KiwiRail rejects line venture

The damaged railway line between Wairoa and Napier.

Plans to establish a rail-based log freighting operation between Wairoa and Napier were scuppered yesterday when KiwiRail said it would not allow Hawke's Bay Regional Council more time to develop a business case for the venture.

Last year the council set aside $5.46 million to potentially part-fund the resurrection of a freight service on the Napier-Gisborne line and last month it said it believed there was viable demand from forest owners wanting to ship logs from Wairoa to Napier Port.

But it needed more time to put together a business case beyond the March 1 deadline it had been given by KiwiRail to finalise an agreement to lease the rail corridor.

Yesterday 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".

The line would remain mothballed and KiwiRail would "now begin looking at rail enabled tourism ventures as possible users of the line," the company said.

KiwiRail chief executive Peter Reidy said the company had been aware for two years of other parties who were interested in operating tourism ventures on the line.

"We have not progressed any of these options - other than registering that interest - in order to give the council first preference for leasing the line," he said.

"We are however reluctant to cause further delay to progressing these discussions."

Hawke's Bay Regional Council Chairman Fenton Wilson said he was "hugely disappointed" KiwiRail had not agreed to a time extension to enable the council to further investigate the line leasing possibility, given the challenges associated with the project had proved "insurmountable" in the time available.

Central government's belief rail on the East Coast was not viable, along with the Christmas holiday falling in the middle of the period available to confirm the business case, raise funding and secure customer interest, had been among the difficulties, he said.

The council believed the challenges could have been addressed if there was more time.

"KiwiRail have declined to give us more time and while that's disappointing, I'm not saying it's all over. The council needs to decide whether it continues developing a business case or not," Mr Wilson said.

If the council decided it remained interested in the project, it was possible it could have a future discussion with KiwiRail on leasing the line once a business case was developed, he said. "We'd like the people of the East Coast to be able to shift their freight with similar options to what the rest of the country enjoys."

Hawke's Bay Tourism general manager Annie Dundas said as well as the discussion around converting the rail corridor into a cycle trail, she was aware there were "keen and eager" business people interested in looking to take advantage of the track for rail transport-based businesses.

"There are definitely tourism operators out there who are keen to look at the option."

An example of where rail tracks were being used successfully by tourism operators included in Taumarunui, she said, where Forgotten World Adventures hires out "self-driven" rail carts to tourists wanting to explore the area on the local line which the company leases from KiwiRail.