Rail report says Napier-Gisborne line viable



An independent review has found flaws in KiwiRail's decision to close the Gisborne to Napier line and suggests the tonnage needed to keep the route viable can be achieved with new commitments from regional businesses now coming forward.

The review, released this morning, was paid for by donations from the public and written by economists at Business Economic and Research (BERL) then reviewed by a specialist international rail engineering consultancy.

It said KiwiRail's analysis that it would take 1.5 million to 2.2 million tonnes of freight on the line per year to make the operation commercially viable was flawed.

A closer look at the KiwiRail analysis indicates the tonnage needed for the line to be cash flow neutral could be similar to the level of tonnage which the local community now indicated could become available, about 180,000 tonnes to 200,000 tonnes per year, the report said. Wood and wood products initially on the Mohaka to Napier route could attract 750,000 tonnes per year and eventually lead to the rail line becoming economically viable and potentially profitable "in a few years".

Moving 750,000 tonnes from Mohaka to Napier would be equivalent to taking 83 trucks a day off the highway, each of 344 tonnes gross, carrying about 20 tonnes of logs.

New Zealand Transport Agency information in the KiwiRail report states there were 220 to 250 trucks per day on the road and the level of rail freight expected would prevent truck numbers increasing by 33 per cent to 38 per cent.

NZTA had spent $102 million on the Napier to Gisborne road in the past 10 years and an average of $14.8 million in the past four years.

"If the number of trucks and heavy trucks at that, increased by 33 per cent to 38 per cent because of the rail line not available for wood freight, the annual spend on the road can be expected to increase at least $4.9 million to $5.6 million per year," the report said.

KiwiRail's scope was to complete a commercial analysis but the report said a broader economic view was needed in order to provide sound evidence to people who make decisions on the line's future.

The report said a cost-benefit analysis was needed next to provide a guide for the future of the rail route.

In a statement last night, Kiwirail chief executive Jim Quinn said his company was "satisfied that the figures in our report are robust and our view remains the same - if we thought we could run a commercial operation on that line we would be doing so".

"The BERL report is essentially a brief desk-top assessment of a highly complex business case ... we do not consider volume growth in the ranges required to be realistically achievable and, therefore, the line is not commercially viable."

- Hawkes Bay Today

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