20 Apr 2012

Local purchase of rail workshops considered unlikely

8:30 am on 20 April 2012

Heavy engineering companies say they expect little or no local interest in buying KiwiRail's Hillside workshops.

The state-owned enterprise announced on Thursday that it is selling the business because it only has six months of orders.

The Hillside workshops, which employ 123 people, have operated on the south Dunedin site since 1875.

The chief executive of Dunedin's Farra Engineering, John Whittaker, says there isn't enough work and he doubts whether a New Zealand company will buy the plant, because of the investment needed to make it profitable.

"It would be unlikely to be a local engineering company unless there was a lot of support from KiwiRail," Mr Whittaker says. "Certainly the only real alternative, I would have thought, if there's only limited support, would be an international or national buyer of large scale."

The outgoing chair of the Engineering Taranaki Consortium, Peter White-Robinson, says that's unlikely, because heavy engineering is increasingly shifting to Asia.

"It doesn't mean to say that the quality's better or even equal," he says. "In my belief it's certainly not equal to what could be done out of those workshops or out of New Zealand. I just think it's the trend of things and I wouldn't see an international buyer being interested."