State-owned KiwiRail confirmed today that it will not bid to build $500 million worth of new electric trains for Auckland, prompting the Rail and Maritime Transport Union to call on Prime Minister John Key to intervene.KiwiRail chief executive Jim Quinn i
State-owned KiwiRail confirmed today that it will not bid to build $500 million worth of new electric trains for Auckland, prompting the Rail and Maritime Transport Union to call on Prime Minister John Key to intervene.
KiwiRail chief executive Jim Quinn informed staff at the company's Dunedin-based Hillside Engineering workshops of the decision today and met with Dunedin City Council and Otago Chamber of Commerce representatives.
"I've discussed our decision with each of them," he said. "I've outlined the reasons why building the electric multiple units in New Zealand would be a challenge we couldn't meet."
He said KiwiRail lacked the scale to complete the job on time, and the project was risky because the workshops had never built electric multiple units before.
"We will not be cost competitive in the build process and while $500 million sounds a lot, it is a limited amount of money for this order."
Rail and Maritime Transport Union general secretary Wayne Butson said the decision was a slap in the face to hundreds of skilled rail workers at the Hillside and at the Woburn rail workshop in Lower Hutt. It was defeatism at its worst.
A Berl Economics report commissioned by Dunedin City Council and the union estimated the work would add between 770 to 1270 jobs and $232m to $250m to gross domestic product.
"Rail workers are keen to do this work, and the economic case backs them up," Mr Butson said.
"We are now calling on the prime minister to consider the national interest in this decision and take all steps possible to ensure this work is done locally."
Mr Quinn said the decision was in no way a reflection on the confidence the company had in its New Zealand workshops.
"It is simply a case of needing to use the finite capital we have to rebuild a sustainable railway for New Zealand for generations to come. That responsibility requires us to make the best decisions in each case."
