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Report reveals Napier-Gisborne rail line 'sustainable'

Published: 8:35AM Tuesday January 15, 2013 Source: ONE News

An independent report has revealed flaws in KiwiRail's arguments for closing the Napier-Gisborne rail line, and is calling for the corporation to reconsider their decision.

KiwiRail confirmed in October that the service would close, saying the $4 million cost to repair the track after a storm in May was too expensive, as well as the $8 million a year to keep the line open.

But a new report, by Business and Economic Research Limited (BERL), has analysed the decision and questions the figures on which it is based.

KiwiRail said the estimated annual costs of operating the line in the future were calculated by taking the existing costs and adding 30%.

The extra was added to pay for a backlog of maintenance work.

But BERL's engineer said if a large sum was paid upfront there would be no need to add as much as 30% a year.

"If the capital expenditure is well-directed, and preferably front-loaded, our engineering advice is that the annual maintenance costs could be reduced," the report says.

It goes on to question KiwiRail's assessment of the viability of the line, claiming its financial analysis is "very conservative showing a significant reduction in revenue earnings per tonne compared with the 2012 actual achieved".

However, KiwiRail Chief Executive Jim Quinn has hit back at the claims, saying that the line has been running unprofitably "for some time".

"We spent quite a lot of time looking at it...looking at the cost to bring it up to the standard it needs to be, looking at the cost to maintain it at that standard.

"It's bizarre that people think we're trying to be conservative and stage this. We're the railway people, we actually want to run the railway. If there was an opportunity there that we could see, we'd be in boots and all," said Quinn.

Public support

The report adds that the community and businesses on the East Coast have voiced support for the rail link and have suggested they would be able to increase the amount of freight carried on the line in the future.

"Rail is a lifeline south, and for both tourism and freight, it's part of the infrastructure that should be retained in New Zealand," said Gisborne City Vintage Rail's David Hall.

While Gisborne Councillor Manu Caddie said that a 30% margin of error "was too sloppy".

"If they're gonna justify closing the line, then the numbers have to be a lot more accurate than what they've provided to date," said Caddie.

Accordingly, Gisborne Mayor Meng Foon has also shown his support.

"They say that the rail is sustainable, and we believe it's sustainable as well. And we want the crown to fix the rail," he said.

'Dubious assumptions'

Labour and the Greens are both using the report to call on the Government to reconsider the closing of the Napier-Gisborne line.

Green Party transport spokesperson Julie Anne Genter said the decision rests on "highly dubious assumptions", and was the result of the Government's "anti-rail agenda".

"The Napier-Gisborne rail line is a vital piece of infrastructure for the region's exporters; this report shows it can be run economically," she said.

"Unfortunately, the current Government is likely to ignore this new evidence because it is ideologically set against rail.

"At the same time as it's shelling out billions of dollars for uneconomic motorways, National is fudging the figures to justify closing rail lines in the name of saving a few million dollars."

Gisborne based Labour MP Moana Mackey said the Government had to step in and act on the report's findings.

"Taxpayers own KiwiRail, and they expect Ministers to get the most out of their asset. If the mothballing goes ahead, more pressure and more logging trucks will go onto the region's roads. It is just crazy to give up on rail.

"This is what our Mayor, council, business community and locals have been saying for a long time and now we have more evidence to back it up. This is an economic lifeline we cannot afford to lose and the Government should intervene."

Mackey said if the Government fails to act it would be a major blow for the region.