KiwiRail's six-month $33.7 million loss is a big improvement

Friday, 28 February 2020

KiwiRail chief executive Greg Miller said the company was in a 'watershed' year of change.

KiwiRail has made a loss of $33.7 million in the six months to the end of December.

But the loss was a cause for celebration for the state-owned enterprise as it was better than the $104.6m loss in the same period in the previous year.

Coastal Pacific KiwiRail passenger service between Christchurch and Picton via Kaikoura.

KiwiRail group chief executive Greg Miller says: 'We are pleased we have held the revenue line in a difficult environment that included an economic downturn in multiple markets, along with natural events that damaged the network.

'Despite these challenges, we saw our import/export business grow by 5 per cent compared to the previous half year.'

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Miller also celebrated a big decrease in the number of collisions between trains and private vehicles crossing train lines.

'Our latest figures show that last year had the lowest number of collisions between vehicles and trains on record, with 12 collisions in 2019 compared to 25 in 2018,' he said.

Challenges faced by the rail operator included lower freight volumes, fewer passengers making train journeys, as well as the unexpected eight-week line closure at Omoto due to slips.

'Looking ahead, we expect market challenges to continue into the second half of year,' he said.

'KiwiRail will be affected, as are other New Zealand transport, import and producer companies, by the effects of Coronavirus.'

This is what KiwiRail's $40 million Intermodal Freight Hub Master Plan for Palmerston North will look like.

KiwiRail was in a transitional phase, Miller said.

'We're making good progress, but we are still dealing with the results of many years of underinvestment that has limited our ability to continue to provide the services our customers need, and to realise the full potential and value of rail.

'This is a watershed year for KiwiRail, as we start the transformation of our business,' he said.

The Government has committed around $1 billion to invest in Kiwirail, with Deputy Prime Minister Winston Peters telling Parliament in May last year: 'After 155 years of rail in New Zealand, the historic misstep of privatisation and the managed decline of the past decade, securing these assets for the future is especially gratifying.'

Miller said highlights of the six months to the end of December included

Highlights for the half year included the announcement of a $94.8m Provincial Growth Fund investment in September 2019 to do maintenance and remedial work to the Northland line, and the launch of the design for a new Palmerston North road-rail freight hub with $40m funding from the fund.

KiwiRail also appointed naval architects and ship brokers to secure new ferries to ply the interisland route, to be paid for with $35m of government funding.

The rail company also began work on double-tracking the Hutt Valley line between Trentham and Upper Hutt, to increase the number of trains that can be run.

The company also took delivery of the first 450 wagons in a project to replace its rolling stock.

'The Government has made a huge commitment to rail, and the investment that is being made in our network and in our rolling stock will position us well to meet the current and future demand of our customers,' Miller said.

'This investment is key to giving KiwiRail a pathway back to profitability by enabling customer growth,' said chairman Brian Corban.

Later this year, KiwiRail, on which 35 million commuter trips are made each year on metropolitan lines, will begin to operate a passenger service from Auckland to Hamilton.