Neil Buchanan" Railway to reap early rewards

CONSIDERABLE research has been undertaken over the last year by the Establishment Group for the Napier Gisborne "shortline" Railway to create a robust case to ensure that this venture will be successful.
The railway will be profitable in the short term as freight volumes grow to over 400,000 tonnes per year.
Inclusive of the estimated $3.5 million to $5 million to repair the washouts and getting the line open to Gisborne, it is expected that the entire route will be profitable within six to seven years. If the cost of the washout repairs were excluded, the railway operation would break even in four to five years.
The feasibility process began with a detailed assessment of the freight volumes for different types of freight and customers, taking into account seasonality factors. Revenue projections have been developed using a conservative estimate of the freight volumes most suitable to rail and comparative pricing with road freight rates.
In the months before the line closed, the involvement of the regional transport operator, Weatherell Transport, demonstrated the potential by successfully shifting a large volume of containers from road to rail from Gisborne to Napier and beyond.
This involvement of a local road transport freight forwarder/operator as part of the Napier Gisborne Railway operations is a key success factor.
This feasibility evaluation process found that there is strong interest from amongst forestry management companies to using rail in conjunction with trucks. They are already using rail to complement their use of trucks from logging sites to a railhead hub in other parts of the North Island, such as from Masterton to Wellington and across from the western side of the North Island to Napier Port. They understand the benefits of this integrated logistics approach.
One of the largest forestry management companies has had their representative as part of the Napier-Gisborne Railway Shortline Establishment Group from the start of the group being set up in March last year. The establishment of a log hub operation at Wairoa, including electronic scaling of logs as part of the railway operation, is seen as one of the positive developments being offered by the Napier Gisborne Railway shortline integrated transport operation.
Several months have been spent on gaining independent specialist advice and detailed information from both within and external to KiwiRail on the condition and estimated costs of work required for the track and for the bridges and other infrastructure.
A track assessment report from a leading track specialist, Harvey Armstrong, was commissioned. He has provided a detailed annual track maintenance plan and budget for the first eight years of operations. Additionally there has been an assessment of the projected maintenance tasks and costs for each bridge and tunnel.
These reports have established that the railway; apart from need for the current washouts to be repaired, along with a catch up in culvert and drain clearing, spot sleeper replacements and other forward planning for risk resilience; is in generally sound condition.
Early on particular attention was given to checking reports and getting additional engineering assessments on the condition of the Westshore bridge and major viaducts. This work established that a substantial amount of maintenance work including strengthening of the Westshore bridge has been carried out in recent years and that other bridges are in good structural condition.
This investigative work has provided a high degree of confidence that no major additional work is needed on the bridges over the next 10 years. However, there will be a gradual increase in maintenance requirements over 10 years in line with the aging of the structures.
The operation of the Napier Gisborne Railway as a regional venture providing improved transport infrastructure for forestry and primary produce is part of an international trend that has seen strong growth of successful regional shortlines that serve businesses in their local communities.
In North America in particular there are now about 550 of these small to medium sized railway businesses that have become the workhorses of the North American rail network. This business model is well established.
In New Zealand we have seen the success of the Taieri Gorge Railway that was established with the assistance of Dunedin City Council 20 years ago. This operation is on a much older track and over wrought-iron bridges from the 1880s compared with the younger 1930-40s Napier Gisborne line. In practice, with careful regular attention to basic maintenance, there have been no significant bridge maintenance or other major infrastructure costs, and the operational running costs have been kept to modest levels.
There has been no additional government or local government funding provided after the initial establishment costs for this railway business. The positive publicity from the success of this venture has helped to promote Dunedin and the Taieri Gorge area internationally.
The central message from the track and engineering specialists and the reports obtained is that this is a railway in generally good condition (apart from the obvious issues of the dropouts). Careful attention to basic regular maintenance of drains and culverts, regular monitoring and basic work as required to bridges, and spot sleeper replacements along with the use of lighter locomotives and care with train speeds, is expected to ensure the line has at least a good 20 years of life before any more major expenditure will be required. Those 20 years cover the important peak forest harvest period.
# Neil Buchanan is Rail Advisor to the Napier-Gisborne Rail Establishment Group
Business and civic leaders, organisers, experts in their field and interest groups can contribute opinions. Email: editor@hbtoday.co.nz.