We don’t expect the state highway network to turn a profit but we know it contributes enormous value to our economy. Similarly, we know that our airports, seaports, and telecommunications network add more to the economy than just the profits of the companies.
The same goes for rail. But the funny thing, considering the Right’s bitter attacks on Kiwirail, is that it is actually turning large profits and will continue to do so. In fact, by 2020, Kiwirail will have made over $4 billion of profits under public ownership.
Last year, the operating profit was $246 million in the last financial year and $125 million in the first half of this year.
In the next decade, it will make nearly $4 billion more. The ‘turnaround plan‘ of capital investment in Kiwirail will be worth $4.6 billion. $750 million of that will be new Crown investment (about 7% of what will go into state highways over the same period). The remainder will be reinvestment of profits.
Wow. We invest $690 million in a vital piece of national transport infrastructure and, on top of all the value it gives to the economy as a network, it is set to make 6 times its purchase price by 2020 all of which will go into improving the network.
Pretty sweet.
Powered by WPtouch Mobile Suite for WordPress