The final rail loss

NZPA reports:

The final valuation of KiwiRail was $369 million – more than half the price the Government paid for it.

The Labour government bought TranzRail from Toll on July 1 last year for $690m. A provisional valuation in the government financial statements in September 2008 put the value at $442m.

Today Transport Minister Steven Joyce said the final valuation by PriceWaterhouseCoopers was $388.29m.

A Treasury report said a fair value for KiwiRail at the purchase date would have been $369.54m.

“This results in a final financial loss on acquisition of Toll NZ Ltd of $320m,” the report said.

It was the deal of the century – for Toll. This is the problem with politicians using our money to buy toys/assets. Cullen was desperate to buy – for political reasons, and Toll knew it. They outsmarted, outwitted and outlasted the Government in the negotiations and we paid for it.

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