Winston Peters calls for KiwiRail's managers to be sacked

  • 11/07/2015

The only way to save KiwiRail is to clean out its board and management, says Winston Peters.

The NZ First leader says it's time to bring in people who understand the transport industry.

Treasury thinks the state-owned company is too expensive to maintain and suggested to the government before the last budget it's entire freight network should be closed down.

The government decided to give it another $400 million to cover the next two years, but warned that level of support wouldn't continue.

Mr Peters, a frequent critic of the ferry service KiwiRail runs, says all the managers linked to the Aratere's problems should be sacked.

"They have squandered probably $100 million on the lengthening of the poorly performing Aratere, and endless repairs to that ship and the Stena Alegra," he said.

KiwiRail says it has heard the government's message and is committed to increasing revenue and reducing costs.

"The company really does have to make changes and the question is which changes it makes," spokeswoman Joanne Black said on Radio New Zealand.

She says it's too soon to talk about job losses.

"But $200m a year from taxpayers is a lot of money and the government says it can't go on, so things simply do have to change."

In a March 2015 cabinet paper, the government said KiwiRail had presented it with two options: retain most of the freight network and rationalise unprofitable services, or close most or all of the freight network.

Treasury said it believed the net social cost of continuing to support KiwiRail was between $55m and $170m a year.

It recommended a one-year funding commitment for KiwiRail while a comprehensive public study was undertaken into the potential impact of closure.

However, Treasury said if closure or partial closure wasn't pursued then it supported a three-year funding commitment.