Dunedin Railways seeking to offload assets

Looking for a life-sized railway set?

Dunedin Railways has what you are looking for.

The Dunedin City Council-owned tourist and charter train company closed its doors on March 23 and was put into hibernation on July 1 after its main source of revenue, overseas visitors, stopped when New Zealand’s borders were closed due to the Covid-19 pandemic.

About 50 people lost their jobs. Only six people remain employed to maintain the company’s assets.

Now it is looking for submissions from individuals or groups who have viable business propositions for the use of its assets or proposals to buy some or all of them.

Among the company’s assets are six locomotives, 23 carriages, including six wooden heritage carriages, 64km of track and the associated thousands of sleepers, a house at the Middlemarch Station and the Pukerangi toilets.

A Dunedin Railways train makes what could be one if its last journeys back to Dunedin from...
A Dunedin Railways train makes what could be one if its last journeys back to Dunedin from Middlemarch yesterday. PHOTO: GERARD O’BRIEN
The Crown owns the rail corridor (the land), 39 bridges and 10 tunnels, which are leased to Dunedin Railways.

Maintenance of the corridor, bridges and tunnels is Dunedin Railways’ responsibility.

A submission requires a detailed description of a business proposal, including what equipment would be used and the short- to long-term viability of the model, while considering the uncertainty surrounding international tourism, the call for expressions of interest says.

The document says before Covid-19, the company was forecasting ongoing losses of about $500,000 per annum, and impending expenses of $10million over the next 10 years on the Taieri Gorge line infrastructure.

It was considered unlikely Dunedin Railways would have sufficient tourist activity to operate for at least the next 18 to 24 months, it said.

Expressions of interest close on August 13.

Rail and Maritime Transport Union Otago branch secretary Dave Kearns said a longer submission timeframe would allow people to plan and put a better submission forward.

The union planned to make a submission and would challenge Dunedin Railways on its reported financial position, he said.

The union believed Dunedin Railways could run a "substantial" number of trains with domestic tourists only.

"Hopefully, this time they listen to what they receive," Mr Kearns said.

The call for expressions of interests opened as a Dunedin Railways train chugged its way from Dunedin to Middlemarch and back yesterday.

Mr Kearns said he was not sure of the purpose of the trip, but believed carriages were taken to allow the air-conditioning units to be run and keep the infrastructure in a usable condition.

"While they were doing that, we are pretty sure that they could have sold tickets and run a train."

Dunedin City Holdings chairman Keith Cooper said an engine travelled to Middlemarch "for maintenance of the carriages currently stored in that location".

Comments

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Perhaps my understanding of the term "mothball" is incorrect but offering your assets for sale does not seem to fit my definition of "mothballing". Lease or rent to another party for a period of time while you are not using the assets yourself - yes, that fits. But offer the assets for sale? That's not "mothballing". That is liquidating. The union representing the workers has always maintained that the Dunedin Railways operation would never resume after "mothballing" and the company's offering of these assets for sale would seem to support that. Perhaps the best outcome for all of this would be for the entire operation to pass into private ownership and get it away from the mismanagement that always seems to afflict DCC-owned companies.

And now would be the time to do a months trial of passenger services from Dunedin to Mosgiel & return ... forget about all the $$$ it would cost to do the consultancy work, that's just a waste of time & money.

Advertise the trial, hook on a couple of carriages and see what response you get ... it won't be hard to judge whether it would be viable to continue the service.

With respect I disagree, I think Robbie on the Watch has the right idea. Running a passenger train service is not simple and the DCC being involved only makes it more likely to fail.
Is a billion dollars of debt not enough? The council is used as a bank and it's ratepayers as an insurance policy for the corporate fat cats, they have ditched the trains because they are a failure. It would be a mistake to compound that failure further, this would only results in an even higher cost for the ratepayers.

I probably didn't make myself clear on that point, but totally agree the that DCC should stay well away from it. I was merely suggesting that doing a months trial, may be better than "mothballing" everything without giving it a go.

I have no idea what proportion of train travel was local vs international tourists. But as domestic airlines are returning services to about 80 - 90 % of pre covid numbers, surely that means people are travelling, even to Dunedin.

There seems to be a mindet at DCC that ok, the railway was a nice idea but here's a good opportunity to close it down. And by selling off assets DCC can make sure the railway never restarts.

Surely trains can be run on a limited schedule rather than precovid volumes? People may be employed part time rather than full time and some will go get alternate work. But we need positivity from DCC not more negativity. Where is the phantom mayor?

The people of Dunedin and Otago have been conned and badly let down by the DCC once again. We can all laugh at the dots on the road fiasco, but this is a historic blunder that cannot be easily righted. There has been no discussion, no public appeal - only lies and deceit. Those responsible should be sacked and the councillors hang their heads in shame. As for the mayor, comparisons with a chocolate teapot come to mind.

I will give 10:1 that the DCC wants the line for an expanded rail trail - but they forgot to tell us plebs (ratepayers). Trains (and buses) are a messy business and can never turn a profit if local/central government controlled because there is no efficiency rationale to operate.

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