Kawerau's drive to develop an inland container terminal serving the Eastern Bay of Plenty is gaining traction, with a decision expected early next year on whether or not to go ahead.
A research study being carried out by Rotorua's Scion forestry research institute will be completed by year end, with a stakeholders meeting scheduled for January in order to make a decision.
"The research project is coming to an end and the indicative results to date are very promising," said Glenn Sutton, economic development manager at Kawerau District Council, who has been a key proponent of the terminal.
"I'm passionate about this, but we have to wait until we have the science in our hands to back it up."
If the project gets the green light, it would see a container terminal developed on a five-to-eight hectare site, with a possible throughput that could be as high as 15,000 40-foot equivalent units annually, and a dedicated daily container trainload, he said. At this point, no specific job projections were possible, he said.
Ministry of Business Innovation and Employment officials said Kawerau was a natural logistics hub, given its five major wood processing plants and a substantial engineering and service industry.
Since its formation in 2011, Industrial Symbiosis Kawerau, an industry cluster, has investigated options to reduce the cost of goods to market by enhancing the supply chain to the port, including a rail extension into the town's new industrial park.
The idea for the current concept was initiated by Industrial Symbiosis Kawerau in 2012. The genesis, said Mr Sutton, was that Kawerau's Sequal Lumber wanted a more efficient way of handling its increasing exports.
A site adjacent to Sequal's operation was initially considered, but the current preferred option is on a block of Maori land owned by the Putauaki Trust opposite the cluster of forest product operations in Manukorihi Drive.
Mr Sutton said visiting the successful new container terminal at Tokoroa had widened the horizons. And after sounding out adjacent districts such as Whakatane, packhouses and other exporters in the region, terminal supporters realised there was scope to provide a service that could be used more widely than just by Kawerau businesses.
"This would not just be a Kawerau resource," he said. "With the growth in the Eastern Bay of Plenty and the kiwifruit development, we envisage a lot of those goods could come into Kawerau for rail shipment to Port of Tauranga."
Currently the bulk of rail freight to Port of Tauranga is logs, which end up on the Mount Maunganui side of the port where the bulk cargoes are handled. Any Kawerau containers usually have to be trucked around to the Sulphur Point container terminal.
The aim of a new Kawerau terminal would be to consolidate enough container traffic to justify a daily train direct to Sulphur Point.
Steve Muir, Kiwirail's national manager, bulk and forestry, has been involved in the discussions on the proposed Kawerau terminal.
"We haven't seen the final Scion report so we can't really comment till that's done," he said. "But on general principles, we absolutely support the project of consolidating freight to enable a rail service from Kawerau to the port."
Port of Tauranga chief executive Mark Cairns also said the port was supportive of consolidating cargo at one point. "If there's a group of like-minded exporters looking to aggregate cargo on the Kawerau site, we'd certainly be supportive in any way we can."
Mr Cairns noted Kawerau was primarily an exporting location, so containers were likely to be mostly full going to the port.
The potential problem of a backflow of empty containers is one of the factors being considered in the economic modelling being carried out by the Scion team, led by Ginny Christians of the value chain optimisation group.
Carel Bezuidenhout, science leader of the Scion group, confirmed the results would be in by the end of December, after almost a year's work on the project.
"We're looking at whether there are enough economies of scale to essentially have a train with enough containers to run directly to Sulphur Point instead of via Mount Maunganui," he said.
"There is quite a bit of capacity on the link, but what you need are the economies of scale to justify doing it. You need quite a lot of volume to put on a train."
Trucking generally was a lot more expensive than rail and the longer the distance, the more sense it usually made to move to rail, he said, noting the New Zealand Transport Agency was supportive of reducing truck traffic on the region's highways.
Helen Stewart, executive director of Kawerau Enterprise Agency, said it was logical to centralise the freight activity in an industrial area where there was an opportunity for expansion.
Kawerau District Council's chief executive Russell George said the council had facilitated a range of collaborative projects related to the concept of industrial symbiosis to promote economic growth and employment in the district.
"The terminal is seen as a significant strategic asset for the Bay of Plenty," he said.
-Currently exports 2.4 million tonnes per annum of forest products, mostly to overseas markets.
-Output is forecast to increase to about 3 million tonnes over the next five years.
Kawerau a natural logistics hub
The Ministry of Business Innovation and Employment's Stuart Taylor says at least 13 companies from various sectors are supporting the Scion research project, with the understanding any investment to build a container terminal would come from the companies.
Mr Taylor, a principal advisor for the ministry's regions and cities team, said Kawerau was a natural logistics hub.
"Preliminary discussions with a wide range of Eastern Bay of Plenty industries have indicated that a Kawerau-based container terminal has the potential to be an asset for the entire subregion," he said.
The terminal has been included as part of the Toi Moana Bay of Plenty Regional Economic Action Plan, which is being implemented with government support.
Deputy chief executive Paul Stocks, the ministry's point man for engagement with the region, said the objective was to support industry to explore the terminal idea.
"If it stacks up in terms of the economic feasibility, we'd expect it to be a commercial venture. My understanding is that the economics of removing the road freightage from Kawerau to the port are very good, but the idea has to stack up in its totality."