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New bid to reopen Hawke's Bay rail line

NZ NewswireNZ Newswire 27/04/2016 Pattrick Smellie
Rail tracks: If reopened, the rail line will carry logs from Wairoa to Napier. © Getty Images If reopened, the rail line will carry logs from Wairoa to Napier.

The Hawke's Bay Regional Council has amended its bid to reopen the railway between Napier and Wairoa by proposing that KiwiRail run the service as well as maintain the tracks.

The proposal was signed off in a closed-doors council meeting late last week.

Its interim chief executive Liz Lambert confirmed to BusinessDesk that the proposal, for which commercial details are not being released, related only to establishing a log transport service from Wairoa to the Port of Napier.

A decision on the service has been much delayed and Ms Lambert said it had originally proposed having a third party operate the service.

"This is an alternative proposal we are putting to KiwiRail," she said.

KiwiRail chief executive Peter Reidy said this week the council and any commercial partners would need to bear the whole commercial risk of the line being restored to operability and maintained.

"We want a take or pay arrangement, we won't take the commercial risk," he said. "If HBRC is the only customer, then we would expect full cost allocation."

Ms Lambert declined to discuss the details of the proposal, which now requires both agreement with KiwiRail and the confirmation from forest owners in the Wairoa/Nuhaka region, where large-scale plantation forests are fast coming to maturity, that they will use the service.

"We need to sign sufficient customers to make it viable," she said. "We're starting on that track now."

Wairoa export log harvests are forecast to treble to a million tonnes by 2020 and increase after that time.

The council wants to prevent a massive surge in truck volumes on the main highway between Wairoa and Napier.

Forest managers estimate half of the coming volume of logs can move by rail from a log hub at Wairoa.

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