KiwiRail spins its line

KiwiRail has been forced to admit it has placed on hold a second order of 20 Chinese-built locomotives.

In March, KiwiRail denied to NBR ONLINE in an email that there were any significant problems with the Chinese deal.

But staff at KiwiRail have been concerned about the numerous engineering problems for months.

The extent of the problems were revealed by Dunedin MP Clare Curran after she requested information under the Official Information Act about the first batch of 20 Chinese locomotives and 500 wagons.

Today, KiwiRail revealed production is on hold for a second order of 20 locomotives worth $62 million until the problems are ironed out.

Just two weeks ago, a senior public relations consultant employed by KiwiRail phoned to complain an NBR story revealing the problems was out of context.

Senior communications adviser Jenni Austin said the problems were simply the kind of thing that would be expected during a “commissioning phase” and they were not a continuing issue.

Reports today confirm the problems are significant, unprecedented and affect both the locomotives and wagons.

One of the emails NBR received in March stated:

“We have not cancelled the 2nd order for 20 DLs. This has been placed and we expect delivery to begin from early next year.” 
 

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12 Comments & Questions

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You get what you pay for. Nobody ever regretted buying quality. Plus If they had been made here it would have kept people in work paying taxes.

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I agree.

Several years ago, railway sleepers made in China were 75% of the price of NZ made sleeperes, but the quality is far worse (i.e. more rejects).

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Kiwirail - welcome to the real world of trading with China.

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Sounds like Kiwi Rail are doing exactly what they should be doing - screwing the supplier into providing a quality product at the lowest price.

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Only one problem they are getting a cr*ppy product that was designed to last five minutes.

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Welcome to the world of who can spiral downwards the fastest! The NZ built proposal was more expensive than the Chinese deal Kiwirail went for but nor was it too far off the mark. The NZ built product invariably would be working as designed as opposed to what is happening now. Come on decision makers don't be afraid to pay a fair price for something - the lowest price can come at great cost!
Mal - I think you are off the mark as it seems Kiwirail have gotten the lowest price and the questionalble quality - who is that good for?
Life is not always about the lowest price - is it? Today I spent $99 on a Blunt umbrella (I think as featured in Time Magazine) where I could have spent $12 on the cheapest one in store. I expect the Blunt to last me at least 15 years or so and the $12 one.....well who knows, one blast of wind and its shredded so maybe a year. Tell me Mal did I make a good choice?

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The KiwiRail purchase of Dalian Locomotive and Rolling Stock Company equipment was the first sale to a "developed" country that Dalian had ever made. I guess it will be some time before another "developed" country gets suckered

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It is obvious that the bosses at KiwiRail have never heard of third party independent engineering inspections like Transpower and Contact Energy use for major offshore purchases.
Having an such an independent inspection team at Dalian could well have averted this mess at the top of the cliff rather than picking it up at the bottom. The Government owners should mandate these inspections as a key part of future buying processes. Otherwise it is better to buy local and pay a premium.

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I wonder how much Claire Curran and the Labour Party received in donations from the unions at the Hillside workshops towards her/its election campaign in 2011.

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Why was proper due diligence not done on these Chinese manufacturers/suppliers? Heads should roll. It would appear that none of these bureaucrat decision-makers have an ounce of business accumen between them, lest of all, understand the concept that the price is forgotten long after the quality remains.

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I think people are ignoring another option. Building locomotives in New Zealand is just uneconomic in terms of time of delivery and scale of operations. The United States have been building good quality locomotives for decades - just look at the GE products still being used by KiwiRail. The simple answer here is that you get what you pay for. Buying US made locomotives would have made better sense to me - time tested, operated by the biggest railway companies in the world and well proven to work in the New Zealand environment.

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The history of chinese products for kiwirail and toll before that has been nothing to write home about. All of them have had problems....and remember the sequence of events. Saturday Mr Joyce and Mr Key ride on the new locos and meet delegation from CNR. Monday and Patsy falls on her sword over husband's rail dealings with CNR and Hillside loses a big wagon contract to CNR. Bit like Kim Dotcom, just an extraordinary coincidence.

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