Railways decision could be deferred

Determining the future shape of Dunedin Railways could be kicked down the line.

Dunedin City Council staff have recommended deferring a decision about its future until the 2025-34 long-term plan is considered.

Parent company Dunedin City Holdings Ltd could be directed to continue to fund up to $2 million a year for maintaining and operating Dunedin Railways using the KiwiRail line and Taieri Gorge line from near Dunedin to as far as Hindon until June 30 next year.

Council staff also recommended an "options assessment of rail, cycling and walking" be prepared ahead of the nine-year plan to be adopted next year.

Extension of the Otago Central Rail Trail past Middlemarch towards Dunedin — for cycling and walking — has been pitched as a possible alternative use of the gorge corridor.

Otago Excursion Train Trust deputy chairman and Federation of Rail Organisations president Grant Craig was disappointed by the possible decision-making deferral.

It had taken people by surprise, when they had been preparing submissions about the rail operation’s future, he said.

Mr Craig said he felt sorry for railway staff, who might be "in limbo for another year", and he expected deferred maintenance on rolling stock and track infrastructure could be put back another year, and there might be "another year lost in finding an alternative maintenance facility" amid preparation of another report.

"There’s been a number of track reports already, including one by the Otago Excursion Train Trust, bridge reports, cycleways reports, economic benefit reports and the list goes on."

Mosgiel-Taieri Community Board chairman Andrew Simms said the council and its companies were looking at "funding a loss, basically" of the railways operation of up to $2 million.

Mr Simms, who is part of an Otago Central Rail Trail Trust working party, said a fresh evaluation of all the options could be helpful.

The train trip through the gorge is an acclaimed tourism product for Dunedin.

However, train services — when considered together with track upkeep needed in the gorge — have for years effectively operated at a loss.

Dunedin Railways went into hibernation in 2020 amid disruption from the Covid-19 pandemic.

Limited train services have since been run under a temporary structure.

The city council had been shaping to present options for consideration ahead of public consultation for its draft 2024-34 long-term plan.

However, last month it deferred the long-term plan by a year.

Back in January last year, councillors decided they should retain a Taieri Gorge train service as a key part of the city’s visitor economy.

The focus then shifted to considering the best options to secure and enhance the gorge experience, and how rail maintenance might best be dealt with.

Council chief executive Sandy Graham signalled in September a report about trains was imminent, but it did not materialise last year.

An update was provided at a council workshop earlier this year.

It was disclosed there the possibility of separating the track and below-rail from above-rail operations had been looked into.

Guidance from Deloitte was this would be more trouble than it was worth.

The council signalled a ratepayer subsidy of about $20m across 10 years might be suggested to residents in 10-year plan consultation to facilitate a track maintenance catch-up.

However, the 10-year plan was later scrapped, to be replaced by an annual plan, followed by a nine-year plan.