Covid-19 coronavirus: Financial support for Dunedin Railways not covered in council budget

If Dunedin city councillors decide today Dunedin Railways Ltd requires financial support, it will have to come from money that is not in the council's budget. Photo / ODT

If Dunedin city councillors decide today Dunedin Railways Ltd requires financial support, it will have to come from money that is not in the council's budget.

The Dunedin City Council draft 10-year plan out for public consultation does not include backing for the council-owned company.

However, all four of the short-listed options to be considered by councillors would require funding from the council.

If the city retains ownership of the train service, running it is expected to cost about $1.6million a year while international tourism remains constrained.

If the train runs on the Taieri Gorge line, which is owned by Dunedin Railways, from $6.5million to $14.8million would be needed for the line's upkeep in the next 10 years.

The amount would depend on how far from Dunedin maintaining the line extended.

Work would include protecting bridges from corrosion and replacing sleepers.

One of the options before councillors is a sale or lease of the train operation to an unnamed entity.

The short-term cost of the option has been labelled commercially sensitive.

Winding up Dunedin Railways would impose its own costs of about $150,000.

The company has been in hibernation since July last year.

It had become reliant on customers from cruise ships and moves were being made to create a more sustainable operation when Covid-19 devastated the international tourism sector.

Councillors chose to mothball the operation, rather than shut it, and then they backed a summer trial of limited services.

The results of the trial, which produced more revenue than had been expected, are expected to influence the decision-making of councillors.

A delegation from the Rail and Maritime Transport Union is expected to present views to councillors today.

The union has called on councillors to retain a rail service on both the national network and the Taieri Gorge line.