A $40 million project to reopen the mothballed Stratford to Okahukura rail line is a priority for new KiwiRail chief executive Greg Miller.
The line, shut since a derailment in 2009, is the only alternative north-south rail link should the main trunk line through National Park ever be shut by a natural disaster. It is also a commercial opportunity for Fonterra, forestry companies and other firms looking for a faster flow of Taranaki exports north to Auckland or Tauranga.
Miller says the freight volume relying on the main trunk line through National Park is worth about $130 million a year. A major slip, flood or earthquake in the central North Island would disrupt all the country’s inter-island rail services, and freight and tourist flows north to, and south from, Hamilton and Auckland – the country’s two largest markets.
Discussions on reopening the 144-kilometre rail line that emerges north of Taumarunui are already underway, he says. If approved, it is probably a year-long project.
“That line, to me, has to reopen,” Miller told BusinessDesk.
“It’s $40 million but you can’t run a railroad unless you’ve got an ability to get around the country.
“So my task is to convince my board and shareholders that it is worth doing. And I believe it is.”
Government-owned KiwiRail has just re-opened the Napier to Wairoa line, mothballed in 2012 due to serious storm damage. It is still working on repairs from the November 2016 Kaikoura earthquake that shut the main South Island rail link for 10 months. It took almost two years to fully restore rail services.
That’s why, Miller says, reopening Stratford to Okahukura is “up there” in terms of his priorities.
“If we had a washout of some Kaikoura magnitude we would be wondering why we hadn’t done it,” he said. “To me, it’s a big priority for national resilience.”
Miller was speaking after the company and Wellington’s CentrePort marked the first extended log train from the Waingawa log yard south of Masterton.
The new service will increase daily log loads from 30 to 45 wagons and will boost annual log tonnage by about 100,000 tonnes to 370,000 tonnes. By March, the firms and local foresters are hoping to lift that to 60 wagons a day, taking another 100,000 tonnes of logs off the Remutaka Hill Road into Wellington annually.
Miller told guests – including forestry and regional economic development minister Shane Jones – that KiwiRail is moving only about 5 million of the 35 million tonnes of logs being harvested annually.
That number has to increase, not just because of the shortage of truck drivers, but also to contain emissions, road congestion and the under-appreciated extent of road damage from 50 tonne-plus trucks.
A study KiwiRail is undertaking for the New Zealand Transport Agency suggested a dollar spent on rail would avoid about $3.50 on road maintenance, he said.
“It’s going to be a number something like that. So it’s a significant benefit to the country.”
KiwiRail is establishing a log yard at Wairoa and is planning a $4 million yard at Dannevirke to help speed forestry volumes through the North Island.
Miller said the company hopes to complete a study for a log service from Gisborne by the end of the year, and is also looking at options to rail more logs from Murupara and Kawerau.
A re-opened Stratford to Okahukura line could also deliver Taranaki logs to Tauranga, along with product Fonterra currently rails from its Whareroa plant south of Hawera to Palmerston North before railing it north again.
Miller said it’s hard to know how quickly some of the new regional facilities will come together and how soon that extra volume will appear on KiwiRail’s manifest. About $60 million of container wagons are being re-purposed to carry logs.
“These types of operations take a long time to pull together between a whole raft of industries,” he told BusinessDesk.
“The tonnages are job by job, province by province, but we are certainly going after several million tonnes more.”