Time requested to seal rail-line lease

The Hawke's Bay Regional Council intends asking KiwiRail for more time to finalise a deal to lease the Napier-Gisborne rail line.

At a meeting of the council's corporate and strategic committee yesterday, councillors agreed to support an "in principle" proposal to continue working on plans to reopen the Napier-Wairoa section of the mothballed line.

The council believes it could be economically viable to use the line to ship logs from Northern Hawke's Bay forests to Napier Port.

Last year KiwiRail gave the council until March 1 to decide whether to take up the lease after the council set aside $5.46 million to potentially part-fund the resurrection of a freight service on the line.

A business proposal from the Napier-Gisborne Shortline Rail Group (NGR), discussed by the council yesterday, concludes that the Napier-Wairoa section is in a reasonable to good condition and there is a sufficient resource of logs to be harvested in the area to sustain a rail service to Napier Port for at least 30 years.

The committee yesterday voted to tell KiwiRail "that in principle it agrees to a lease of the line, subject to the terms of the lease and a number of operational matters involving KiwiRail and a rail operator being resolved to the satisfaction of both KiwiRail and HBRC".

It also resolved to ask KiwiRail for a "reasonable extension" of time to resolve "the few remaining issues" involved in getting the line operational.

The committee set the council a deadline of June 30 to resolve those issues and have a potential rail operator finalise the additional private-sector funding the business would require.

Nick Cornwall, a consultant hired by the council to help assess the rail proposal, told yesterday's meeting he agreed with NGR's assessment that there was sufficient volume of wood coming onstream in the Wairoa area to make the proposal feasible. Harvesters were more likely to use rail over road to transport logs if they were destined for export.

"Forest managers have said, as they were expected to do, that they will support the train if it offers a benefit over trucks," Mr Cornwall said.

"The viability of the train service will be 100 per cent price-dependent. It has to be as good as, or better than, a truck option."

A spokeswoman for KiwiRail said yesterday the company was aware the committee was meeting to discuss the matter. It had yet to hear officially from the council and was unable to comment on the timing extension request or other issues that the council may raise with it.