Mainfreight throws weight behind KiwiRail, laments lack of national transport strategy

Mainfreight [NZX: MFT] chairman Bruce Plested has criticised what he says is the government's lack of a national transport plan, throwing his support behind state-owned rail operator KiwiRail and calling it an integral part of the infrastructure.

Speaking to shareholders at today's annual meeting in Auckland, Mr Plested said the government and the Treasury had treated rail appallingly since it was sold in 1992 and repurchased in 2006, and that policymakers lack a strategy for transport infrastructure considering road, rail and ports.

"Without rail, our opportunities for passenger transport are restricted, our desperation for more roads intensifies to the point of impossibility, and our options for port locations become hopelessly restricted," Plested said. "How on earth could the Treasury not see these connections, and our government not see the need for an overall strategy?"

Plested, who last year donated $35,000 to the National Party and $100,000 to the Maori Party, was responding to Treasury advice to the government this year recommending closing major parts of the rail network.

Earlier this month, fellow Mainfreight director Richard Prebble, who oversaw widespread job cuts when he was railways minister in the 1980s, wrote an opinion piece in the New Zealand Herald newspaper urging officials to reassess the cost of forcing freight to use roads and the congestion it would cause.

Managing director Don Braid said the company was a strong supporter of rail, with current and future roading not capable of meeting Mainfreight's needs, according to presentation slides accompanying his speech.

Mr Braid said the company wants more positive support for long-term rail infrastructure, and Mainfreight is continuing to invest in facilities at or near rail-serviced property.

Plested also questioned the need for New Zealand's dozen ports, which "allows the overseas shipping companies to play them all off against each other for price and service, mostly while the local ratepayers provide the ports' finances."

New Zealand's biggest ports are racing to tie up the nation's flow of freight, via inland hubs, alliances and partnerships with transport companies and smaller port operators.

Mainfreight expects short-term earnings to come under pressure in Australia where the economy is stalling and is seeking to improve margins by cutting costs. Over the longer term, the company sees growth across all markets, with high expectations in Asia, the US and Europe. The company flagged it will probably need capital investment in Europe and the US over the medium term.

The shares fell 0.5% to $15.12 and have decreased 4.4% this year.

(BusinessDesk)