Water uncertainty could derail train service planning: DCC

Determining the future shape of Dunedin train services could be influenced by what the government wants to do about water.

Lack of certainty about the government’s intentions for water reform and council-controlled organisations (CCOs) created another impediment to completion of a long-awaited report about options for Dunedin Railways, the Dunedin City Council suggested.

The council would not put forward options about which model might best suit the rail operation for the years ahead until councillors first understood proposed legislation about CCOs, a spokeswoman said last week.

A report about how Dunedin rail services could be structured had already been held up for several months.

The council decided almost a year ago it was committed in principle to retaining a Taieri Gorge train service and it has since been exploring how this could function.

Dunedin Railways is a CCO and is part of the Dunedin City Holdings group of companies owned by the council.

Possible adjustments to the way CCOs worked were mentioned by Minister of Local Government Simeon Brown late last year in a letter about water reform to Dunedin Mayor Jules Radich.

Financing water infrastructure upgrades looms as a big issue for councils and a key principle of the government’s plan for the sector is "ensuring water services are financially sustainable".

Mr Brown said legislation repealing aspects of the previous government’s reforms could be introduced next month.

Sandy Graham. PHOTO: ODT FILES
Sandy Graham. PHOTO: ODT FILES
He also said a key principle of the plan was "fit-for-purpose service delivery models and financing tools, such as improving the current council-controlled organisation model and developing a new class of financially separate council-owned organisation".

In an email to councillors, Dunedin City Council chief executive Sandy Graham said Dunedin rail could be affected.

Ms Graham also noted the government had not provided details about precisely what changes it had in mind for CCOs.

Dunedin Railways has been in hibernation since Covid ravaged the tourism industry, and limited rail operations have since run under a temporary structure.

The council is poised to decide before adoption of its 2024-34 long-term plan which operating model might work best.

Among the challenges is paying for upkeep of the Taieri Gorge line, which has been a burden rail operators have struggled to deal with.

The council is also due to consider material about a possible alternative use of the rail corridor — development of a trail for walking and cycling.

Preparation of the council’s 2024-34 long-term plan has been complicated by shifts in government policy about water, particularly concerning the status of assets.

The previous government’s plan to take water activities away from councils is set to be reversed.

One interim response from the government relating to councils’ concerns about implications for their planning is allowing a three-month extension to September 30 before they have to adopt this year’s long-term plans.

"This flexibility may be desirable to smaller councils with fewer resources, or those councils that would prefer to wait until the repeal legislation is enacted before starting consultation," Mr Brown said in his letter to Mr Radich.

Mr Brown said the government would restore council ownership and control of water assets.

"This new regime will acknowledge the importance of local decision-making and flexibility, allowing communities and councils to shape their future water service delivery," he said in a statement last week.

"The repeal bill will introduce temporary legislative modifications for the 2024 long-term plans," he said.

"This will offer councils the flexibility they need to effectively plan and finance their services."