Wagons used to cart logs on the now unused rail link north of Kauri are going to the scrapheap as repair costs outweigh returns, say KiwiRail.

KiwiRail confirmed all 120 four-wheel wagons on the service will be scrapped as they have reached their economic life. However, the company said details of their disposal were expected to be worked out next month.

The wagons began service in 1972 and are more than 40 years old. Northland is the only area KiwiRail has operated four-wheel wagons since 2000.

The last log train between Kauri and Otiria had its final run on August 31 because of poor commercial returns and "life-expired wagons".


However, the company said trains have not stopped operating in Northland as a service continued to run between Whangarei and Auckland, and the line north of Whangarei remained open.

"As repair costs have outweighed the returns being achieved on the wagons we have had to progressively retire some of the wagons in the last few years. With the downturn in steel prices, scrap values are low so the 'financial gain' from scrapping the wagons is not great," a KiwiRail spokesman said.

Kiwirail has other log wagons suitable for transporting logs but they are deployed in other areas in the North Island.

The company said it was able to move logs and other containers from Otiria, 3km south west of Moerewa, subject to cargo owners being prepared to pay a commercial return for the freight being moved on rail.

Ruakaka-based Woodchip company Marusumi, the only customer using the line north of Kauri to move logs from Otiria to Portland, was informed its contract would not be renewed after August because of poor commercial returns and "life-expired wagons".

From this month, Marusumi's logs will be hauled to its Portland mill by road.

Mothballing of the northern section of the line, with access to large areas of pine forest, is another blow to plans to build a rail link between the Northland line and Northport.

This follows the closure of the Dargaville branch line in October last year.

The Government said earlier this year road rather than rail would continue to receive the lion's share of taxpayer infrastructure funding in Northland because it is the preferred mode of transport for the freight, tourism and passenger industries.