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KiwiRail faces future with its hand out

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With its fleet of ageing ferries, age-expired locomotives and the need for replacement wagons, KiwiRail is building its case for a large taxpayer investment. David Williams reports for Newsroom.

It was in 2008, an election year, that Helen Clark’s Labour-led government bought back the country’s rail assets under the KiwiRail banner.

Finance Minister Michael Cullen said at the time that during negotiations with the previous owner, Toll, it become clear that buying the rail operating business, including the inter-island ferries, was the best way to increase investment in the industry. Running a commercially viable business would prove extremely difficult without government support, he said, adding: “In the months ahead, I will explore options for significant investments in new, modern rolling stock.”

Instead, Labour lost that election and the global financial crisis kicked in, leading to years of public sector belt-tightening under Prime Minister John Key. Yet, despite all the rhetoric about roads – especially those of national importance – the National government pumped billions into rail. According to The Listener, the previous government spent about $2.1 billion on network maintenance and upgrades, and $1.4 billion for commuter rail upgrades in Auckland and Wellington.