English: KiwiRail will keep costing Govt

  • 25/08/2015
Finance Minister Bill English (Simon Wong)
Finance Minister Bill English (Simon Wong)

The Government will have to continue pouring around $200 million a year into KiwiRail if it wants to keep the struggling state-owned rail operator going.

Finance Minister Bill English says KiwiRail hasn't been able to generate the levels of income it was supposed to as part of the 10-year, $1 billion plan to turn the business around.

"That's posed ongoing challenges," Mr English told reporters today.

"They've found it very difficult to reach targets for growing their business."

While some of it is explainable, with weather-related infrastructure problems and issues with customers like Solid Energy, some of it means further work needs to be done.

"If you want to have rail, it looks like it's going to cost a couple of hundred million dollars every year," he said.

However, Mr English said the Government is committed to KiwiRail and it's clear New Zealanders want to keep it.

In May's Budget the Government committed to ploughing another $400 million into KiwiRail over the next two years.

But Mr English warned at the time that that level of ongoing support was not sustainable and KiwiRail had to improve its performance.

NZN