Government hints at KiwiRail overhaul as company under review

An overhaul could be on the cards for KiwiRail with the Government announcing it will launch a review of the state-owned rail company.

Treasury and the Ministry of Transport will carry out the review, which Transport Minister Simon Bridges says is aimed at looking at the long-term role of rail in New Zealand and how to make sustainable.

Mr Bridges says the review will focus on ensuring KiwiRail is on an even footing when it comes to funding, which is currently separate from the National Land Transport Fund.

"It's basically about having a long-term, transparent, sustainable model for KiwiRail," he says. "We want to have a really good look at that and put them on a good even footing."

That could mean KiwiRail will be allowed to apply for funding from the Ministry of Transport, in the same way other infrastructure programmes and local authorities can.

Currently KiwiRail's funding comes directly from the Government, which has totalled nearly $5 billion since 2008.

Another option Mr Bridges hinted at was removing the requirement for KiwiRail to be commercially viable and to make a profit, which it is required to do by law.

"One of the issues with KiwiRail is that it's a state-owned enterprise and by definition, state-owned enterprises are there to make money," he says.

The exact nature and terms of the review will be released in the next few weeks.