Ground is finally being prepared for a new Onehunga railway station, for which KiwiRail has just received planning permission from Auckland City Council.

Contractors have started demolishing two former hardware business buildings at the southern end of Onehunga Mall on a 0.8ha site which the Auckland Regional Council bought for $8 million more than two years ago to house the new station.

ARC chairman Mike Lee and the Campaign for Better Transport, which raised an 8000-signature petition in 2006 to reopen the Onehunga branch railway line to passenger trains, were last week becoming increasingly nervous about a lack of progress on the site.

That led to pressure by Mr Lee on the Auckland Regional Transport Authority, which he criticised for waiting until February to lodge a resource consent application with the city council, while the authority was promising that the branch line would reopen by July 1.

But yesterday, after learning that the city had just granted a modification to KiwiRail's rail designation to allow the transport authority to build the station by early July, he was prepared to accept a small setback to the deadline.

"I think it's fantastic news because it's been such a long hard struggle, first of all to get the authorities to accept the wisdom of using the Onehunga line," he said.

Transport authority communications manager Sharon Hunter said the city council had required an application to be made by KiwiRail for a minor modification to its rail designation for the line, from which it needs to lay tracks along a small spur to the station site.

She said two other stations on the 4km line, at Penrose and between Mays Rd and Captain Springs Rd in Te Papapa, would be completed by early June.

But it would take until early July to complete the Onehunga station.

KiwiRail has spent about $10 million on laying new tracks for the Onehunga line, which was last used by passenger trains 37 years ago, and the transport authority has budgeted $4.1 million to build the three stations.

Ms Hunter said passenger services would begin sometime between July and the end of September.