25 Aug 2012

KiwiRail plan revealed: $200m must be cut

11:15 am on 25 August 2012

KiwiRail's business plan reveals the state-owned rail company needs to cut $200 million from its spending over the next three years.

The company has withdrawn the injunction it brought against Radio New Zealand and made details of the plan public.

It says the cut in spending means there will be greater risk of disruption to the rail service and that the risk of the asset failing will also grow.

Transport Minister Gerry Brownlee says despite that, safety on the country's rail network remains the primary factor in running the system.

Mr Brownlee told Checkpoint KiwiRail is spending hundreds of millions of dollars on its network over the next three years and he's not worried by the report.

He said KiwiRail has assured the Government it will not compromise the network's safety, and he says the Government itself will not back any plans to skimp on safety and put people at risk.

Chief executive Jim Quinn says the company never had anything to hide about the business plan, but told Checkpoint it was never intended to be in the public domain, as it could be interpreted as alarmist or concerning.

Mr Quinn also dismissed concerns about the cut in spending. "In terms of our network, we have reduced our network spend over the next two or three years by $200 million. That is not to say we are going back to the bad old days where the business was not invested in."

Heavily criticised for gag

The company was heavily criticised for attempting to gag reporting on the plan.

It was granted an interim injunction against Radio New Zealand on Wednesday night and then warned other news media organisations and the Labour Party on Thursday that effectively they, too, were bound by the injunction.

Labour leader David Shearer says it is outrageous KiwiRail used taxpayers' money to try to gag the news media. He says the public had a right to know what's going on inside the company and it's totally unacceptable for it to bully news organisations.

The plan was revealed by Mr Quinn at a news conference in Auckland early on Friday afternoon.

Minister blocked tabling of report

Labour MP Phil Twyford asked Mr Brownlee in the House on Thursday whether he'd been advised that KiwiRail would decline from 2014 and that the rail network would take many years to recover.

Mr Brownlee replied that KiwiRail was working hard to upgrade the network after years of neglect, and plenty would be spent on maintenance in the coming years.

When the minister then blocked the tabling of the report, he was accused by opposition MPs of helping KiwiRail to hide information.

Mr Twyford said attempts to block Radio New Zealand from reporting the contents of the report amounted to a cover-up.