Regional study ‘must not be a white-wash’

East Coast rail supporters say a regional economic study with a focus on transport infrastructure will need to have its scope set by the communities affected to avoid being a contrived tool for Government to justify closure of the line.

District Councillor Manu Caddie said he will table a paper at the Gisborne Regional Transport Committee next week recommending a Terms of Reference be drafted by the local authorities, have proper opportunity for public feedback and be signed off only with the support all the councils affected.

“The announcement yesterday was intended to deflect criticism from the sorry situation the Government have found themselves in” said Mr Caddie.

In a Select Committee meeting yesterday KiwiRail admitted a lack of maintenance led to the washout that closed the Gisborne line and blamed the lack of funding for basic maintenance on government policy under the ‘Turn Around Plan’.

Minister for Economic Development Steven Joyce and Transport Minister Gerry Brownlee announced the joint local and central investigation to be funded by the Ministry of Business Innovation and Employment after a meeting with regional mayors in Wellington.

Dr Ganesh Nana, the senior economist for BERL who provided a review of KiwiRail estimates for the line has offered to assist with setting the Terms of Reference for the much deeper study the BERL report recommended and opposition parties have called for.

“BERL’s expertise will be invaluable to ensure the whole story is told so we don’t arrive at a predetermined outcome or ignore essential considerations” said Mr Caddie.

Mr Caddie said it was vital that the regions involved had control of the process to avoid a central government whitewash of the investigation.

“Basing their decision on the KiwiRail business case – which BERL has shown is a lot better than KiwiRail or the Government claimed – is a bit like asking a local freight company if they want some remote roads in the district to remain open.” said Richard Burke, General Manager at Leaderbrand.

“Local business owners have shown there has been a negative impact on business and local jobs as a result of this decision that the Government is responsible for” said Mr Burke. Leaderbrand is a major horticultural exporter from the region. Clyde Lumber in Wairoa has stopped processing timber since the line was mothballed in December with 15 to 20 staff now out of work. “Products from this region will be less competitive without the rail and that will mean more job losses that our communities cannot afford” said Mr Burke.

“The evidence is clear, from the Government’s own projections we are going to see another 80-90 logging trucks every day on the highway.”

Maintenance costs on State Highway 2 between Gisborne and Napier have increased significantly in the last 10 years – from an average of $7.6 million per year between 2002 and 2005, to nearly $15 million per year between 2008 and 2012. Based on MAF forestry data, BERL conservatively expects over 80 more trucks each day on the highway if rail is unavailable.

“We currently have rail freight income for 75% of the break-even cost of the line, and that doesn’t include any of these externalities like improved road safety, significantly reduced road maintenance costs and a number of important environmental benefits. With some small investment, it won’t take much to get to 100% in a few years and within ten years the line will be quite profitable. But that is still a false economy, we need to include the other benefits and this study has the opportunity to show the real costs and benefits of a secure rail link complimenting other transport infrastructure” said Mr Caddie.

Labour announces rail retention policy at public meeting

A Gisborne public meeting hosted by Mayor Meng Foon was the platform for Labour Party MP Moana Mackey to announce her party’s intention to reopen the Gisborne to Napier railway line if they are in power after next year’s election and the current Government abandons it.
“Having read the BERL report the Labour Party can now see the economic opportunity the rail provides and we are convinced it makes sense to retain the line, keep the extra trucks off the road and keep East Coast products competitive” said Ms Mackey.
“The National Party received a real bollocking at the meeting” said organiser and District Councillor Manu Caddie.
A member of the public moved a vote of no confidence in Anne Tolley and Chris Tremain that was almost unanimously supported by the more than 100 residents present and speakers suggested while the provinces have been loyal to National, the party leadership seem to have forgotten about rural New Zealanders.
Forest owner Roger Dickie said he had 18 million tonnes of trees to be harvested in the region and he wants to send at least 7.5 million tonnes south by rail. Mr Dickie also criticised Juken Nisho who own a mill in Gisborne and Eastland Port for lobbying the Government against retention of the line in an effort to bolster their own businesses at the expense of others in the region.
Mr Dickie responded to KiwiRail Chief Executive Jim Quinn’s claims that short haul railways are uneconomic by pointing out a number of similar and shorter lines carting logs profitably for KiwiRail.
Green MP Julie Genter said the $500,000 for a comprehensive cost-benefit analysis was small change compared to the $100 million of taxpayers funds the Government has spent on consultants for a $3-5 billion motorway in Wellington.
“If the Government wants to take this public asset away from the region then they need to be able to justify the decision with accurate figures” said Mr Caddie. “BERL have shown the numbers are much closer than KiwiRail suggested and that doesn’t even take into account the massive extra cost to road maintenance, road safety issues, environmental benefits and the cost to regional jobs if Gisborne products are less competitive.”
“$4 million is the cheapest the repair is ever going to be, so fix it now” said Ms Mackey.
“Many of the regional roads in our district would not exist if Council applied the same economic rationale to them as KiwiRail has to” said Mayor Foon. Gisborne deserves to have services and infrastructure similar to every other part of the country. We deserve good schools, good hospitals, good roads and a good railway line.”

Initial Analysis on KiwiRail Report


Plans by a Gisborne lobby group to seek an expert independent economic analysis of the KiwiRail report used to justify the Gisborne-Napier railway line have had a boost with nearly $8,000 being raised over the weekend.

Gisborne Rail Action Group member and District Councillor Manu Caddie said the response has been overwhelming. The group hopes to raise at least $10,000 to pay for independent economic analysis of the business case for the line.

“This is not just a Gisborne issue, we have had some huge donations from all over the country, many New Zealanders are as angry about this decision as us locals.”

The group has released its initial assessment of the KiwiRail report and says that even if conservative freight figures are used the future for the line looks secure.

“Based on this initial analysis we are keen to get independent experts to have a close look at the KiwiRail figures and also an engineering second opinion on some of the claims made in the KiwiRail report.”

“Of course there are also wider economic impacts that KiwiRail should consider as a State Owned Enterprise such as the loss of tourism and the potentially much higher costs of freight should the rail not be available and it would have been good to see some of those included as well” said Mr Caddie.

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DOWNLOADS: Initial Comments on KiwiRail Report (PDF) + Appendix (PDF)

Business case to close Gisborne rail link needs independent review


Photo: KIERAN CHISNALL : “This is train 687. One of the weekend fert trains that were running before the squash trains started. This was taken just south of Black’s Beach winding back down to Nuhaka.”

Gisborne District Councillor and Regional Transport Committee member Manu Caddie says KiwiRail needs to provide the Council with a copy of the full business case that has led to the decision to close the Napier to Gisborne railway line.

“KiwiRail may have skewed the figures to justify closure rather than invest in what is at present a marginal business proposition for them but a lifeline for us. The communities of the East Coast need an independent review by reputable economists of how KiwiRail arrived at its claim that there is no alternative. I think that is the least the Government and KiwiRail owe our region if they are going to strip us of this billion dollar investment.”

“Make no mistake, mothballing is not a temporary arrangement – look what happened in the Bay of Plenty when the line was mothballed, it doesn’t take long to deteriorate to a point where its unsalvageable.”

“Hard on the heels of provincial roading cuts, this Government is clearly abandoning the regions.”

Mr Caddie said his grandfather worked on the railway line in the 1940s and 22 men died while building the section between Wairoa and Gisborne.

“The Government this week passed legislation that will cost $85m to underground a short piece of Wellington motorway so the national war memorial can have more space – our railway line is the memorial for the 22 men who gave their lives for it and we may be the generation that abandons their work.”

Federated Farmers, Gisborne Chamber of Commerce, Hawkes Bay Chamber of Commerce, forest owners and transport operators have all said it is essential to keep the line open. And before the washouts in March, business on the line was booming.

“Fuel prices are only going to increase and rail will become more and more the mode of choice for exports and imports to the region.”