Taxpayers will provide a further $250 million to KiwiRail as part of a $4.6 billion “turnaround plan,” Transport Minister Steve Joyce announced this morning.A further $500 million would chase the initial investment over the succeeding two year
Taxpayers will provide a further $250 million to KiwiRail as part of a $4.6 billion “turnaround plan,” Transport Minister Steve Joyce announced this morning.
A further $500 million would chase the initial investment over the succeeding two years.
The pre-budget announcement follows anger after the state-owned company last week said it would not tender for a $500 million contract to build Auckland’s new electric train fleet.
Mr Joyce said the $4.6 billion plan was designed to see the rail freight business become sustainable within a decade by getting it to a point where it funds its costs from customer revenue.
“In fact, the lion’s share of the $4.6 billion will come from the business itself,” he said.
Last month Mr Joyce said the company had worked for several months on its turnaround plan, which was reviewed by the Treasury and advisors.
“The government is committed to retaining and improving the rail freight network and is providing KiwiRail the capital investment to demonstrate it can become commercially viable and make a valuable contribution to the New Zealand economy,” he said.
KiwiRail needed to focus on bulk and long distance freight – areas where it was thought it could increase revenue.
The full 2010 budget will be announced on Thursday afternoon.
