Serco boss admits interest in NZ's rail services

  • 29/08/2015

Serco is looking at new opportunities in New Zealand, particularly in operating rail services, according to chief executive Rupert Soames.

The UK-based company provides a range of services to governments and there has been speculation it is interested in managing social housing in New Zealand.

The company has contracts to operate the Mt Eden Corrections Facility and Auckland South Corrections Facility but is mired in controversy after allegations of fight clubs at Mt Eden prison.

Mr Soames, grandson of Sir Winston Churchill, told The Nation programme today the company was looking at other opportunities in New Zealand, including rail services.

Auckland Transport said in April it had shortlisted three companies that would be invited to tender to operate passenger rail services from July 1, 2016.

They are Serco NZ, Transdev Auckland and state-owned KiwiRail.

Transdev has been operating the Auckland Metro rail services since 2003.

On Friday, KiwiRail said it improved its earnings before interest, tax, depreciation and asset impairments to $91 million in the year to June 30, 2015, 17 percent ahead of the previous financial year.

After depreciation and writedowns on the value of the rail network KiwiRail owns, the state-owned enterprise reported a net loss of $167 million for the year, a 33 percent improvement on last year's loss.

KiwiRail is locked in negotiations with government ministers and the Treasury on initiatives to establish the national value of its operations, since it cannot be expected to make a profit in the long term because there is too little freight in New Zealand to fully cover the cost of the 4000km network of tracks.