The future of Dunedin Railways Ltd (DRL) came up during discussions about the latest financial results of Dunedin City Holdings Ltd (DCHL) at a city council meeting last week.
The council previously voted to defer decisions about retaining train services through the Taieri Gorge, which would include developing railway lines between Dunedin and Middlemarch, until its 2025-34 nine-year long-term plan.
The train has been in "hibernation" since the Covid-19 pandemic began and only travelled in a limited capacity to Hindon, as part of a chartered service agreement between DRL and Pounamu Tourism Group.
According to DCHL’s latest interim report, DRL recorded a loss of $780,000, a "larger loss than expected".
This is despite all of DCHL’s other entities tracking to plan, contributing to a 30% rise in profits during the past six months.
Responding to questions from councillors, DCHL chairman Tim Loan said DRL had been "overly optimistic" about its revenue budget, having anticipated 89 cruise ships over the season. Only about 55 had arrived.
Deputy Mayor Cherry Lucas said she was surprised by how few passengers, about 170 per trip, had used the rail services, despite significant demand in the past.
She was also surprised how few performance measures DRL had in place.
Cr Sophie Barker said council needed to have a "good examine of the train" to determine how it would be run for the next year.
Mr Loan said rail services were still partially hibernated.
However, DCHL was encouraging the company to think more strategically about its business and about the future..
Cr Jim O’Malley recounted the idea of selling the rail company was floated back in 2019, but council instead chose to shelve that when the borders closed during the pandemic.
Now they had reopened, he questioned at what point the train would be lifted out of hibernation.
Mr Loan said the organisation was looking for "a steer" around the future ownership of DRL, which it was his understanding would become clearer in the long-term plan.
They were looking to do their best with the company as now structured, with a view to extend services where it could, he said.
Cr Barker said further consultation was needed as well as a renewed effort focusing on how the train could make more money.
"We need to make it work for us."
