What would it do if it was a private company?

KiwiRail is asking the Government to help pay for the cost of replacing the broken-down Cook Strait ferry the Aratere.

The company has still not worked out what went wrong, but is adamant it has not cut corners on maintenance of the ferry which lost one of its propellors near Tory Channel on 5 November. . .

KiwiRail was one of the last Labour government’s most expensive mistakes.

Labour paid far more for the company than it needed to and a great deal more than it was worth.

It’s performance since it became an SOE has been dismal and now it’s asking for more taxpayer funds.

What would it do if it was a private company and was faced with an unexpected major expense?

This is an argument for privatisation – in part or in full.

Regardless of what led to the loss of the propeller, the taxpayer shouldn’t be adding to the already large sum of money it’s spent on the company.

8 Responses to What would it do if it was a private company?

  1. Quintin Hogg says:

    It is kiwirails problem.
    Surely they have insurance for such casualties! That is what insurance is for.
    The only downside is that the Cook straight is a vital transport link.


  2. Armchair Critic says:

    It would go to its shareholders or owners and ask for capital. Which is pretty much what it’s doing.
    The chairman and CEO, if I recall correctly, were controversial appointments because of their links to the National Party, and doubt about their suitability for the roles. You may have uncovered something here Ele. Keep digging.


  3. Viv K says:

    If it was Rio Tinto then Bill English would give it 30 million of taxpayers money. That ought to be enough buy a new propellor.


  4. Mr E says:

    Scuttle the Aratere, cut the North Island loose, that’s what I would do if I owned Kiwirail

    Vital transport link. Yeah Nah.


  5. Paranormal says:

    The problem with SOE’s, and Kiwirail & Solid Energy are prime examples, is they operate in the perception that if there is a problem they have big brother State to call in. I’ve had SOE’s as clients in the past and they’ve made astonishing decisions in the belief they had the government balance sheet to call on, that just wouldn’t be made in the private sector.

    It’s good to see National stopping that sort of decadence at the taxpayers expense. Any private shipping company would have insurance to cover such a major risk as your prop falling off.


  6. Armchair Critic says:

    I should mention, too, that the board and senior management would, in the private sector, get their collective and proverbial backsides kicked hard, especially if the steps they’ve taken to prevent the loss of a propellor were I adequate.
    The shareholding ministers really need to take urgent action to prevent this from looking like another Solid Energy-like ministerial stuff up.


  7. Armchair Critic says:

    “I adequate” should read “inadequate”


  8. Gravedodger says:

    @ Viv K, on the post re Land Corp you complained about a minister “talking Bullshit”, above here, you deliberately mislead on the underlining reason the government funded Rio Tinto 30 million dollars to keep a profitable, efficient producer of Aluminium going through a downturn in demand for its production due entirely to the GFC and associated reduced world demand.
    IMHO your habitual rearrangement of facts to suit your politics is a greater indulgence in bullshit.
    You will struggle with the concept that male bovine manure is the sole preserve of the GP.

    Kiwi Rail is only a theoretical good idea, We are a poor shape geographically and too sparsely populated for any chance of efficient rail transport on all levels. That wasted 800 million dollars invested in coastal shipping and leave the trainset to muddle along with its coal, tourism and NI main trunk would be the only sensible option.
    However the self styled financial wizard knew better, or was he just indulging in a bit of macheivellian dark arts to make thing difficult for the winners steaming into office.

    On the thread of this post ,if the justification for keeping Landcorp is to maintain a landbank of assetts for treaty settlements then call it that and stop maintaining the pretence it is a SOE providing opportunities for pretend farmers who have no discipline of the real world to provide a motive for excellence. As a business it is just short of a financial disaster.


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