it made to the network.

He said the Labour government, which bought the railway from Toll and renamed it KiwiRail, had made a string of commitments which added up to about $3 billion but it allocated only about $120 million.

"The Government is now the owner of a business which probably has no value, in fact negative value, having just eight months ago paid almost a billion dollars for it," Mr English said in Parliament.

"We will have to keep this business and try to make it work, because no one in their right mind would be prepared to pay anything like what the taxpayer put into it."

Mr English said the Government had decided to invest $39.9 million on 29 new passenger carriages for the TranzScenic route and $75 million for 20 new locomotives.

"We believe this will help lift its performance on tourist routes and its freight business," he said.

Mr English said the Government was going to be "much clearer" with KiwiRail's board and expected answers to questions on what subsidies would be spent on.

The Government announced the locomotive deal on Monday, saying they would be bought from China.

In Parliament today Labour MP Trevor Mallard said Malaysia bought 20 of the same model locomotives eight years ago and today only five were still running.

Mr Mallard said they could have been built at the Hutt workshops using the same German engines that were going to be used by the Chinese.

- NZPA

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