It's not the end of the line for rail link, says council

Regional council chief executive Liz Lambert

Hawke's Bay Regional Council says it hasn't given up on plans for a rail-based log freighting operation between Wairoa and Napier.

It comes despite KiwiRail closing the door on discussions last month.

The state-owned company, which owns the mothballed Napier-Gisborne line, declined a request from the council for an extension of time - beyond March 1 - to develop a business case based on leasing the line.

Last year the council set aside $5.46 million to potentially part-fund the resurrection of a freight service on the line.

It commissioned a study which concluded there was sufficient demand from forest owners wanting to ship logs from Wairoa to Napier Port to make the project viable.

However, more time was needed to firm up commercial interest and complete a detailed business case.

But last month KiwiRail said it was not prepared to extend the deadline given there were still a "significant number of fundamental outstanding issues yet to be resolved".

Regional council chief executive Liz Lambert said yesterday the two organisations were still talking with a view to finding a mutually acceptable solution. "We haven't given up hope of being able to look for a solution yet," she told a meeting of the council's corporate and strategic committee.

Meanwhile, Labour MP Stuart Nash said this week the council lease proposal was "a fantastic idea" because the east coast needed "first world infrastructure" including a decent rail link to drive economic development.

"If we haven't got the infrastructure, nobody is going to invest," he told a Grey Power meeting in Taradale on Tuesday.

"Peter Reidy, the CEO of KiwiRail, has been a mate of mine for a long, long time - way before politics. I've been having a couple of conversations with him and trying to figure out what is going on here," Mr Nash said.

"I can't say we'll get there in the end but I'm actually really confident we will."

The Government has dismissed the council's plans, saying there is no evidence to support the claim the rail link could be economically viable.