Sponsored content by
The rail freight service north of Hawke's Bay has been thrown a lifeline by a consortium which could yield financial gains to regions along the route, with plans to be running out of Wairoa by Christmas.
Hawke's Bay Regional Transport Committee chairman Alan Dick said a bid had been made by a commercial consortium to revive the line.
Respected and highly successful road and rail transport operators, industry representatives and professional business advisers formed the consortium, Dick said.
The private companies included excursion operators and a New Zealand-based firm operating short-line rail services in Australia, although the exact details were yet to be revealed.
Gisborne firms Weatherell Transport and Leaderbrand were believed to be involved.
"For the past two months investigations have been under way to determine the feasibility of a separately run, privately owned, short-line rail service, leasing the line and infrastructure from KiwiRail,'' Dick said.
An investment proposal should be ready to be considered in four to six weeks, Dick said.
"With all parties co-operating, good management and a bit of luck, trains could be running out of Wairoa by Christmas."
Wairoa Mayor Les Probert said if it went ahead it would be of benefit to Wairoa but was cautious about how much.
"It all depends on how much freight they can get going through as to the actual benefit."
Napier Mayor Barbara Arnott said she welcomed the private initiative but warned it needed to be sustainable.
"It they can keep it running long-term it will be good for the whole region.
"We [the mayors in the region] have been working with the Government to make the region financially productive for the next three decades and this initiative needs to fit in with that."
KiwiRail applauded the enthusiasm for rail and finding a way to make rail a viable proposition in the region, chief executive Jim Quinn said .
"We have always said that investment in rail is possible where the commercial outcome is positive, however, that has yet to be proven."
They would support of any initiative that means a commercial outcome for the line, he said.
The Napier to Gisborne rail line was mothballed late last year due to high maintenance costs and expensive storm damage that KiwiRail were not prepared to repair.
At the time KiwiRail estimated reinstating the line would cost about $4 million - with ongoing maintenance costs likely to rise above $2m a year.
KiwiRail said the line needed to carry about 600,000 tonnes of freight per year to be financially viable and before the closure Quinn said the 50,000 tonnes it was doing was "not within a million miles of that".
In January those figures were called into question by a Business and Economic Research Limited (BERL) report.
Maintenance could be done at $1.2m per year and the tonnage necessary for the line to be cash neutral after direct costs is a range of about 130,000 tonnes to 230,000 tonnes of freight per year, the report said.
If some possibilities like shipping of Gisborne's waste and fertiliser were added to conventional shipping, then the line could exceed 200,000 tonnes of freight per year, the report said.
Whether these figures can be made into a reality will be key in the next four to six weeks as the consortium completes its investment proposal.
- © Fairfax NZ News