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Review contradicts decision on Napier-Gisborne line

Tuesday 15 Jan 2013 5:58 p.m.

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An independent review released today has raised doubts over KiwiRail's decision to abandon the Napier-Gisborne rail link.

The report was written by economists and funded through public donations, and found the rail line could become profitable within a few years.

Before the rain brought it down and KiwiRail refused to put it back up, the Gisborne-Napier rail line was a lifeline for many businesses, so news that an independent review has found it commercially viable is welcome.

Local business owner Murray McPhail is one of those hoping it means KiwiRail’s decision will be reconsidered.

“Assumptions were made about the amount of freight, and this vindicates that and says, ‘Hey, the Government really needs to have another look at it,'” he says.

Gisborne mayor Meng Foon agrees.

“You've got billions going into Christchurch, you've got millions going into the fixing up of the rail, the floods, the fire in the South Island and here we're stuck on the Tairawhiti, the East Coast here, and all we want is an opportunity to use rail as a viable option,” he says.

The report, written by economists BERL and reviewed by international rail specialists, found fault in KiwiRail's decision to mothball the line.

The report says that to make the line break even, about 200,000 tonnes a year would be needed, in contrast to the 400,000 to 800,000 suggested by KiwiRail.

The new report also says that with better engineering maintenance costs would drop, and that once upgrades are made to put rail on par with road for hauling wood, the Mohaka-Napier route could attract 750,000 tonnes a year and be profitable within several years.

Despite those claims, KiwiRail chief executive Jim Quinn says he hasn’t changed his mind.

“There's nothing in the report that gives me a clear view that there's a commercial opportunity here,” he says.

“The facts are clear. Revenue only just covered the running costs of trains before any maintenance or capital is required, that hasn't changed. Nothing in the report changes the raw facts.”

KiwiRail says while there's nothing to stop private parties or the Government putting up cash to resurrect the line, it won't.

The Government says it's a commercial decision for KiwiRail, and not their call. But Transport Minister Gerry Brownlee is due to meet with KiwiRail, community and business leaders to discuss the report.

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