Study shows no case for rail line, says Brownlee

Transport Minister Gerry Brownlee says a study into the economic performance of the East Coast region shows there is no case for reopening the Napier-Gisborne rail line.

Transport Minister Gerry Brownlee says a detailed study into the East Coast region's economic performance and potential, released today, shows there is no case for reopening the Napier-Gisborne rail line.
Mr Brownlee and Economic Development Minister Steven Joyce were in Gisborne today to launch the East Coast Regional Economic Potential Study which assesses the region's economic performance and barriers to development.
Mr Brownlee said the study shows the economic importance of maintaining and boosting the road network in the East Coast, particularly in Gisborne, but says growth in expected wood shipments out of the region are not high enough to justify re-opening the mothballed rail line.
"There will be an increase in logging freight over the next decade and improved roading will be vital to support that and other industries," Mr Brownlee said.
The report says forecasts suggest wood processing freight could grow from 150,000 tonnes in 2012 to between 260,000 to 430,000 tonnes over 20 years. But a 2012 KiwiRail assessment found the line needed between 400,000 and 800,000 tonnes to be viable. Not all the wood expected to come on stream over the next two decades would be shipped through Napier Port.
"When operational, rail only accounted for 2 to 3 per cent of freight from the region and the report finds no clear evidence of a significant economic impact following its closure," Mr Brownlee said.
"The study illustrates the need to develop further capacity for heavy vehicles on State Highway 35 north of Gisborne and to maintain the quality of State Highway 2 between Gisborne and Napier, and northwest of Gisborne to the Bay of Plenty," he said.
"I will be asking the New Zealand Transport Agency to review its plans for these highways in light of this study."
Hawke's Bay Regional Council has earmarked just under $5.5 million in its draft annual plan to re-establishing the Napier-Gisborne line, but the council's investment would be dependent on KiwiRail and the Government reopening the line and fully funding its return and that of associated infrastructure in a good "fit for purpose" condition.
Regional Council Chairman Fenton Wilson, who was in Gisborne for today's launch of the study, said the council would continue to consult with the Hawke's Bay community over the rail investment proposal through its annual plan adoption process, but the idea would not progress without government support.
Mr Joyce said the East Coast had a strong primary sector ranging from forestry, livestock farming and meat processing to horticulture, viticulture and food and beverage manufacturing, and the report shows there was potential to develop more innovative, higher-value processing to support these industries.
"The report also notes other economic opportunities such as the untapped potential to attract international tourists, and the development of the oil and gas industry. Large scale oil and gas production would result in the local economy growing by 27 per cent with an additional 3,300 jobs." Mr Joyce said up-skilling the existing East Coast workforce and attracting skilled workers to the region were fundamental to economic growth.
"The study has shown emerging skill shortages across the spectrum, without which the region cannot grow. Over the next decade there is expected to be greater demand for managers, engineers, transport specialists, machine and plant operators, and labourers in forestry and wood processing. Some of these skills will need to come from outside the region but there are excellent opportunities to further lift training, particularly for young Maori."
Mr Joyce said the study would help the East Coast to assess whether it wants to take up the opportunities for jobs and economic growth in its region.
The study was jointly commissioned by the Ministry of Transport and Ministry of Business, Innovation and Employment in collaboration with the Gisborne, Napier, Hastings and Wairoa District Councils, the Hawke's Bay Regional Council, and Te R?nanga o Ng?ti Porou, Te R?nanga o Turanganui a Kiwa and Ng?ti Kahungunu Iwi Incorporated.
It forms part of a series of regional economic growth studies that will be commissioned by the Government in partnership with regional organisations.