For the first time in six years trains will start transporting logs from Wairoa to Napier, after the Government splashed out $5 million to make it happen.
After revealing details of the Government's new Provincial Growth Fund (PGF), Regional Economic Development Minister and Associate Transport Minister Shane Jones said the Government would provide $5 million to reopen the Wairoa-Napier line for logging trains, as part of a total nationwide rail-based investment of $8.7m.
Mr Jones said the Wairoa-Napier project was a "shovel-ready" project that was ready to go, and trains were expected to be transporting logs to Napier Port by the end of the year.
"The Government has signalled its strong commitment to using rail to drive regional growth and I expect more projects will be funded over time from the PGF.
"These are relatively modest investments in dollar terms, but we expect them to deliver good value and to support regional businesses.
"The Government is making safety a higher priority when it invests in transport and taking logging trucks off challenging roads contributes to that."
The Government, KiwiRail and the Hawke's Bay Regional Council were working together to reopen the line as the amount of timber coming out of the region continues to grow.
"The wall of wood is expected to reach peak harvest by 2032 so reopening this line will get logging trucks off the road and give those exporting timber options that they currently do not have."
It made sense to consolidate that timber in Wairoa and use rail to take it to the Port of Napier.
"The State Highway from Wairoa to Napier is a challenging road that is not well equipped to handle significant growth in logging trucks without major investment.
"Taking trucks off the road is a better solution – it delivers environmental benefits in the form of lower greenhouse gas emission, and safer roads.
"KiwiRail estimates that shipping logs from Wairoa to Napier by train will take 5714 trucks a year off the road. It will also mean 1292 fewer tonnes of carbon dioxide released into the atmosphere each year.
"Plans to refurbish the line and bring it up to a level where a low-speed forestry service can run have been in the pipeline for some time. I'm pleased the fund is able to make this project happen by injecting the capital needed."
Hawke's Bay Regional Council, Napier Port and KiwiRail entered into a commercial agreement in 2016 to reopen the mothballed section of line between Napier and Wairoa for the first time since it closed in 2012. The line was mothballed after a section of track at the Beach Loop area was badly damaged in a storm earlier that year.
As part of the agreement, Napier Port was intending to run a dedicated log service from Wairoa to Napier Port.
That was expected to start in the last quarter of last year but the regional council, which previously set aside $5.4 million to reopen the line, last year said it had not been possible to source enough logs make the line economically viable.
However, the new release of KiwiRail latest financial result shows an 8 per cent revenue increase in its overall forestry business in just the six months to December.
KiwiRail chief executive Peter Reidy said that was being driven by strong growth in the volume of logs.
The Napier-Wairoa announcement was good news for the region and good news for New Zealand, he said.
"It's a vote of confidence in our customers and our staff.
"Moving logs by rail takes pressure off the roads, and reduces greenhouse gases. The Wairoa-Napier road is not designed to cope with the growing volumes of logs now that the 'wall of wood" is coming on stream and rail is the ideal way of getting that timber to overseas customers."
Hawke's Bay Regional Council Regional Transport Committee chairman Alan Dick said he was extremely pleased to see the line reopen.
"An effective partnership between the council, Napier Port, and KiwiRail, which has involved a lot of discussions, has led to this fantastic outcome.
"The re-opening of the line will provide road safety benefits by minimising the number of logging trucks on this difficult and fragile highway, environmental benefits with rail a smaller generator of carbon and finally it will provide opportunity for significant economic and social benefits for northern Hawke's Bay."
Napier Port chief executive Todd Dawson was also pleased.
"We're supportive of efficient and sustainable transport links across the region, and it's great to see this level of investment in Hawke's Bay.
"We're very pleased that KiwiRail and Hawke's Bay Regional Council have been able to secure government funding for the reinstatement of the line, and that exporters will soon have an alternative means of getting their logs to port."
The three parties are working together to ensure the introduction of additional funding achieves the Government's regional growth and network resilience aspirations.
Napier MP Stuart Nash said he had campaigned for the line to be reopened since it was first closed.
"It's fantastic to see that the Labour NZ First government understands the importance of regional infrastructure in economic development.
"We win on three counts: the forestry sector has the infrastructure to get the logs directly to the Port of Napier; the local community benefits from the reduction in logging trucks using that road; and it's a vote of confidence in the entire region.
"It sends a signal that people and the economy are worth investing in, and that our communities have a positive future.
"There will be many more worthy projects that qualify for this $1billion a year Provincial Growth Fund, and I am already working with local businesses to encourage them to apply."
Wairoa Mayor Craig Little said it would be up to Wairoa to ensure it benefited from the move.
"I hope it will benefit Wairoa, as long as it's not just a Sunday trip and all the operators are based in Wairoa the I think it will.
"Of course if it's only used once a week, then we need to think about how we use it for the rest of the week, so there may be tourism opportunities.
"We were pleased to host Minister Jones late last year and discuss with him some of the projects we have that need urgent attention. We will continue to work with Minister Jones and central government to advance projects of district and regional benefit."