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He travelled to Dunedin yesterday to tell Hillside's 115 staff the unwelcome news and explain to waiting media what will become of the 130-year-old manufacturing facility.
The foundry will be leased by global company Bradken for at least five years and KiwiRail will continue to operate Hillside's heavy lift operation while Christchurch equipment is repaired.
Of the 23 Hillside foundry workers, 18 were expected to be employed by Bradken.
KiwiRail would employ seven staff in the heavy lift department and give priority to ex-Hillside workers applying for the 12 positions available at its Lower Hutt site.
Mr Quinn said he was disappointed Hillside in its entirety had not attracted a buyer.
"It's a very sad day. It's been a key part of Dunedin for a long time. We've done everything we can to get a deal better than that.
"We've exhausted every opportunity we could see, but we are at least pleased to create some opportunities," he said.
In the next six months, the bulk of Hillside will be tidied and locked up.
No decision had been made about what to do with such a large, predominantly empty facility, Mr Quinn said.
"We got a good deal in the context of things. No-one wanted to entertain the full site and we didn't have offers on the rest of it. But it is a terrific site in terms of location and one of the things we have to do as a responsible site owner is investigate how it can be used," he said.
KiwiRail would move Hillside equipment to its other centres throughout the country as and when required.
Hillside workers will leave the facility as projects finish on December 7 and 21, and those vying for remaining positions will finish in January if not successful.
Mr Quinn said staff were understandably disappointed but handled the news well.
"They were professional and very calm and respectful, but it's a disappointing time for them. I think they know we did the best we could, and at the end of the day I can't conjure up magic," he said.
Mr Quinn would not disclose the monetary value of KiwiRail's agreement with Bradken, nor would he say how much the process to sell Hillside, including redundancies, had cost the state-owned enterprise.
Rail and Maritime Transport Union (RMTU) South Island organiser John Kerr said KiwiRail had tried hard to secure work for Hillside, but attempts were thwarted by members of its board of directors and those in the relevant ministers' offices.
A KiwiRail proposal for Hillside to produce 100 flat-deck wagons each year was financially competitive and viable, but "shareholders" decided against it, Mr Kerr said.
"That gives the lie to the line ministers come out with when they say it's an operational decision by a state-owned enterprise and they have nothing to do with it," he said.
Such was the answer from Deputy Prime Minister Bill English in Parliament yesterday, when responding to questions about Hillside from Dunedin South Labour MP Clare Curran.
Mr English said Hillside redundancies were not the result of Government directives and cited the "three-quarters of a billion dollars" the Government had invested in KiwiRail.
"Our only directive to the board is to ensure they have a sustainable rail system. It's very unfortunate for those workers who have lost their jobs, as it turned out those jobs weren't sustainable," he said.
Ms Curran and Labour's Dunedin North MP, David Clark, issued a joint statement criticising the Government for destroying livelihoods.
"The decision to close part of Hillside today is an act of economic sabotage. The consequences will be felt not only by the workers and their families, but by the wider community and businesses as well. Many suppliers and subcontractors will also lose work because of today's decision," they said.
National list MP Michael Woodhouse, of Dunedin, said wagons built in Dunedin were about 40% more expensive than their outsourced equivalents and although there was no "candy-coating" the disappointing news, it was tempered by relief the Hillside foundry had been leased.
Mr Woodhouse grew up near the workshops, where his grandfather worked in the 1940s and 1950s.