Logging could save Napier-Gisborne rail line

Thursday, 29 January 2015

Restoring the Napier-Gisborne rail line may not be viable, but getting half of it back in use could be an option.

KiwiRail is willing to lease the disused line to Hawke's Bay Regional Council so a private rail operator could be found to operate a freight service.

The council put $250,000 towards a business case looking at the merits of investing $5.5 million in a proposal by the Napier-Gisborne Shortline Rail Group (NGR), a group of six men keen to see the line back in use. The line was mothballed after washouts of the track between Wairoa and Gisborne in 2012.

Last September KiwiRail gave the council and NGR until March 1 to provide the business case.

At a meeting yesterday, the council heard from Nick Cornwall, an independent consultant it employed for advice. He was confident NGR would have a business case within three weeks but said drafts indicated significant early trading losses and a significant demand for capital. 'I have some concerns that those demands for capital won't be met by NGR.'

NGR's proposal is understood to require about $10m in private money for locomotives, rolling stock and working capital.

The council yesterday gave Cornwall approval to consider an alternative to the business case for a Napier-Gisborne line, and discussion at the meeting revolved around the viability of a shorter Napier-Wairoa line. This was largely due to early work that found there was insufficient freight demand in and out of Gisborne to justify the $3.5m to $5m reconstruction required on the washed-out part of the line.

A paper before the council said there was a significant opportunity to carry export logs from Wairoa and nearby sidings to Napier Port.

'No major capital investment in the Napier to Mahia section of the line is required initially, so a Wairoa service could run on the track in its current condition, according to KiwiRail sources,' the paper said.

NGR's business case will be presented to the council next month.