Cabinet is next week expected to consider and approve a structure for its newly acquired Kiwi Rail business, as well as a significant new investment of around $80m in rolling stock, locomotives and infrastructure. The favoured structure is an over-arching entity (NZ Railway Corporation?), with two operating divisions, one of which will be Kiwi Rail, responsible for running the trains, and the other Ontrack, responsible for maintaining and upgrade the track. One of the first functions of the Board of the new entity will be to select a CEO.

The Govt is understood to regard it as a priority to earmark funds for new locomotives (the newest in the current fleet dates back to 1986). Jim Bolger whose appointment as Chairman of Kiwi Rail was regarded as a coup by the Govt (and an embarrassment for the National Party) is likely to be named Chairman of the new Board. Head office for the NZ Railway Corp is expected to be in Wellington, along with the Ontrack division, but Kiwi Rail’s HQ is likely to remain in Auckland.

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