KiwiRail chair Greg Miller has been named chief executive of the state-owned rail operator after the company said an international search failed to find a candidate with sufficient breadth of experience.
Miller only joined the board in November. Prior to that he was managing director of logistics operator Toll New Zealand.
Acting chair Brian Corban says the appointment, effective immediately, sends a strong signal of the positive change occurring at KiwiRail. Chief operating officer Todd Moyle has been acting chief executive for the past six months.
"The board is delighted to have secured a leader of Greg's ability," Corban said in a statement.
"We are setting up a management team and board which will take the organisation through this important next stage and we have found a leader with an unrivalled set of global experience in supply chain, a history with rail, domestic transport expertise, and who has led companies through significant growth and transformation.
"We will all work closely together as several major projects now come to fruition, including the replacement of KiwiRail's Interislander ferry fleet, the need for a major rolling stock replacement programme and new initiatives such as the reopening of the Napier to Wairoa line, an $80 million investment in our tourism services and a new multi-modal hub in the Palmerston North region."
KiwiRail, bought back from Toll by the government in the former Labour government in 2008, has been hamstrung for decades by a lack of capital to maintain the country's 4,000-kilometre track network and invest in new engines and more flexible rolling stock to remain competitive.
Aging trains and tracks have seen speed restrictions placed on many routes, further reducing the competitiveness of freight services.
The previous National-led government provided additional capital in two-yearly blocks. The Labour-led coalition has provided additional capital for new projects and studies – most of it from the Provincial Growth Fund.
Other recent funding has included $40m for the upgrade of the company's Coastal Pacific tourism service on the South Island. The company is also working on a business case for a new spur line to Marsden Point and an extensive upgrade of the Auckland-Whangarei rail link.
Corban was a founding director of KiwiRail in 2008 and rejoined the board last year.
Miller, whose appointment last year was driven by coalition partner NZ First, is of Nga Puhi, Ngai Te Rangi, and Rongowhakaata descent. He ran the Toll business from 2008 and before that ran Tranzlink International, a subsidiary of KiwiRail forerunner Tranzrail.
Miller says he has "enormous faith" in the KiwiRail management. Moyle had done an excellent job and the pair have a "fabulous" working relationship built on mutual respect, he said.
Wayne Butson, general secretary of the Rail and Maritime Transport Union, said that while the switching of roles by Miller may be unusual, he does have a deep understanding of rail and has developed good relationships with the country's ports through his role at Toll.
Improving rail is a priority for the government and that pace could have been lost if an outsider had been appointed, Butson said.
"You would have probably got very little progress while they learned the business," he told BusinessDesk.
"Our relationship between the union and Greg in the past has always been good and harmonious," he said. "I don't see any of that changing in the coming weeks and months."