05/18/10

Investment in KiwiRail announced today signals a long-term commitment to creating a business capable of standing on its own feet financially, KiwiRail Chief Executive Jim Quinn said today.

"Today's announcement enables us to invest in our business in a way that our predecessors haven't been able to in a long time," he said. "It will allow us to demonstrate to our customers that we have been listening to them and we understand what they need from us.

"Our customers have been telling us they would consign more goods to rail if transit times were more relevant and the network more reliable. We know too that rail will have an important part to play in moving the growing volumes of freight traffic over the next 25 to 30 years.

"The key to achieving the goals set out in the ‘turn-around plan' we provided to Government before Christmas is growing traffic volumes and revenue. Rail already carries a third of all export goods and excels in moving heavy traffic.

"We are confident that with improved infrastructure and rolling stock we can also carry more of the domestic goods that largely travel from Auckland, down the North Island to Christchurch and destinations in between."

Mr Quinn says one of the central elements of the plan is the need to maintain a connected network rather than reverting to a series of ‘short lines'.

"However, that doesn't necessarily mean that the network we operate at the moment will remain the same. We will review the minor lines and ultimately, unless they have an anchor customer or there is a compelling public good reason for them to stay open, they will be closed or moth-balled.

"While the emphasis is on freight growth, we will also be looking to grow our long-distance passenger business and to partner with regional councils in Auckland and Wellington to provide integrated public transport systems that meet urban passenger needs while ensuring transparency of costs."

The investment announced today for KiwiRail will have long term benefits for the New Zealand economy because it will restore rail's effectiveness as a transport mode, KiwiRail's Chairman Jim Bolger said today.

Mr Bolger is currently on business in the United States and couldn't attend the Government announcement of long term investment in the rail business.

"I am delighted that the Government has accepted the case for investment in rail that the KiwiRail board put forward," he said. "It is the fulfilment of 18 months of intensive work.

"Rail has natural advantages for carrying certain types of freight and also for moving large numbers of people in congested cities.

"Rail has struggled for settled ownership and long term vision for many years. Today's announcement provides the certainty needed to enable it to contribute more effectively to New Zealand's economic growth."

Ends

Click here to download an overview of KiwiRail's ‘turnaround' plan

Category: KiwiRail Group

Posted by: Aroha Tanirau

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