Local loco assembly is "madness" 

Opponents of the government's rail buy-back scheme are rubbishing a proposal to have locomotives built in New Zealand.

As the new owner of KiwiRail the government wants to revive an old industry.

"There is a possibility of assembling locomotives in New Zealand. It is probably a very logical thing to do from a currency perspective, from a value for money perspective," said Trevor Mallard, State Owned Enterprises Minister on TV One's Agenda programme.

"Well at the moment we take locomotives apart and put them back together at the Woburn workshops in Wellington and that's a good place to do it."

Labour says assembling locos will create jobs and business opportunities.

However, opponents say it is back to the bad old days.

Critics say with KiwiRail expected to run at a loss for the first few years, it will mean even more unjustified and wasteful spending.

"When New Zealand had those sort of protections which saw us basically reassemble products that were manufactured overseas, every New Zealander paid the price," says Gerry Brownlee, National State Owned Enterprises spokesman.

"Its madness and it will really just exacerbate the extraordinary price we've already paid."

The government confirmed on Sunday that KiwiRail will be run at a loss for first few years, although it could be helped by funding changes.