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Railway Wagons—Cost

Tuesday 12 July 2011 Hansard source (external site)

Curran11. CLARE CURRAN (Labour—Dunedin South) Link to this
to the Minister of Transport

Does he stand by his statement of 23 June that the price difference between building flat deck rail wagons in New Zealand and overseas was in the order of 25 percent?

GuyHon NATHAN GUY (Associate Minister of Transport) Link to this

Yes.

CurranClare Curran Link to this

Will he confirm that it makes economic sense to procure these wagons in New Zealand, given that the Government collects income tax when wages are paid and GST when wages are spent, even if Chinese wagons are a bit cheaper; if not, why not?

GuyHon NATHAN GUY Link to this

All that the Minister has asked of KiwiRail is that it gets the best price and quality possible for the tender, and he believes that it has done that. It is up to KiwiRail to take those things into account when it awards a tender. It is not for politicians to intervene.

CurranClare Curran Link to this

Is the Government saying that when it comes to a choice between a Kiwi build and an overseas build, KiwiRail should always choose the cheapest price, even if the price difference is very small; and what is a tolerable price difference?

GuyHon NATHAN GUY Link to this

I come back to the substantive point that there is a 25 percent price differential. The proposal from the Hillside workshops was third equal out of nine tenders. KiwiRail took into consideration all of the differences in the tenders and made its decision. It is interesting that this Government is just following on from Labour’s policy of August 2007 on Government procurement in New Zealand.

MallardHon Trevor Mallard Link to this

I raise a point of order, Mr Speaker. That was a very specific question about not that sale but tolerances and whether the Government would ever approve a tender with a price higher than that of another tender. It was very carefully drafted and very specific. The Minister talked about the old sale, but did not look forward in the way that he was asked to.

SmithMr SPEAKER Link to this

The question actually sought an opinion. It asked the Minister at what point the Government would see this differently, and I think the Minister pointed out in his answer that the Government has required KiwiRail to consider these matters, and therefore he declined to express a view on any price difference. It is difficult for me to pull a Minister back when an opinion has been sought in the question and the Minister chooses to answer it in that way. I accept the point the member is making that the member had tried to get the Minister to express a view, but I cannot get a Minister to express the particular view members might want. When an opinion is sought—

MallardHon Trevor Mallard Link to this

Any view would do.

SmithMr SPEAKER Link to this

Order! When an opinion is sought, it is a bit difficult for me.

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