Since re-opening on January 26 the service has been used only three times and at the moment is not currently in use. Photo / Mark Peters
Since re-opening on January 26 the service has been used only three times and at the moment is not currently in use. Photo / Mark Peters
The rail line between Wairoa and Napier is being shunned by the logging industry, just over a month after a $6.2m investment to reopen it came to fruition.
Coronavirus has caused a "market crash" for logging in Hawke's Bay, and those affected say it's cheaper to transport logs by truckin current conditions.
Since January 26's first train, only two further trains have travelled down the line, and the line is "not currently in use", a KiwiRail spokesperson said.
"At this point in time we are seeing a slow down in some areas as a result of international conditions."
Those international conditions are the outbreak of coronavirus and its effects on the world's finances.
Hawke's Bay Forestry Group chief executive Keith Dolman said many of those logging in Wairoa have their "back to the wall" at the moment.
"Because of the market crash their first priority is to support the existing infrastructure, trucks in this case, which is critical in terms of getting logs off the hills," he said.
"With reduced activity, it makes complete business sense to keep these services in operation in the meantime."
Dolman said because log prices had dropped, trucking the logs was the most cost effective way to transport them at this time.
The railway had been out of action for close to eight years after a storm in 2012 caused slips which damaged the line.
The Provincial Growth Fund granted $6.2m to KiwiRail in 2018 to reopen the line and it was believed it would transport logs to Napier Port at least twice a week.
Regional Economic Development Minister Shane Jones oversees the funding group and also attended the line's reopening.
He did not want to comment on Tuesday.
Tukituki MP Lawrence Yule said that while the impact of the coronavirus has been unfortunate the cost of transporting the logs on rail has always been higher than direct road transport.
Regional Economic Development Minister Shane Jones attended the official opening of the Wairoa/Napier rail link back in June, 2019. Photo / Warren Buckland
"The coronavirus is unfortunate, however, only one train operated before the virus broke out in China," he said.
"The basic economics are the issue rather than the virus."
Dolman said those in the industry were working to find other markets as China tries to get back to the full swing of things.
"The China timber processing industry has been operating at a very reduced scale and while it is getting back to work, it will take time before the surplus logs are cleared from the ports," he said.
"In the meantime, companies are viewing other markets and still trading, albeit on a reduced basis."
Napier Port CEO Todd Dawson said that while it has been running mostly as normal it was aware of a potential back log if China's ports struggle to process their large surplus of logs in time.
While Hawke's Bay's forestry industry waits to see the impact of the virus on it long term financial relief is on the way.
Tax Management NZ (TMNZ) has set aside $30 million to help cash-strapped taxpayers in the forestry industry defer payment of provisional tax for the 2020 income year until June next year.
The tax pooling provider's fund is specifically for forestry businesses, and businesses which directly service the forests such as logging, transport and milling operations.
Its offer comes after TMNZ was approached by the industry to see if its IRD-approved service could be of assistance to those looking to conserve cash in the wake of current downturn caused by coronavirus issues in China, says company chief executive Chris Cunniffe.
TMNZ has shared the details of this proposal with the NZ Forest Owners Association and the Forest Industry Contractors Association.
