Govt accounts take KiwiRail hit

[Newtown-Fella]

There is an admission of an accounting kind in the Government's latest accounts that the Government paid too much for rail.

A note reveals that the rail business the Government paid $690 million for on July 1 last year valued up at $442m in September.

The September valuation is a provisional assessment. A final valuation will be completed a year from the original purchase.

"No goodwill has been recognised and the difference between the provisional assessment of fair value of the assets acquired and liabilities assumed and the cost of acquisition has been charged to the statement of the financial performance," the note states.

In other words, the Government wrote off $248m on the investment less than a year after making it and there may be more to come.

The accounts show that KiwiRail made a loss of $4m in the six months to December 31 on turnover of $332m.

The Government bought the rail and ferry business from Toll Holdings of Australia, having earlier purchased the track for $1. Toll continues to own the trucking and freight forwarding assets once owned by Tranz Rail and has purchased other companies in New Zealand.

It reports its profit next week.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10557837

[bump head benny]

Mongrels 

[Kiwithrottlejockey]

Blame the Nats (Richardson & Birch) who flogged it off to their rip-off merchant mates, Michael Fay and David Richcuntwhite in the first place, giving their mates the opportunity to asset-strip the outfit.

[bump head benny]

  Mongrels

[Brownie55]

Blame the Nats


hahahaha   yeah right.

[Brownie55]

Following the election, the new Labour Government embarked on what was to become one of the most "comprehensive programs of economic reform of any (OECD) country in recent decades", and involved converting many government departments into State Owned Enterprises (SOE). [4][3] As a result of the market reforms, the financial performance of NZRC was a disaster, with revenues halved by the new competition. During the mid-1980s NZRC was extensively rationalised. By 1989 large operating losses and interest generated a debt of $1.2 billion that could not be sustained.[3] Organisational, financial and cost restructuring in 1990 led to the government on 28 October removing core "saleable" rail transport and shipping operations and creating a separate entity called New Zealand Rail Ltd (NZRL). In 1993 the Bolger National government sold NZRL for $400 million to a consortium headed by Wisconsin Central. In 1995 the company was renamed Tranz Rail Holdings Limited; a year later it went public, listing on the New Zealand Stock Exchange and NASDAQ.[3]

In 2003, Australia's Toll Holdings made a $394 million takeover of Tranz Rail, renaming it Toll NZ in 2004, with its rail division renamed Toll Rail.

[Calliope]

Following the election, the new Labour Government embarked on what was to become one of the most "comprehensive programs of economic reform of any (OECD) country in recent decades", and involved converting many government departments into State Owned Enterprises (SOE). [4][3] As a result of the market reforms, the financial performance of NZRC was a disaster, with revenues halved by the new competition. During the mid-1980s NZRC was extensively rationalised. ]By 1989 large operating losses and interest generated a debt of $1.2 billion that could not be sustained [3] Organisational, financial and cost restructuring in 1990 led to the government on 28 October removing core "saleable" rail transport and shipping operations and creating a separate entity called New Zealand Rail Ltd (NZRL). In 1993 the Bolger National government sold NZRL for $400 million to a consortium headed by Wisconsin Central.[/b] In 1995 the company was renamed Tranz Rail Holdings Limited; a year later it went public, listing on the New Zealand Stock Exchange and NASDAQ.[3]

In 2003, Australia's Toll Holdings made a $394 million takeover of Tranz Rail, renaming it Toll NZ in 2004, with its rail division renamed Toll Rail.

[Brownie55]

This is the part which should stand out


By 1989 large operating losses and interest generated a debt of $1.2 billion that could not be sustained.[

[Calliope]

So Bolger chose to throw away $800m.

[bump head benny]

Mongrel 

[Brownie55]

Not what our country needed to buy going into a recession. 

[Newtown-Fella]

over $1.5 billion to bring KiwiRail up to scratch .....

It's been revealed that the price of keeping the country's rail networks on track is climbing.

Taxpayers have been in the dark about just how much New Zealand's newest state asset will cost the country. But officials have now revealed just how much the rail network needs over the next five years.

"It's been losing money, losing a lot of money. (It's) coming under the same pressure as other businesses so we'll be propping them up," says Bill English, Finance Minister.

Eight months after buying it off Toll Holdings for $665 million and renaming it KiwiRail the cost is climbing dramatically, and the government now must either pump hundreds of millions into it to maintain services or lose lines.

Papers obtained by ONE News under the Official Information Act show that taxpayers will still have to fork out around the same amount in subsidies just to maintain existing services.

The papers produced by officials say those subsidies would amount to $473 million over five years. Additional upgrades and improvements costs will be another $764 million.

Add to that commuter services in the main centres, which will be $275 million, and the fiscal toll will take it to $1.5 billion.
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"Traffic's going to increase by about 70%, rail traffic that is, and we will have to, really have to spend that sort of money," says Bob Stott, rail expert.

Officials say running the existing network commercially would shut down 41% of lines, including all tracks north of Helensville, all lines north of Oringi, including Napier to Gisborne, Stratford to Okahukura, Masterton to Woodville and then chunks of the main trunk line from Te Kuiti to Marton, and Paraparaumu to Longburn.

The government is not ruling the shut down out.

"We are going to invest some money in making sure that it can effectively run where it's running well but we've got to have a hard look at everything else," says English.

However the previous government , implementers of the KiwiRail buy back, disagrees.

"We can't do that - we've got to be building up these resources, building up this infrastructure and offering a life line to the Greymouths and the Gisbornes to be part of the economic recovery through rail," says Darren Hughes, Labour transport spokesman.

Those centres, along with KiwiRail's 2500 workers, will know on Budget Day at the end of May, which track the government will go down.

http://tvnz.co.nz/national-news/huge-kiwirail-costs-revealed-2508431

[Ferney]

TJ.  Are you going to take a pay cut ?     

[Kiwithrottlejockey]

TJ.  Are you going to take a pay cut ?    

Nope....we signed a three-year employment contract last year providing for three consecutive annual pay increases of 4.5% per year. A contract is a contract is a contract.

Anyway....the people who are really to blame are David Richcuntwhite & co who asset-stripped the company. They flogged off many, many millions of dollars of specialist locomotive parts, specialist track components, and lots of other specialist stuff for scrap, then lined their pockets with the proceeds. All stuff that now has to be purchased at full price because it is all consumable stuff that wears out. Another example is the substations that power the Wellington electrified system. David Richcuntwhite & co flogged off half of the transformers for scrap (as is usual practice, electrified railway systems tend to have over-capacity to cover peak periods, maintenance down-time, etc), but all that over-capacity went to the scrap merchants and the proceeds went into scumbag thieving merchant bankers' pockets. Now, vast sums of money are having to be spent to replace what those crooks (Ruth Richardson's mates) flogged off to line their own pockets.

But it isn't just the railways. Take a close look at just about every industry those thieving cunts got their hands on and you will see the same pattern of asset-stripping to line their own pockets, then flogging the then virtually worthless shares off to suckers who ended up getting their hands burnt. No wonder Michael Fay and David Richcuntwhite fled to Switzerland. I hear they have been moaning about Kiwis slagging them off. No shit...I wonder why?

Mind you, if the Nats hadn't flogged the outfit off to rip-off merchants in the first place, then the asset-stripping wouldn't have happened. The interesting thing is that the chief financial policy advisor from Treasury actually strongly advised Ruth Richardson against flogging off the rail, but she CHOSE to ignore that advice and went right ahead and flogged it off to her rip-off mates (the very mates who were on the inside advising the government on the sale, then used inside info to buy railways themselves). The same chief financial policy advisor from Treasury is still in the office of the Minister of Finance. I know him personally (I used to jokingly refer to him as my spy in Michael Cullen's office; these days I jokingly refer to him as my spy in Bill English's office).

[Ferney]

Was only kidding.   

[ballasted moth]

  KTJ Labour sold the assets via Fay Richwhite

[ssweetpea]

But it isn't just the railways. Take a close look at just about every industry those thieving cunts got their hands on and you will see the same pattern of asset-stripping to line their own pockets, then flogging the then virtually worthless shares off to suckers who ended up getting their hands burnt. No wonder Michael Fay and David Richcuntwhite fled to Switzerland. I hear they have been moaning about Kiwis slagging them off. No shit...I wonder why?

Yes, another example comes to mind- did you know that many of this country's telephone exchanges are getting very long in the tooth and will be well beyond their operational life span before they are replaced? - and that Telecom was part owned by Fay Richwhite inthe 90s?

I remember having to scounge around for parts, we used to ring round and find an old exchange in the process of being removed and raid the jumbo bins, and trying to source loading coils to replace ones that had been removed and sold off. To bad that the long lines wouldn't carry a "foreign exchange" circuit without them. Last I heard the old A units for radio telephones that I scroged parts for in the early 90s were still in use.

[ssweetpea]

BTW KTJ, what is with those nice new carridges on the Wairarapa line being pulled by a rusty old DC?

We have pictures.

[Kiwithrottlejockey]

  KTJ Labour sold the assets via Fay Richwhite

Now I KNOW you're stupid. It was the forth National government with Jim Bolger as Prime Minister and Ruth Richardson as Minister of Finance who sold the assets to Fay Richwhite (and others). Get your facts right, BallastedMoth. Are all Libertarianz so thick that they don't know the difference between a government with Jim Bolger and Ruth Richardson in the Beehive, and a Labour government? Faaaark....no wonder you Libertarianz retards have never managed to get any of your candidates elected into Parliament!!!

[Magpie]

The capacity of our resident Nats to rewrite history to suit themselves is breathtaking. Truth no longer has any meaning round here. Perhaps it never did.

[ballasted moth]

   
   Prebble and Labour set up the sale process of state assetswhich were all run down under performing and manned by morons
   as usual this has nothing to do with today but a refection of the mindset of KTJ and Magpie both stuck in the past
 
 The current govt is the most popular in NZ history and is working for NZ not themselves

[DidiMau69]

KTJ once said that you had to belong to 'the union' to work for whatever NZ Rail is currently called.

Freedom of choice, fought for by New Zealanders is an anathema.

Perhaps if they got rid of the union and unionists who have dragged NZ Rail into oblivion in the past with their unrealistic 19th century anti-management stupidity, then the outfit might perform. It would be able to employ efficient and effective employees with an ambition to succeed.

The National Union of Railwaymen are directly responsible for creating the gross inefficiencies at NZ Railways in the 50's through to the late 80's, which led to the massive growth of New Zealand's road transport industry.

So whenever you're stuck behind a slow bloody truck on the road blame the NUR.

I have refused to belong to a union since the time when I first started work in the 60's and a grumpy old bitch came round collecting union fees. I was told that I had no choice, pay the fees or be sacked. It was not open for discussion! This harridan appeared every three months for the sole purpose of collecting fees. At any other time the union showed absolutely no interest in the workers whatsoever.

I joined the Army [non-union] and spent an enjoyable time shooting commie pricks who tried to impose their way on others.