29 Sep 2009

KiwiRail plans for future without subsidies

8:54 pm on 29 September 2009

KiwiRail's chief executive says the viability of some branch lines will depend on whether the company can get more use out of them.

Jim Quinn says every part of New Zealand's rail network is being evaluated as the company prepares to operate without $90 million of government subsidies.

Mr Quinn says KiwiRail needs to make improvements to the network now, in order to attract future funding.

That includes deciding whether to keep using little used lines and improving its services for freight carriers.

Transport company Mainfreight says it would double the amount it spends moving cargo on the railways if the service was better.

The freight company spends more than $20 million per year on rail, but says it needs more rail services to be able to move more freight off the roads.

Transport Minister Steven Joyce wants KiwiRail to move to a more commercial footing and Mainfreight chief executive Don Braid says his company would expect to benefit from that.

Mr Braid says he would also like to see more business professionals than politicians on KiwiRail's board.

The previous Labour-led Government paid $690 million for KiwiRail in July 2008. Four months later, the Treasury issued a valuation showing it was worth $448 million.