Dunedin South MP Clare Curran has written to the
Auditor-general asking for an urgent investigation into the
tendering and decision-making processes that KiwiRail used to
procure rail wagons in the past two years.
She has also asked for an investigation into the extent and
appropriateness of political involvement and interference in
tendering decisions made by the KiwiRail board.
She told the Otago Daily Times she believed the board
had blocked proposals from Hillside and KiwiRail management
for rail carriages to be built at the Hillside workshops, in
South Island organiser for the Rail and Maritime Transport
Union John Kerr said in an interview he was at a meeting of
the KiwiRail Mechanical Industrial Council on September 27
when a briefing was given on the progress on the sale of
At that meeting, a study was presented looking at producing
100 flat-deck wagons a year from Hillside - the type of work
the workshops excelled at, he said.
KiwiRail had planned to buy several thousand wagons from
overseas, partly because the company believed it did not have
the scale to produce them quickly in Dunedin.
Because of the global downturn and the Christchurch
earthquakes, KiwiRail had not hit its financial targets and
was scaling back its capital expenditure, Mr Kerr said.
A proposal was put forward for Hillside to produce some of
the wagons in a short-term production run to first keep the
workshops open and secondly make them a more attractive
purchase target for any prospective buyer.
Mr Kerr said the meeting was told the decision not to
progress with the proposal, which he believed was well within
pricing guidelines, was made at board level and with the
shareholder - the Government.
"We always believed the board and Government wanted to shut
the workshops down but we never heard it expressed so clearly
Asked if he was surprised by the news the board and
Government appeared opposed to the ongoing production, Mr
Kerr said he was only surprised by how clearly it was
expressed at the meeting.
Ms Curran is filing an Official Information Act request
seeking a paper trail on who saw the production proposal and
who acted upon it.
"The Government has consistently claimed that the decisions
made by the KiwiRail board are operational and that it has
not issued directions to require KiwiRail to choose the
lowest cost bidder for rail wagons, or to require KiwiRail to
run down and divest itself of core capacity at Hillside. I
contend that this is simply not true."
That was why she was asking the Auditor-general to
The actions of KiwiRail, its board and shareholding ministers
- Finance Minister Bill English and State-owned Enterprise
Minister Tony Ryall - potentially represented a breach of the
social responsibility clause of the State-owned Enterprise
Act, Ms Curran said.