Passenger and freight rail is a step closer to reality following the presentation of a report to Bay of Plenty's transport leaders.

But not everyone is convinced.

A draft report of the phase one of the Bay of Plenty Region Passenger and Freight Rail investigation was heard at the Regional Transport Committee yesterday.

Western Bay of Plenty's Urban Development and Transport Initiative (UFTI) project manager Janeane Joyce said although there was capacity for future passenger rail services on the Bay of Plenty network, the reality would be extremely expensive.

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"When you are talking millions of dollars, you want to make sure you are putting that in the right mode in the right time," she said.

"If we really understand why people would choose passenger rail, catch light rail, etc, that would make decisions easier for us going forward."

Joyce recommended the committee seek discussion with central Government to establish its position on passenger rail for the Bay, including their appetite to invest in an extension of the Hamilton to Auckland start-up trial.

This trial is expected to cost $80 million to start and $10m a year to keep running. Only $2m is expected to be made in return from fares.

Joyce also referred to future freight opportunities with Kawerau exporters and Affco's Rangiuru meatworks but admitted rail was unlikely to be a "silver bullet" for the region's transport woes.

Rotorua Mayor Steve Chadwick said reopening passenger rail direct from Auckland to Rotorua would be a
Rotorua Mayor Steve Chadwick said reopening passenger rail direct from Auckland to Rotorua would be a "coup". Photo / file

Councillor Larry Baldock, acting chairman for Tauranga City Council's Transport Committee, said the council was concerned.

"This city is never going to grow large enough to justify us having rail for passenger rail," he said.

"It's just insane when you don't have a population density, we should not spend any more money on this and take time away from UFTI when there are all those other things that need to be worked on."

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Port of Tauranga's Dan Kneebone said careful thought and consideration was essential in exploring rapid transit.

"As Kiwi Rail's biggest customer, we understand what freight demand is and we don't think it will be good for the city.

Rotorua Mayor Steve Chadwick said there used to be rail from Auckland that was popular.

"That's an opportunity that can be reopened very quickly. It would be a huge coup [for tourism] to have a direct link from Auckland instead from the thousands of mini buses and three-hour trips."

The committee resolved to explore the rail options through UFTI and other relevant strategies.