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City Rail Link to meet with Australian administrators of failed engineering firm

The head of City Rail Link expects financial support for one of its key partners to continue, despite the company's owner going into administration.

RCR Tomlinson went into administration last week, just six weeks after its New Zealand subsidiary RCR Infrastructure was jointly awarded one of seven contracts for the $3.4 billion City Rail Link.

City Rail Link chief executive Sean Sweeney last Friday met with the New Zealand arm of McGrathNichol Services, the administrator appointed to run the company, and said it was positive.

He was told the Australian administrators would be going through the business and identifying the profitable parts of the business to be sold in some form of trade sale.

Mr Sweeney said it was indicated that the rail business had been identified as one of the profitable parts of the business and there were people looking at a possible purchase.

"So they were very keen to take that forward, and to that end they were looking at getting further support from the banks so that the businesses would continue trading comfortably whilst all this was going on."

Mr Sweeney said the administrators seemed confident they would get the support from the banks, but he would be checking this when he flew to Sydney next Friday to meet with the Australian administrators.

Taxpayers are going to pay half the cost of Auckland's multi-billion dollar City Rail Link. Source: 1 NEWS

"I would just like to now go and meet the actual people who are doing the work and basically get the same message from them as we got on very positive terms from the Auckland-based administrator."

He expected to get an update and more detail on the process, as well as a timeline from the Australian administrators.

Mr Sweeney said all indications from the administrator were that disruption to the New Zealand business would be minimal because the administrator wanted to get financial support to allow the profitable arms of the business to keep trading.

"It would be in their interest to minimise that disruption because if they're going to put them up for sale they obviously want them performing in the best light possible, so that's one of the things we just want to find out a bit more detail."

By Kate Gudsell

rnz.co.nz

But rail link bosses are confident the project isn't at risk. Source: 1 NEWS