Govt not to blame: KiwiRail chairman

Kiwirail takes full responsibility for its partial closure of Hillside Engineering Workshops and the redundancy of 90 workers, board of directors chairman John Spencer says.

Mr Spencer said the Government should not be blamed for KiwiRail decisions.

The decision to sell Hillside was not made quickly or lightly, but there was simply not enough work for the facility to be kept running in its current state, he said.

"KiwiRail's management team and board looked very carefully at the options for the future of Hillside. This included the forward work opportunities and the sale.

"We know this has been hard on the staff and our priority now is ensuring as smooth a transition for them as possible," he said.

Hillside workers and members of the Rail and Maritime Transport Union blamed the National Government and KiwiRail board for this week's shock announcement.

They accused board members and those in the relevant ministers' offices of rejecting commercially viable options for future work at Hillside.

In response, Mr Spencer said the board and management team took full responsibility for the "hard decisions" which had to be made to ensure the future of KiwiRail's 4000 other employees.

"These decisions are ours, not the Government's. Our priority is to ensure a sustainable future for KiwiRail in which it no longer has to rely on government handouts and can, therefore, eventually determine its own future," he said.

Prime Minister John Key's office also rejected claims the Government was responsible for Hillside's demise.

A spokeswoman Mr Key said Hillside job losses were not the result of Government directives.

She said the previous government bought KiwiRail for $700 million when it was not a commercially viable business, and despite "significant" taxpayer investment since then, it still could not stand alone.

"This Government is investing $750 million in KiwiRail over three years as part of a turnaround plan to ensure there are many more jobs at KiwiRail in coming years.

"The Government regrets news of job losses whenever they occur," she said.

The Government had no plans to sell KiwiRail, which was trying "very hard" to become financially self-sustaining by 2020, the spokeswoman said.


Hillside saga

Kiwirail correspondence shows a deliberate policy of "failing" any attempt by Hillside to gain new work. As an example, a summary of the short list tenders for the fabrication of 300 new rail wagons is highly censored and includes unsupported comments to the Board that place Hillside in a very poor light. This recommendation to the Board resulted in the tender being awarded to a Chinese company and the current closure of Hillside as a New Zealand railway engineering company. The purchaser of Hillside is Bradken who also bid to fabricate the 300 wagons, but ALL data in relation to the Bradken tender has been censored - even the quantity of wagons quoted!! 

Hillside Workshop

The closure of Hillside is the culmination of years of poor management mostly as a government department. The current management may well have succeeded if the life hadn't been sucked out of the business by self-serving corporates operating in a greed based financial system.

Sadly we see the same situations evolving in many of our national institutions.

They are paid exorbitant amounts of money under the pathetic guise that you have to pay that wage to attract competent people. Then they pay themselves performance bonuses, and golden hand-shakes that leave no operating capital .

When the proverbial stuff hits the fan, there is another round of money-wasting as the parasitic consultants move in, many of whom have even less idea of how to run a business than the people who have created the damage in the first instance. The review will state that they have put systems in place to prevent the problems from arising again, ignorant of the fact that their job was actually meant to be stopping exactly those issues from arising in the first place.

Many of the issues that plagued the stricken business process would have been known to those working at the coal face, would have been made known to management by these people, but identified as whinging or negativity or criticism of something that management thought was good. 

Just look at the sale processes that evolved during pass the parcel of Kiwirail sales and resales in past years...and nobody spent any money on maintenance during that time either.




There was enough work but it all went to China, all made possible by bad decision making and poor choices.


Yet Mr Spencer allowed the company managers to break the first rule of procurement: Always buy on quality, not price.


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