KiwiRail responds to claims from Federated Farmers

19 July 2012 1:01PM


KiwiRail is disappointed in claims being made  that the rail business  is  "...handing  Fonterra everything it wants...".

Federated Farmers provincial president Ivon Hurst has been quoted as saying KiwiRail is "...handing Fonterra everything it wants on a publically subsidised silver platter’’.  

The comments follow the withdrawal from Timaru of the Maersk and Hamburg Sud shipping lines.

KiwiRail’s General Manager Freight, Iain Hill says the comments are  inaccurate and misleading.

"There is no special deal with Fonterra.  Our relationship with them, as indeed with all our customers, is an appropriately commercial one.  As a line-haul provider, KiwiRail moves what we are contracted to by our customers at commercial rates.  Our pricing decisions, are based on the volumes carried and the costs incurred in performing services for our customers, which invariably reflect the distance travelled by rail.

"Our assumption is that Fonterra’s decision sometime ago  to export products  via fewer  sea ports was based on the end to end costs  and efficiencies across their entire supply chain, and not simply the domestic leg within New Zealand.

"KiwiRail’s role is to move with the market by providing the capacity the market demands at a sustainable price.  It is for our customers to decide where they will route their product and we will be the beneficiaries of those decisions if we are efficient, effective and competitive."


Media Contact: Jenni Austin, Senior Communications Advisor, 021 961 495