No one will buy it!

March 22nd, 2010 at 9:06 am by David Farrar

The Herald reports:

Removing former Prime Minister Jim Bolger as chairman would signal the Government’s intention to sell the troubled business as soon as it could, says Labour’s state-owned enterprises spokesman, Clayton Cosgrove.

Oh what nonsense. Apart from the fact that the Government has said it is not for sale, the reality is that no one would buy it. Hell I doubt you could even give it away for free, because the annual operating costs probably exceed income considerably.

Toll’s convincing Michael Cullen to spend $1 billion on purchasing it off them was all their Christmases come at once.

Tags:

53 Responses to “No one will buy it!”

  1. Michaels (1,318 comments) says:

    Quite simply it showed us just how STUPID STUPID STUPID Michael Cullen is.
    But what does it say for Mr. Key when he puts that STUPID STUPID STUPID man 2IC of NZ Post??
    Or is Mr. Key thinking of selling NZ Post?
    Wont help much for the sale price.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. coventry (321 comments) says:

    Value of Metal as Scrap $100,000.00
    Value as a SOE -$1,000,000,000.00 per decade

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. david (2,557 comments) says:

    The statement actually shows how totally stupid Clayton Cosgrove is.
    1. STUPID for being in the Labour Party
    2. STUPID for supporting Cullen’s purchase of Kiwirail
    3. STUPID for contemplating that there could be a purchaser at a any price
    4. STUPID for being STUPID in public

    God what an idiot saying idiotic things without thinking them through.

    Labour – the gift that keeps giving

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. Michaels (1,318 comments) says:

    Not only did STUPID STUPID STUPID Cullen pay 1 billion to much, he then gifted Toll the friggen trucking rights!!
    And with that money they cleared their debt and bought another trucking company which must make them one of the biggest in the country now, all thanks to us… ahhhhh…. makes me glow it does.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. big bruv (13,886 comments) says:

    Is Neville Key the same person who rewarded Kullen with a cushy job and supported Klark’s nomination for the UN job?

    Bit bloody late to be lamenting the purchase of the train set now Mr Key.

    Both Klark and Kullen should have been pilloried for such an outrageous waste of public funds yet Neville saw fit to reward them.

    It is now your problem Neville, man up and scrap the fucking thing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. ben (2,379 comments) says:

    I honestly believe Cullen should face criminal charges for that deal. I know Ministers must be free to make mistakes, but this was plainly and obviously a bad deal, known to be before the deal was closed,, and since it appears the electorate is unwilling to punish bad behaviour then it seems to me appropriate the courts step in. For knowingly destroying so much value, Cullen should be tried for what is in my view a major crime.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. Michaels (1,318 comments) says:

    Can’t scrap it BB….. Should but can’t.
    I beleive the only sensible thing to do with it now is invest anther friggen billion and make it work.
    don’t tinker, FIX IT!!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. campit (467 comments) says:

    Toll’s convincing Michael Cullen to spend $1 billion on purchasing it

    DPF, where did the $1bn figure come from? In May 2008 the New Zealand Government agreed to the purchase of Toll’s rail and sea operation for $665 million.

    http://en.wikipedia.org/wiki/Toll_NZ

    Agree with the benefit of hindsight it was still too much though, but what people forget is that the original sale contract to Toll had no teeth in it for making sure that the rail network had adequate maintenance and upkeep. You will recall that Toll and the Government had been locked for over a year in a dispute over how much Toll should be paying for track fees.

    One problem I have though is that KiwiRail accounts are still very much in the consolidated form. Group revenue is somewhere about $600m pa, but it isn’t clear what areas of operation provide this income stream. It is difficult to see from the accounts what the profit centres are, and KiwiRail does actually have a number of potential profit centres – Hillside workshops, ferry services, rail freight, passenger services.

    The Government has asked Kiwirail for a business plan. Supposedly this was coming out last year, but this is now months overdue.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. Tassman (234 comments) says:

    So, in the middle of traffic congestions and fuel burning, he decides to sell the Rail..?

    I guess no one will buy the story..

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. KiwiGreg (3,255 comments) says:

    ” beleive the only sensible thing to do with it now is invest anther friggen billion and make it work.
    don’t tinker, FIX IT!!”

    It’s not possible to “fix it”. Rail freight in the geography and econommic scale of New Zealand makes no sense. Commuter rail *might* work but I doubt it.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. david (2,557 comments) says:

    And the media reported Cosgrove’s statement without heaping scorn and derision on it for being patently a nonsense? Un-freakin-believable

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. KiwiGreg (3,255 comments) says:

    “Agree with the benefit of hindsight it was still too much though, ”

    No hindsight was required. There wasnt a single person in business with even a passing knowledge of this who couldnt see that Toll had totally legged the government over.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. Michaels (1,318 comments) says:

    So your saying scrap it Greg and truck everything?
    Won’t help our already congested roads.

    I blame my father for our congested roads. When he owned a tyre company he lobbyed the government so trucks could travel more than 100km (I think) from their base hence putting an immediate fail for the rail system. The trucks were granted unlimited travel. I clearly remember when this law was still in place we would do midnight runs to Whangarei, Tauranga and Rotorua from our Auckland factory.

    Reversing that might see a few trucking companies go out of business but it would also free up our roads and the rail would be back to flourishing.
    A good start would be to stop all trucks going into the ports of Auckland and rail everything to Otahuhu, trucks can pick up from there.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. KiwiGreg (3,255 comments) says:

    @ Michaels if your sole objective is to make rail appear economic and you dont care about fucking up the rest of the economy then your plan is perfect.

    There is no free ride. Making business pay for uneconomic rail simply raises costs for everyone.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. wreck1080 (3,906 comments) says:

    Cullen has screwed hard working New Zealanders.

    Where are the lefties who go on about the privatisation of telecom ? Why are they not crying out for Cullens blood?

    Labour supporters crapped on about how privatising ACC would make aussies rich, so , why are they not crapping on now? Or, is it OK when labour makes the aussies rich?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. Lutzie (56 comments) says:

    Freight in New Zealand is conservatively estimated to increase by 40% in the next decade alone.
    If we don’t want a viable rail system (as many posters in the thread seem to think is a good thing), then we can look forward to many more ever larger trucks on roads that are simply not designed to take them.
    Add an increasing road toll and increased pollution and maybe some of the short-term thinkers here will see that buying the railways (back) wasn’t such a bad idea.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. KiwiGreg (3,255 comments) says:

    “Add an increasing road toll and increased pollution and maybe some of the short-term thinkers here will see that buying the railways (back) wasn’t such a bad idea.”

    Even if you somehow thought that the state owning the rail was a good thing (it’s not, but park that), there is not a prayer you could say “buying them back at the price paid” wasnt a bad idea.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. OTGO (549 comments) says:

    This from Kiwirail 09 Annual Report. Last line says it all really.
    Revenue 518,099,000
    Internally Charged Income 118,525,000
    Total Income 636,624,000
    Expenditure to Suppliers, Staff etc (454,769,000)
    Internal Expenses (118,525,000)
    Total Expense (573,294,000)
    KiwiRail Earnings before Depreciation,
    Interest and Taxation
    63,330,000
    Depreciation (215,868,000)
    Net Finance Charges (34,093,000)
    Losses before Crown/Regional Council
    Funding
    (186,631,000)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. KiwiGreg (3,255 comments) says:

    “Freight in New Zealand is conservatively estimated to increase by 40% in the next decade alone.”

    Got a source for that…must be a really bulllish view of our economic prospects.

    I would expect there are some bulk point-to-point areas where rail *might* make economic sense but there is not a prayer that a national rail network in New Zealand does.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. Jeff83 (745 comments) says:

    It’s not possible to “fix it”. Rail freight in the geography and econommic scale of New Zealand makes no sense. Commuter rail *might* work but I doubt it.

    Completely agree with the first point disagree with it not working urban wise (well your doubt I should say), at least for Auckland.

    We are definitely too spread out to make rail an option for freight on a nationwide level. Large shipments can be done by sea, and smaller truck, it’s the way it should be.

    However in respect of urban rail it definitely can and is starting to work. The trains are actually bursting at the seams in peak hours, and I would hate to think what the roads would be like with those added cars. The thing is we need more and a better feeder service (buses). However the choke points need to be sorted out.

    And yes the buyback was the biggest fail move since they were originally sold (for effectively a $1 I believe once you unwind the deal) and then all the assets sold off.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. campit (467 comments) says:

    No hindsight was required. There wasnt a single person in business with even a passing knowledge of this who couldnt see that Toll had totally legged the government over.

    So what was a better alternative other than a buyout? At the time National didn’t say a word about what should have been done. In terms of the price, the Government had no leverage given the poor contract whereby Toll was able to dispute track access fees.

    Commuter rail *might* work but I doubt it.

    Are you serious? Record patronage growth in Auckland and Wellington patronage still as strong as ever, providing the trains don’t break down due to age.

    @OTGO you can’t tell anything from these accounts – they certainly aren’t enough to make any kind of investment decision.

    And how much profit did State Highway 1 make anyway? What “branch roads” should be shut down because they don’t make a profit?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. Michaels (1,318 comments) says:

    So Greg, your saying very clearly to scrap the rail and truck everything.
    That’s fine I have no problem with that…..
    All the logs that currently go by rail, you know the ones, the trains with about 40 trailer thingies (can’t think of their name) will equate to about 80 truck and trailers. And these units are of course the most dangerous around, very unstable. And thats just for the one train, there are about 4 that go to Mt Maunganui every day so thats about 320 truck and trailer loads hauling arse through Tauranga every day. Probably won’t help Bridges get re elected.
    Then there’s the coal, shit loads of coal every day. I can see the trucking companies rubbing their hands with glee.
    And of course there is all the other freight trains every day all around the country. I’m guessing and it’s nothing more than that, but probably an extra 1500 truck and trailers on our roads every day. but fuck it, lets not just make them truck and trailers, lets make them fucking road trains, 3 large trailers behing the rather large tractor. Good plan so far Greg.
    And of course there will then be some excellent employment for some scrap metal company to pull up all the tracks, that should melt down to some good profits.
    And of course we need to get rid of all those scenic trains to, they don’t make money, the few people that do use them can go by bus.
    Ahh yes Greg, I can see it all coming together…. Good plan.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. Michaels (1,318 comments) says:

    A thought has just come to mind……
    What trucking company do you own Greg?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. Bevan (3,924 comments) says:

    Labour really crack me up – we can’t afford an air combat wing for the air force, but we can afford to pay well over the asking price for an old train set!

    To use the arguements from the squadron axing – I wonder how many Hospitals/Doctors/Schools/Teachers we could have funded with1 billion dollars?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. OTGO (549 comments) says:

    Lutzie 10.54 Coastal shipping is the way of the future.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. Bevan (3,924 comments) says:

    Lutzie 10.54 Coastal shipping is the way of the future.

    Air freight is quicker.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. Lutzie (56 comments) says:

    Try moving logs by airfreight.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  28. MikeE (555 comments) says:

    @michaels – one does not have to own a trucking company to see how much of a nonsensical idea it is to kneecap trucking companies and their customers, just to create a false economy for rail.

    I suppose you’d be in favor of smashing windows to boost business for glass companies too? After all, it would “create jobs”

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. Michaels (1,318 comments) says:

    Lutzie, how wil you get the logs from the forest in the middle of the country to the ocean?
    And lets just use the North Island as an example…..
    From Kinleath to Tauranga.
    Plane? Don’t think so.
    Boat? hmmm…. Can’t see it.
    Down the river like in Canada many years ago? Maybe.
    Truck and trailer, 320 of them? hmmm if Greg has his way yes.
    Train? Well it’s happening now so maybe that will work.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. KiwiGreg (3,255 comments) says:

    “A thought has just come to mind……
    What trucking company do you own Greg?”

    None.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  31. KiwiGreg (3,255 comments) says:

    “So what was a better alternative other than a buyout? ”

    Gee…not a buyout? A country with limited capital cant afford to piss any of it away. But that’s what these dipshits did.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  32. Lutzie (56 comments) says:

    KiwiGreg (1135) at 11:11 am
    “Freight in New Zealand is conservatively estimated to increase by 40% in the next decade alone.”

    Got a source for that…must be a really bulllish view of our economic prospects
    _____________

    Actually the figure for the next 20 years is an increase of 77%.

    http://www.transport.govt.nz/research/Forecastsforthefuture-NationalFreightDemandsStudy/

    We need to make these decisions for the long-term view.
    How profitable or unprofitable the railways are this year or next year is not really the point.

    We could even view it as an reinvestment of the capital increase gained from the Government’s Air NZ shareholding.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  33. KiwiGreg (3,255 comments) says:

    “Are you serious? Record patronage growth in Auckland and Wellington patronage still as strong as ever, providing the trains don’t break down due to age.”

    Of course Im serious. Take away the subsidies and let the users pay the actual cost and see if it still works. I doubt it does, buses are probably better (on a like for like non subsidised basis). You guys all seem to think that suspending basic rules of economics somehow makes sense if a train set is involved. It doesnt. It was probably this kind of muddled, moronic thinking which got us into this mess.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  34. Michaels (1,318 comments) says:

    MikeE, I am not against trucking by any means, infact I have been in and around the industry for many years. Thanks to trucks I am set up quite nicely thank you. What I am trying to say is if we keep the rail invest in it and stop pissing about. Personally I’d like to see rail make a comeback and I’d like to see less trucks on our roads, but lets make a decision and make it work either way.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  35. KiwiGreg (3,255 comments) says:

    “How profitable or unprofitable the railways are this year or next year is not really the point.”

    It’s ENTIRELY the point. Profit is the market’s way of telling you you are doing the right thing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  36. KiwiGreg (3,255 comments) says:

    “Lutzie, how wil you get the logs from the forest in the middle of the country to the ocean?
    And lets just use the North Island as an example…..
    From Kinleath to Tauranga.”

    They go on trucks to the rail siding then on the train to the port, then they go in a ship. As a said there are some bulk point-to-point lines where rail MIGHT make sense. I really dont know if it is economical to rail them (its only 90km to Tauranga) because the prospect is that it probably is directly or cross subsidised, but Im not against trains. Im against screwing over the country for a failed ideology.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  37. Michaels (1,318 comments) says:

    So take away the train Greg and you will have 320 truck and trailers hauling arse through Tauranga every day.
    You can’t have it both ways. I agree to keep the trains they need to be profitable, so invest in it so it is. Or get rid of them and fuck our roads that were never built for so many trucks because those fuckwits have no vision. Even today they are still building 2 lane highways. Bring on the skycar I say.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  38. OTGO (549 comments) says:

    Where do you think the national cycle trail is going to come from? Pull all the tracks up and ta dah! There it is.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  39. Michaels (1,318 comments) says:

    I believe we currently have tracks Bevan. Am I wrong here?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  40. lastmanstanding (1,293 comments) says:

    Move Spud on and replace him with Cullen Set him robust KPIs including bringing in at least a breakeven in 3 years.

    Have him report in public on TV radio etc every 6 mths against the KPIs.

    Pay him a gold coin per annum.

    the alternative. Charge him with corruption and misfeasance in public office. I can think of at least 4 or 5 cases for him to answer to.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  41. burt (8,269 comments) says:

    Cullen must be appointed as KiwiRail chairman. He had a vision for why we needed to spend a billy on it, now it’s time to deliver on that vision. Step up Dr. Cullen, try and rescue your credibility having flushed our money down your ideological drain.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  42. burt (8,269 comments) says:

    lastmanstanding

    The last time somebody tried the “corruption and misfeasance in public office” routine urgency was used to pass validations cover the preceeding 14 years. They don’t like it up em sir…..

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  43. campit (467 comments) says:

    Take away the subsidies and let the users pay the actual cost and see if it still works.

    Fair enough, provided you do the same thing for local roading expenditure which accounts for up to 40% of the average rates bill.

    You guys all seem to think that suspending basic rules of economics somehow makes sense if a train set is involved.

    Basic rules of economics are only suspended for roading projects like Puhuoi to Wellsord, the Waikato Expressway and other projects that are beneficial to the trucking industry.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  44. burt (8,269 comments) says:

    campit

    Basic rules of economics are also suspended for policies of envy. Remember Cullen’s definition of rich held for 9 years while wage inflation continued on it’s own track.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  45. Angus (536 comments) says:

    Labour were desperate. Some beltway circle-jerking focus group would’ve told them that a NZ Rail buyback would be popular with the public. Fat chance.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  46. KiwiGreg (3,255 comments) says:

    “So take away the train Greg and you will have 320 truck and trailers hauling arse through Tauranga every day.”

    I wouldnt care. What I’m interested in is economic efficiency. If that’s the best answer that’s the best answer.

    I’m all for road users to pay all their externalities as well. I’m also 100% in favour of shifting away from generic rating to targetting user pays as campit proposes.

    “Basic rules of economics are only suspended for roading projects like Puhuoi to Wellsord, the Waikato Expressway and other projects that are beneficial to the trucking industry.”

    And anyone else who uses a road. Not one lick of rail would be laid today if the same economics that determine roading was appliued.

    @ Lutzie – thanks for the link, I wont be able to get to that today. It appears like a hopelessly optimistic number to me but whatever. I imagine most will be short haul and therefore irrelevant to the rail/road debate. But I will read it :)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  47. Michaels (1,318 comments) says:

    And to think I wasted the day on this.
    Bring in the scrap metal merchants then and give us a price on the train set including the tracks.
    Make it a decent price so we can create bigger cemetries for all the road fatalities.
    And remember folks, when leaving to go on holiday forget the leaving work at 2:00pm to beat the traffic, leave the day before.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  48. burt (8,269 comments) says:

    Michaels

    Leave the day before – just like the rail commuters trying to get to work on Cullen’s white elephant.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  49. Bevan (3,924 comments) says:

    I believe we currently have tracks Bevan. Am I wrong here?

    Correct me if I’m wrong, but those tracks don’t lead into every forest – that freight the train is moving has to get to the train somehow.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  50. gravedodger (1,566 comments) says:

    Disclaimer! I would rather not have so many trucks on our roads particularly those with casual drivers.

    Logs in forest, market in china, now, truck & trailer loads in forest drives to port, unloads logs at designated stockpile, puts trailer on truck drives back to forest.
    Some want truck & trailer to load in forest, unload at siding, then return to forest, loader picks up logs at siding load onto wagon, train travels to port and loader takes to stock pile (these things are not constant as logs don’t all go to same stockpile but train only has one destination). Is there a pattern emerging.
    Sometimes truck delivers trailer load to saw mill or board factory and takes truckload to different destination.

    Truck and trailer (curtain sider) picks up freight from one or more warehouses, loads to access freight for different destinations and makes deliveries to various dests, driver stays with load as far as hours allow, controls delivery, Picks up back load/s, returns. If drivers change, manifest continues. ie flexible.

    Train driver has buggerall knowledge of his load and can only deliver the wagon/ container to a central location (and that is on a good/lucky day) for trucks to complete delivery.

    This country’s production and consumption/next step process/ export is no longer oriented to the very limited rail network

    All passenger networks run at big losses for the same reasons and all the nostalgia in this world will not change that.

    The only people who advocate retention of the 17th century technology for this country’s freight system are either, at best deluded or just plain simple. The funds that are poured into the grossly inefficient rail system would give a far greater return on improving the road network, end of story.

    ps I sent a load of farm hardware from Waipara to Masterton some years ago when changing farms and it was lost for some 2 weeks as it went to Marton and it was no ones responsibility. Had it been a truckie he might just have noticed that no one in Marton wanted it and his employer might just have got it right first time.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  51. jaba (2,141 comments) says:

    wtf .. Stuff is saying that Cullen will replace Bolger .. surely someone is having a laugh.
    we have joked about but !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  52. big bruv (13,886 comments) says:

    Replacing one idiot (Bolger) with another (Kullen) would be perfect!

    Key is saying to Kullen “you got us into this fucking mess now you fix it”

    Kullen is in a no win situation, he simply cannot turn down this request given he was the fuckwit who purchased the bloody thing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote