A year ridden with breakdowns and asbestos has left KiwiRail’s books in a state.

The state owned enterprise reports a 28 percent drop in its operating surplus.

Chief executive Peter Reidy says repairing the Aratere ferry’s propeller shaft and dealing to asbestos in its new locomotives has cost a fortune.

He says these events are disappointing as KiwiRail’s freight business was on track to exceeding its revenue targets at the start of the year.

He says the entity’s learning from the year’s mistakes and keeping focussed on maintaining its assets long-term.