Railways may need Govt support

Press, 21 April 1986, Page 14

Railways may need Govt support

PA Wellington The options of the Railways Corporation for surviving its financial crisis might include asking the Government for support, said the general manager, Mr Gordon Purdy, and his deputy, Mr Bob Henare. The corporation expects to lose up to $65 million this year. “If we did go to the Government it would be for general support and guidance. We would not be asking for a $65 million handout,” Mr Henare said.

The options would go to the corporation board soon.

“We are certainly going

to have to make ourselves more efficient But whether we will go to the Government has yet to be decided,” Mr Henare said.

Mr Purdy and Mr Henare would not say how much of taxpayers’ money would be asked of the Government in its role as shareholder, nor when the board would act on the options it was preparing. When the expected loss was announced by the Minister of Transport Mr Prebble, he blamed much of the crisis on the $llO million extra payroll needed to cover wage increases.

Large staff redundan-

cies and voluntary redundancies and retirement have also been suggested as alternatives for the corporation. Since it was formed hurriedly into a corporation by the National Government, Railways has borrowed more than $420 million, mostly overseas, and has been hit hard by interest rates and currency fluctuations.

Mr Henare said that if the Government did help financially, the money would not be directed into a single area. The $2OO million Main Trunk line electrification was not affected and was self-supporting, he said.