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Dunedin city councillors have decided to keep faith with retaining city ownership of the company, but they want more input from the community and information before deciding on its future.
Councillors voted 14-1 essentially to defer a decision, ahead of a council paper to be considered before 10-year-plan deliberations in May.
Cr Lee Vandervis, who voted against the deferral, said he believed the decision would close the door on one of the options that had been short-listed - negotiating a sale or lease with a commercial partner.
Dunedin Mayor Aaron Hawkins said he did not sense public support for closing the business and selling its assets for scrap.
The decision would allow Dunedin Railways to have another season of testing the local market's enthusiasm for a train service, after a summer trial was run this year.
The public were excluded for a time late this morning as Dunedin city councillors debated the future of Dunedin Railways Ltd.
The discussion was about commercial negotiations between the Dunedin City Council regarding a possible sale or lease of assets to an unnamed party.
The council has received a proposal from the entity.
In the public part of the council meeting earlier this morning, discussions ran for 50 minutes involving councillors and people who expressed views in the public forum.
Councillors have been presented with four short-listed options. One is the sale or lease of Dunedin Railways assets. Another is to wind up the company.
The others are to run a train operation on both the national KiwiRail network and the Taieri Gorge line or a more restricted service, using the the national network only.
The company, which was facing a sharp downturn in custom due to a lack of international tourists since the Covid-19 pandemic, has been in hibernation since July last year.
Maintenance and catching up on upkeep for the Taieri Gorge line could cost between $6.5 million and $14.8 million over the next 10 years, depending on whether the line from Wingatui is maintained as far as Middlemarch, or for a shorter stretch.
Dunedin City Holdings Ltd chairman Keith Cooper said KiwiRail was not interested in taking over the line, which is owned by Dunedin Railways.
The business model for the service that had been run before the pandemic was not sustainable, Mr Cooper said.
It had attracted 80,000 passengers a year, but the operation had not been on top of deferred maintenance, he said.
First Union organiser Sonja Mitchell said today it was not the right time for major changes.
It was not the right time to sell off assets or get rid of a low-carbon form of transport, she said.
The opportunity cost that would come with not having a railway should also be considered, she said.
Rail and Maritime Transport Union representative Dave Kearns said rail was only going to grow in the future.
He asked councillors to consider ratepayer support as an investment, rather than a subsidy.
Dunedin without the railways would be like Rome without the Colosseum, he said.
Dunedin Mayor Aaron Hawkins said more time was needed before deciding on the future of Dunedin Railways Ltd.
He did not support closing or selling the Dunedin City Council-owned company and said a strategic conversation was needed about its future.
A paper could come back before the council in May, ahead of deliberations on the council's 10-year plan.
Several councillors have spoken in support of deferring a decision on the company's future..
Cr Sophie Barker said keeping the train operation in city ownership was a no-brainer.
Waitati businesswoman Sally Brown said a summer trial of train services had a positive effect on businesses.
Raewynne Pedofski helped organise Port Chalmers Day on March 20, for which a train service was provided from Dunedin
There were 274 passengers and one retailer noted the shoppers were less likely to haggle over prices.
"Retailers were saying it was far better than a cruise-ship day."
Discussions in the council meeting continue.