Taken for a ride? – KiwiRail to probe ‘double-dip’ claim on wage subsidy

KiwiRail is investigating whether it claimed the wage subsidy for its Te Huia crew while also receiving full salary payments from Hamilton ratepayers.

The passenger rail service began operating in April this year – about 12 months after its planned launch date – but was suspended in August following an outbreak of the Delta variant in Auckland.

Te Huia’s books, which were laid bare this month, show the service earned $298,062 from April to October but racked up $3,032,452 in gross operating costs.

Despite the service not launching until this year, Hamilton ratepayers contributed to the funding of Te Huia in 2020 via a targeted rate levied by the Waikato Regional Council.

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Te Huia’s fixed costs include on-board staff salaries.

City councillor Ewan Wilson,​ who serves as the council’s representative on the rail governance group, said questions put to KiwiRail indicate the rail operator may have claimed a wage subsidy from the Government in 2020 while also receiving payments from the Waikato Regional Council.

The financial costs surrounding Te Huia requires "absolute transparency" says Hamilton city councillor Ewan Wilson (file photo).

Christel Yardley/Stuff

The financial costs surrounding Te Huia requires “absolute transparency” says Hamilton city councillor Ewan Wilson (file photo).

“I think what we’ve discovered is that, in fact, KiwiRail may have double-dipped and KiwiRail may have not only received salary payments from Waikato Regional Council, but they also may have received payments from central Government,” Wilson said.

“KiwiRail have said they’re going to look into that and, in fact, if that has occurred, they will be making some refunds.”

The lack of transparency around Te Huia’s finances has been a source of frustration among Hamilton politicians. Councillor Rob Pascoe,​ who chairs the city council’s finance committee, said he had been seeking to open up Te Huia’s books for months.

Wilson said Waikato Regional Council staff have given him an assurance that monthly updates on Te Huia’s financial performance will be provided to city politicians.

Hamilton city councillor Dave Macpherson says if KiwiRail is found to have double-dipped, any refund would go back to the Government, not Hamilton ratepayers (file photo).

Tom Lee/Stuff

Hamilton city councillor Dave Macpherson says if KiwiRail is found to have double-dipped, any refund would go back to the Government, not Hamilton ratepayers (file photo).

“This is a publicly funded project and absolute transparency is required,” Wilson said.

“The facts just don’t lie, and we’ve just got to put them out there …”

Councillor Dave Macpherson​ said there has been “almost zero scrutiny” of Te Huia’s financial details up until now. Thanks to Wilson’s efforts, its books have been opened up and problems have become apparent.

“There were some very sweaty armpits [among] the regional council staff there I’m sure because they were being scrutinised for the first time ever in an area that their own councillors, one would have hoped, might have been doing that,” Macpherson said.

If KiwiRail is found to have double-dipped last year, any refund will be paid back to the Government and not Hamilton ratepayers, Macpherson said.

Prime Minister Jacinda Ardern helped launch the Te Huia passenger rail service in March. The service began carrying passengers on April 6.

Christel Yardley/Stuff

Prime Minister Jacinda Ardern helped launch the Te Huia passenger rail service in March. The service began carrying passengers on April 6.

Te Huia is expected to resume service on January 24 and will take Waikato passengers direct to The Strand in central Auckland. The service will include an extra daytime return service to Hamilton, a slightly later morning departure from Waikato, and new family passes. It will also give Auckland passengers the option of travelling to Hamilton during the day.

Auckland’s Puhinui station will be added to Te Huia’s service in 2022, which will allow passengers to then travel on to Auckland Airport.

Meanwhile, city councillors have voiced annoyance with Hamilton City Council’s wider relationship with the Waikato Regional Council.

City councillor Angela O’Leary​ sits on the Waikato regional transport committee which is chaired by regional councillor Hugh Vercoe.​ O’Leary’s alternate at the meeting is Macpherson who, Vercoe has ruled, can’t ask questions at the committee’s meetings.

Councillor Martin Gallagher​ said denying the city a voice at the committee’s meetings is “ridiculous”.

“This is a situation where the nation’s fourth largest metro area has to go cap in hand and beg for a second voice … frankly, it’s not good enough,” Gallagher said.

“This is a classic example of where local government is now, in this region, not fit for purpose.”

Hamilton mayor Paula Southgate​ said there are several issues she needs to discuss with regional council chair Russ Rimmington​ relating to the two councils’ working relationship.

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