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The Transport / Rail Blog
The Transport / Rail Blog
|Posted on February 7, 2016 at 7:11 AM|
In a move not entirely unexpected Kiwi Rail has "announced" to a Parliamentary Select Committee, and as reported by News Talk ZB (See below news item from them), that it is and has been, down sizing its Business and reducing head count overall by 800 people from 4,200 to 3,400.
Many of these jobs have already gone (about 200 or so) as the 4,200 staff number quoted was the headcount some time ago. The reporting of these numbers is therefore a little loose and alarmist and not quite the true picture.
To be clear about another 300 or so of this is due to the fact that Kiwi Rail lost the Wellington Metro operating contract and these employees will transfer to the new successful bidder of this operation - Transdev. It seems the real further redundancies to come is closer to about 300.
Of more note is the frank admission that they intend to get out of rail ferries all together and move to road only ferries - this is not unexpected either.
Next of the list will be the decommissioning of the NIMT electrification. Then may be further line abandonments.
Make no mistake the cuts will keep coming as I have said now for over 4 years on this Blog. See my summary of blog posts below:
It does bring me no joy, of course, to see my opinions and predictions as expressed in 2012 come to eventual fruition but :
"The Economics of Rail in New Zealand are the Economics of Rail in New Zealand" as a senior Treasury official once told me.
And as someone said to me once:
"You can't choose who or what you fall in Love with - it is the way it is" -
And so it is for many, including me, with the dear old New Zealand Railways - but the loss and pain of what has happened and is happening to it is so real to many of us and just plain sad!
But all is not lost - at least Metro Rail investment is really going ahead in New Zealand!
News article as reported by News Talk ZB
Kiwi Rail Announces Job Cuts
Kiwi Rail's making it clear Government subsidies are set to be a permanent part of its business model.
The state owned operator currently runs at an annual loss on its books - an issue that's been the focus of questions at a parliamentary hearing today.
Kiwi Rail's chairman, John Spencer, says the commercial review they undertook revealed every configuration of running a rail network required an ongoing level of Government investment.
"Simply put, there is not enough demand for rail in NZ to generate the revenue to allow the company to be fully self sufficient."
Kiwi Rail has also announced plans to shrink its workforce, indicating around 300 jobs will go in the future.
The plans have been outlined at a Parliamentary hearing this afternoon.
Chief executive Peter Reidy says two years ago they had 4,200 staff, this year they'll have 3,700, and they'll get down to 3,400.
He says they're reducing the cost base in their business because, if they're to help New Zealand reduce the cost of its supply chain, they need to be competitive.
Mr Reidy says there's a business imperative to get more efficient and KiwiRail's not always been as efficient as it could be.
The days of rail carriages carrying freight on KiwiRail's inter-island ferries are also set to be numbered.
The company's looking at the way it shifts its freight across the Cook Strait as it looks to find savings in its operational costs.
Mr Spencer says it's almost impossible to get a rail compatible ferry around the world now, so the company has to pay the cost of doing that.
He says because they're leasing ferries the biggest cost is when you hand the vessel back, as you have to put it back to what it was.
Mr Spencer says they're now working on the basis of not having any rail compatible ferries at all.
And from NZ First, who never seem to miss a beat on political comment full with rhectoric on New Zealand Rail, comes this:
3 FEBRUARY 2016
Kiwi Rail to Use Rubber Bridge to Replace Iron Bridge Across Cook Strait
In another more bizarre twist to the KiwiRail Cook Strait ferry shambles, the company is introducing risky rubber-tyred trailers to replace railway waggons on the Cook Strait run.
New Zealand First Leader and Northland MP Rt Hon Winston Peters says the Cook Strait ferries – with the exception of Aratere – can no longer carry rail freight. The Aratere cannot maintain an all-weather sailing schedule because of its multi-million dollar lengthening bungle.
“In a moment of inspiration, KiwiRail has now decided to load containers from railway waggons on to rubber-wheeled trailers then drive the trailers down a private roadway onto the Cook Strait Ferries.”
Mr Peters says this raises safety concerns on the ships. There are serious doubts whether the decks can cope with unstable rubber-tyred trailers carrying heavy weights which they are not designed for.
“For example, a set of tyres cannot spread a load on a deck like a set of rails.
“The move to eliminate rail on the ferries will require double handling and reconfiguration of the railway yards in Wellington and Picton,” says Mr Peters.
KiwRail confirmed yesterday that the days of carriages carrying rail freight on ferries are numbered.
“The future of KiwiRail is at risk because the state company went through a fire sale in the nineties, new owner asset stripping, share-value collapse, and the last Labour Government having to buy it back. Then followed years of gross mismanagement.
“Unfortunately the company kept a lot of top management from the previous owner Toll Holdings and continued making unsound commercial decisions on the Cook Strait service and elsewhere,” says Mr Peters.
“On Cook Strait a new ship would have been and will be, much cheaper in the long run.
“Railways predicament stems from the management not being up to the job and a litany of pathetic excuses for incompetence.
“When will successive National Ministers of Transport do something on rail to justify their portfolio?
“This rudderless, leaderless SOE is winding back regional services as a consequence.”