Wednesday, June 19, 2024

KiwiRail to stay state-owned

KiwiRail will remain a state-owned enterprise following a review by the Ministry of Transport and Treasury.

“This Government has invested heavily in KiwiRail over several budgets to ensure that it is better placed to deliver on the Government’s objectives,” said Minister for State-Owned Enterprises, David Clark said.

“As a state-owned enterprise, KiwiRail will be best placed to participate in several competitive markets, including freight both on-land and across Cook Strait.”

He said that since 2017, the Government had invested $8.6 billion to build a resilient and reliable network after decades of neglect and decline.

“Much of this is the bread and butter of our network replacing track, new culverts and bridges, upgraded turnouts, all of which are needed for a safe and effective network.”

KiwiRail will also be expected to enable the Government’s vision for the rail system, as outlined in the New Zealand Rail Plan.

“Getting more people to use the rail network and more freight off the roads is a key part of the Government’s emissions reduction plan. Ministers are also considering the role of rail as part of the New Zealand freight and supply chain strategy, and how we can improve inter-regional passenger rail,” Minister of Transport, Michael Wood said.

“KiwiRail’s operating environment has changed markedly following the Future of Rail review. The wider planning and funding framework has been re-worked, with below-rail funding now being provided through the National Land Transport Fund.”

The review by the Ministry of Transport and Treasury in consultation with the Public Service Commission and KiwiRail found that changes to entity form might be disruptive to the work programme already underway, and that benefits can be delivered effectively in the current entity form alongside continued improvements in reporting transparency and integrated oversight arrangements.

Ministers have also determined that New Zealand Railways Corporation will remain a state-owned enterprise.

“Given the links between New Zealand Railways Corporation and KiwiRail’s activities, there are clear benefits in aligning their entity form and public reporting obligations,” Minister Clark said.

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