‘Bureaucratic inertia’ holding up rail plans
KiwiRail is not yet working on a business case for the restoration of the Gisborne-Wairoa rail line.
The business case is the vital next step required before the Government can formally make a decision on whether to re-open the line.
Frustration is growing among interested parties about the apparent lack of progress since the BERL feasibility study last year recommended that the line be re-opened for freight.
Kiwi Group chief executive Greg Miller said KiwiRail had many priorities across the network, “with our primary focus currently on resilience through the central North Island, along with mitigating the impacts from weather events on parts of our South Island network.
“We are, however, committed to assessing the BERL report to confirm the validity or otherwise of figures.”
Rick Thorpe, a director of Tairawhiti Rail Ltd (TRL), one of the parties represented on the BERL feasibility study steering group, said there were no funds left from the $600,000 feasibility study, but a business case had never been part of its terms of reference anyway.
“There has been discussion that once the politicians agree the restoration should proceed, then KiwiRail will be directed to do a business plan, utilising the significant work already completed by BERL,” said Mr Thorpe.
“The report has now been with the various government agencies long enough for them to provide advice to cabinet ministers, especially given many of them attended the steering group meetings.
“The KiwiRail representative at the last steering group meeting confirmed that based on BERL's numbers, the container freight service would be viable.”
Herald reader Wynne Brown has asked if the feasibility study had been a waste of time.
Mr Thorpe said it was too early to answer this question.
“The charges discussed suggested rail would compete well with the only current road option and provide significant savings for local exporters.
“Bureaucratic inertia, other political priorities and a lack of available KiwiRail resources are also concerns for why our project is not yet included in the New Zealand Rail Plan — the Government's long-term vision and priorities for New Zealand's national rail network.”
Mr Thorpe said the feasibility study, by Wellington-based economic research and consultancy business BERL, confirmed work previously done by KiwiRail and the Ministry of Transport (MOT) “that moving freight off the roads and on to rail makes economic, environmental and social sense”.
“The savings for our local exporters, based on the 2025 projection of 6000 containers, would be in the range of $1.8 million to $2.4m each year.
“The 2025 reduced road maintenance cost for New Zealand Transport Agency (NZTA) is estimated at $1.2m to $1.7M per year.
“The annual CO2 emission savings of 70 percent have been valued at $345,000, based on $25 a ton.
“Placing a value on the reduced cost of road accidents was avoided in the report and only the accidents from Gisborne to Wairoa were considered, instead of from Gisborne to Napier.
“Based on the latest Ministry of Transport numbers a fatal crash has a social cost of $5m, a serious crash $1m.
“Although the report did not include a government Return on Investment (ROI), it is clear from these numbers that the savings from moving 12,000 heavy truck movements off the Gisborne to Napier road will see the $30m investment repaid within six to seven years.”
Mr Thorpe said the Provincial Development Unit (which reports quarterly to Cabinet on the Provincial Growth Fund) decided on a feasibility study, determined the terms of reference and confirmed a budget of $600,000.
The steering committee, which also included representatives from the Gisborne District Council, Hawke's Bay Regional Council, Wairoa District Council, KiwiRail, MoT, New Zealand Transport Agency, Activate Tairawhiti, and the Ministry of Business, Innovation and Employment, met four times over the six months it took to complete the report.
“The project came in on budget but took longer than expected due to delays in getting engineering information from KiwiRail,” Mr Thorpe said.
The major cost ($310,000) was for the detailed survey of the line by the various engineers employed to determine the cost of reinstating the rail link to Wairoa.
The freight survey work cost $74,000, the tourism report cost $30,000 and the balance was charged by BERL to cover the social, environmental and well-being aspects, and to compile the report.
Mr Thorpe said Tairawhiti Rail had applied to the PGF to fund the freight option and Trust Tairawhiti applied separately to consider the tourism options.
The PDU determined that there should be a joint study to determine the future use of the Wairoa-Gisborne rail line, but neither applicant received any funding for their contribution
Mr Thorpe remains an enthusiastic supporter of the rail line.
“The volume of container freight will increase significantly by 2025, apples will go from 300 to 1200 containers and processed timber volumes are expected to more than double.
“There will be real pressure on providing enough trucks and drivers.
“The increased congestion and wear and tear on State Highway 2 can be avoided.
“Local and central government have a responsibility to provide the transport infrastructure to ensure our exporters can get their products to market.
“Rail provides the most cost effective, social and environmentally responsible option. Let's do this,” Mr Thorpe said.