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Key says asset sales not on agenda

Fuseworks Media
Fuseworks Media
John Key
John Key

Wellington, March 22 NZPA - Prime Minister John Key says there are no plans to sell KiwiRail.

It seemed former National Prime Minister Jim Bolger's job at KiwiRail may be at the end of the line yesterday, after Transport Minister Steven Joyce said its governance needed refreshing.

That prompted Labour to say the Government was laying the groundwork for privatisation.

A previous National Government sold off the rail but Labour bought back the track network in 2003, then in July 2008 purchased Toll NZ Ltd, renamed it KiwiRail and appointed Mr Bolger chairman.

Mr Bolger's original one-year term was extended for another year.

National disagreed with the decision to buy Australia's Toll Holdings saying the $690m price was far too high and less than a year later the rail assets were valued at $349 million.

Mr Joyce was asked on TV3's new political show The Nation at the weekend to confirm that Mr Bolger would not be reinstated when his term expired in June.

"The governance of KiwiRail is the responsibility of my good friend (State Owned Enterprises Minister Simon Power) but we are looking at refreshing the governance."

Asked to clarify he said "my understanding is that we're looking at renewing the governance but that's for Simon to announce".

This morning Mr Key would not say if Mr Bolger would be reappointed or not but repeated his Government's policy of not selling any state-owned businesses this election cycle.

If it was to be done in future National would campaign on it but he doubted KiwiRail would be a priority.

"Even if we did quite frankly I wouldn't see KiwiRail as a high prioriy," he told Newstalk ZB.

In another interview on TV One's Breakfast programme he said Cabinet nor Caucus had discussed selling it.

"Beyond 2011 if we decide to have partial sales for instance we would campaign on that. We haven't made that decision."

He doubted there would be much interest if sales were decided on.

"Who would buy it in its current form? Given the capital investment that's required, this is not a simple business for someone to pick up, there's a price at which anything can be sold but that's not on the table at the moment."

Mr Key said KiwiRail needed a lot of work to get back into financial viability.

"Essentially the previous government bought something that was completely over-valued, it didn't have a credible business plan to work, and there's literally billions of dollars of shortfall now that we are going to have to fund so the taxpayer's going to get a return for that and that's the aim...

"With a large amount of investment both the company taking debt and the Crown putting in investment over a period of time you could see it returning to profitability but its a big ask."

Mr Key praised Mr Bolger's record.

"Jim's done a tremendous job for New Zealand, when he served us as ambassador, as I think an outstanding Prime Minister of New Zealand and on SOEs but whether he continues with KiwiRail is a different issue."

A spokesman for Mr Power yesterday would not confirm the possibility of letting Mr Bolger go.

"Changes to the whole SOE portfolio are being made in early April and its not our practice to announce changes to individual boards ahead of those six monthly announcements."

The spokesman said every year there were some changes as terms expired and some people stood down or were not reappointed.

Last year there was some speculation that former Labour deputy leader Michael Cullen would take over Mr Bolger's role as chairman of NZ Post. Dr Cullen was made a deputy when he resigned from Parliament.

Mr Bolger, via a KiwiRail spokesman, referred requests for comment to Mr Power.

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