KiwiRail will reopen part of its mothballed east coast railway between Napier and the logging hub of Wairoa.
It's part of a deal with Napier Port and will see log services reinstated, commencing twice every Saturday and Sunday at the end of next year.
Behind the move is a predicted jump in forestry exports in the wider Wairoa area, with 11,000 hectares of trees forecast to be processed through the port.
KiwiRail chief executive Peter Reidy says he's delighted the line will reopen after it was mothballed in 2012 following a number of significant washouts.
"We had always signalled that the line could reopen in the future, as long as there was sufficient freight volume available to support rail operations and the necessary investment in infrastructure was made," he says.
Without the reinstatement of rail, Napier Port boss Garth Cowie says the roads wouldn't cope with the number of logging trucks needed to meet demand.
"The increasing long term log volumes from Wairoa will stretch the capacity and infrastructure of both road and rail in the whole East Coast region," he says.
The cost of the deal and the re-opening of the line is commercially sensitive, but it cost KiwiRail $1 million to mothball the line to Gisborne.
The move has put a smile on the face of Transport Minister Simon Bridges, who feels vindicated.
"This shows what we've always said: where there is commercial demand on a track, it will stay open, whereas lines that don't have that demand temporarily, can re-open when demand re-establishes itself," he says.
Local MP Stuart Nash is also chuffed, and is congratulating KiwiRail on "taking a punt" on the line.
"Anything that gets trucks off the road will make a huge difference. I'm very grateful that KiwiRail and the Napier Port have finally come to the party with a deal that works for both of them," he says.
Mr Nash says the next part of the puzzle is to open the line all the way to Gisborne.