BUDGET 2014: Power company sell-off proceeds reach Kiwirail, irrigation schemes

The government has sprinkled the proceeds of its $4.7 billion assets sales programme across projects ranging from housing developments to irrigation schemes and an increased bailout for state-owned Kiwirail.

Some $1 billion of the money, held by the Future Investment Fund, has been allocated in the 2014 budget, including $67 million for a new Grey Base Hospital on the West Coast and $172 million earmarked for upgrading and building schools.

Unprofitable Kiwirail is the single biggest recipient, getting $198 million for its turnaround plan while $75 million is set aside as a Christchurch housing contingency. The government is also allocating $40 million to Crown Irrigation to invest in irrigation schemes and Housing New Zealand's Hobsonville Land Company, which has a residential development north of Auckland, gets $31 million.

Gross proceeds from the sale of shares in MightyRiverPower, Meridian Energy, Air New Zealand and Genesis Energy came in below the original estimate of $5 billion to $7 billion, partly reflecting the decision not to sell the financially troubled coal miner Solid Energy.

The allocation announced today brings the total to about $3 billion over three budgets and leaves $1.68 billion in the fund.

(BusinessDesk)

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