KiwiRail plans to cut up to 220 jobs from its engineering department as a cost-cutting measure after poor trading conditions and the effect of the Christchurch earthquakes.
It is proposing to cut between 170 to 220 track jobs by October to save $14 million.
"We need to reduce the people budget by $14 million or 20 per cent," staff were told in a consultation document. Further cuts in staff were likely next year.
"By the end of July 2012 we will make a decision as to what staff reductions are required so as to retain essential skills and competencies."
A consultation document obtained by New Zealand First shows its infrastructure and engineering business needs to reduce expenditure by $200 million in the next three years. It had planned to spend $950 million.
The Rail and Maritime Transport Union's general secretary Wayne Butson said consultation meetings began in the Far North two weeks ago.
Meetings with KiwiRail employees were being held this week in Marlborough, the West Coast, Dunedin and Invercargill.
"It's a shock to people. These people know the state of the tracks. Their job is to repair, maintain and upgrade the track and infrastructure. They know the condition of the asset after 1993 through to 2008, during the privatisation years. A lot of money has gone into the track, but the track is nowhere near being restored back to its pre-privatisation state."
He said the union expected worker numbers would decline at some stage - but not this soon.
The office of State Owned Enterprises Minister Tony Ryall has issued a statement saying he knew KiwiRail were consulting staff over possible staff reductions, as one of a number of measures.
He said it was a decision for KiwiRail and would not comment further.
Labour Party transport spokesperson Phil Twyford said KiwiRail was an important asset that needed to be properly funded.
"KiwiRail is being forced to make these lay-offs by unrealistic financial targets in its turn-around plan and the turn-around plan was designed before the Christchurch earthquakes and before the international financial crisis began to bite and as a result of that KiwiRail has been unable to meet revenue targets," said Mr Twyford.
"KiwiRail invests $4.5 billion in capital expenditures, but the Government only pays $750 million of this so KiwiRail has to find the rest from its own balance sheet - it's extremely ambitious."
New Zealand First transport spokesperson Brendan Horan said the cuts would create risks for staff and passengers who use the rail system, and it was another example of the Government's shocking record on risk management.
"It signals the start of a bigger plan to undermine the role of the rail network and prepare it to be sold off to a private investor," he said.
