KiwiRail is looking to cut about 220 jobs from its track maintenance and engineering operations, taking effect from October.
KiwiRail general manager of infrastructure and engineering, Rick van Barneveld announced today that KiwiRail’s Infrastructure and Engineering business is to reduce previously planned spending of $950million by $200million in the next three years.
Cutting 170-220 staff is among cost saving measures being considered and infrastructure and engineering businesses employ 1000 people.
The infrastructure team maintains the 4000kms of rail track, bridges, tunnels, viaducts, overhead wires, signals and level crossings.
It is also responsible for all train movements managed from the National Train Control Centre based in Wellington. The infrastructure business is also responsible for the design, installation and upgrade of level crossing warning systems.
The engineering business builds, maintains and refurbishes rolling stock used on the network. Rolling stock can include locomotives, wagons.
KiwiRail spokesperson Candice Johanson says it is too early to say what the impact will be on the Bay of Plenty.
KiwiRail is in the very early stages of consultation and no decisions have yet been made about which jobs will go.
Rick blames the Christchurch earthquakes and the Pike River mine disaster for compounding tough trading conditions.
"Reducing our network spend over the next three years helps to bring our investment curve back behind our earnings growth. Making these changes to our original plan will help ensure KiwiRail remains on target to achieve financial sustainability by 2020." says Rick.
KiwiRail made the comments after New Zealand First said it had obtained a consultation document, which suggested the company planned to make the job cuts by October. The cuts would save $14million a year in wages.
New Zealand First Transport spokesperson Brendan Horan says the documents reveal the redundancies will gut KiwiRail’s infrastructure and engineering unit – the muscle that keeps the rail track and signalling operational.
“It signals the start of a bigger plan to undermine the role of the rail network and prepare it to be sold off to a private investor.
“This is a repeat of National’s tired 1990s thinking when it sold the railway to a private owner which ran it into the ground. The Labour-led Government of the day then had to buy it back at a significant loss to taxpayers.”
The latest cuts create risks for staff and passengers who use the rail system, and is another example of the Government’s shocking record on risk management, says Brendan.
“You only need to look at the poor safety inspections at Pike River, and the biosecurity fiasco surrounding the accidental release of the Psa Kiwifruit virus, to see what may happen at KiwiRail.”
Earlier this year KiwiRail announced it is selling its Hillside railway engineering workshop in Dunedin, where 130 people are employed.
Last month KiwiRail announced it will restructure and shift its land holdings to a new entity, with a write-down of about $6.7billion.
Under changes coming into effect in January next year, its freight, infrastructure, passenger and ferry businesses, rolling stock, rail infrastructure, plant and equipment will be transferred to a new state-owned enterprise.
Labour’s state-owned enterprises spokesman Clayton Cosgrove says the moves to split the company and the job cuts are part of a Government plan to sell Kiwi Rail.
"You could argue quite clearly that in splitting it out, you’ve got the good assets and the assets that might not be so good. This is all about stitching this thing up for a sale in the future.”