KiwiRail invited to run new Wairoa-Napier log train

Thursday 28th April 2016

The Hawke's Bay Regional Council has amended its bid to reopen the railway between Napier and Wairoa by proposing that KiwiRail run the service as well as maintain the tracks under a proposal signed off in a closed-doors council meeting late last week.

HBRC's interim chief executive Liz Lambert confirmed to BusinessDesk that the proposal, for which commercial details are not being released, related only to establishing a log transport service from Wairoa to the Port of Napier, with no early prospect of the discussion turning to reopening the badly slip-damaged line between Wairoa and Gisborne.

A decision on the service has been much delayed and Lambert confirmed HBRC had originally proposed having a third party operate the service.

"This is an alternative proposal we are putting to KiwiRail," she said.

KiwiRail chief executive Peter Reidy said in an interview this week that he was expecting a proposal from HBRC, but that to be acceptable the council and any commercial partners would need to bear the whole commercial risk of the line being restored to operability and maintained.

"We want a take or pay arrangement, we won't take the commercial risk," he said. "If HBRC is the only customer, then we would expect full cost allocation."

Lambert declined to discuss the details of the proposal, which now requires both agreement with KiwiRail and the confirmation from forest owners in the Wairoa/Nuhaka region, where large-scale plantation forests are fast coming to maturity, that they will use the service.

"We need to sign sufficient customers to make it viable," said Lambert. "We're starting on that track now."

Wairoa export log harvests are forecast to treble to a million tonnes by 2020 and increase after that time. A key reason for the regional council's decision to underwrite a rail route reopening is its concern to prevent a massive surge in truck volumes on the main highway between Wairoa and Napier. Forest managers estimate half of the coming volume of logs can move by rail from a log hub at Wairoa.

Lambert held out little hope for the aspiration of Gisborne log-owners and fresh produce sellers to reopen the Wairoa to Gisborne part of the line.

"We are focusing on Wairoa to Napier, no further north, certainly in the medium term," she said.

BusinessDesk.co.nz

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