Spending government money to restore the Napier-Gisborne rail line would be "a tragedy for the New Zealand taxpayer", Transport Minister Gerry Brownlee said this week while inviting supporters of the idea to fund the repair work themselves.

The regional council has earmarked just under $5.5 million in its draft annual plan to re-establishing the Napier-Gisborne line, which was mothballed in December 2012.

But the council's investment would be dependent on KiwiRail and the Government reopening the line and fully funding its return and that of associated infrastructure in a good "fit for purpose" condition.

If that were to happen, the Napier Gisborne Rail Establishment Group (NGR) has proposed leasing the line from KiwiRail and buying rolling stock to run a freight service. The council would take a 51 per cent stake in the business.


But the Government last month rejected the idea of paying to repair the track, a job NGR estimates would cost between $3 million and $5 million.

During question time in Parliament on Thursday, Mr Brownlee responded to a question from NZ First MP Denis O'Rourke by saying the Government would not pay to repair the line because there was not enough freight demand to make it viable.

"We have looked at that proposal. It comes from a group of people who are keen on the idea, but it simply does not stack up.

"If we supported it, it would be a tragedy for the New Zealand taxpayer, and it would be a bigger tragedy for the ratepayers of the Hawke's Bay."

He said the Government had considered the proposal "in a very comprehensive way".

"What I would say to the member is that if the Hawke's Bay people are so keen on funding that rail line, why do they need the relatively modest part from the government, as he suggests?

"If it is so good and it is going to work so well, why do they not just come along and say: 'Let us have the track, so that we can make it all work.'?"

Alan Dick, chairman of the regional council's transport committee and chairman of NGR, said he was encouraged by Mr Brownlee's comments because they opened the door to the line being reopened if funding could be found.

"To date, the messages have been pretty much categorically 'no' so I see this as an interesting signal," he said.

NGR, whose members include business people, some with experience in the rail sector, would be meeting in Napier to talk to potential investors on Tuesday.

Mr Dick said finding additional investment for the track repair work was "not impossible but it wouldn't be easy".

The group was committed to finding a way to open the line and was taking a long-term view, whereas politicians tended to be more focused on the three-year election cycle, he said.

He rejected Mr Brownlee's suggestion there wasn't viable business case for the line, saying a substantial amount of wood would becoming out of Gisborne forests over coming years.

Mr O'Rourke told parliament the Government had spent $4 million building nine new passing lanes on SH2 between Napier and Gisborne and he asked Mr Brownlee if this meant "the Government will continue to favour expensive but relatively minor road improvements over a rail restoration proposal with a much better cost-benefit ratio in the short and long terms?"

Mr Brownlee replied: "Yes, we put more money into making that road safer because 97 per cent of all the freight coming out of that area has always gone on the road."

National's Napier candidate Wayne Walford floated the idea of turning the line into a cycle track.