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Monday, 11 January 2021, 7:38 am
Kiwirail’s future as a commercial state-owned
enterprise (SOE) may be numbered in the wake of the impact
of the Covid pandemic, a government document suggests.
Ministers have asked the Treasury and the Ministry of
Transport to consider Kiwirail’s “entity form”, a
briefing paper released by Treasury on Tuesday Dec 15 2020
stated.
The report states “Public benefit
expectations and public funding of KiwiRail are increasing
and so the SOE Act may not provide sufficient levers to
achieve ministers’ ownership objectives for KiwiRail,”
the department advised.
Treasury said it wanted to
engage with ministers about its objectives and priorities
Kiwirail spokesman Simon Kilroy said it had no comment at this stage. “The review is being conducted by the Ministry of Transport and Treasury.” The company, which employs 3900 staff, reported a net loss of $228 million in the year to June 30, which followed a $325m loss the previous year – though it did achieve an operating profit of $40m. Chairman Brian Corban said in November that the Covid pandemic had had a significant impact on KiwiRail’s bottom line but “rigorous operational changes and cost savings measures had helped stabilise the business”. As a state-owned enterprise, KiwiRail was required under the State-Owned Enterprises Act to be as profitable and efficient as an equivalent company that was not owned by the Crown, Corban noted in its annual report.