Refusal of KiwiRail to extend timeframe for finalisation of a lease of the Napier Gisborne Railway

Don Selby, Chairman of Napier Gisborne Railway Ltd (NGR), advisers to the Hawke’s Bay Regional Council on the options for reopening all or part of the mothballed Gisborne to Napier railway, expressed disappointment that KiwiRail has advised today that it will not grant an extension of time to the Council to finalise a lease of the line.

Mr Selby notedthat KiwiRail was aware that NGR was working with the Council to prepare a business case for the total or partial reopening of the mothballed line.  KiwiRail was aware that the Corporate and Strategy Committee of the Council was meeting on 18 February and undertook to prepare a draft Heads of Agreement for consideration by the Council.

A draft document was received by the Council mid-afternoon on 17February which was insufficient time for the Council and its advisers to review the document and respond.  At the Corporate and Strategy Committee meeting on 18 February NGR advised the following:

  • There appears to be a viable case for reopening the line from Wairoa to Napier for the purpose of hauling export grade logs to Napier Port.
  • There were a number of matters outstanding relating to the draft Heads of Agreement submitted by KiwiRail that must be resolved before the Council could enter into a 30 year lease with KiwiRail.
  • Unless these matters were resolved it was most unlikely that any railoperator would be prepared to commit capital to the project.

TheCommitteerecommended to the full Council that it advise KiwiRailthat the Council agrees in principle to a lease of the line subject to the terms of the lease and a number of operational matters involving KiwiRail and a rail operator being resolved to the satisfaction of the parties.

The Committeerecommended that the Council seek a reasonable extension of the time to resolve the remaining issues that, with continuation of the goodwill and cooperation by all parties,should enable a successful conclusion to be agreed.

The Committee recommended a final deadline of 30 June 2015 for resolving all outstanding matters and the Council securing a rail operator with sufficient funding to undertake the proposed rail service.

These recommendations were ratified by the full Council on 25 February 2015 and communicated in writing to KiwiRail on 27 February 2015.

Between 27 February and today we understand that there have been only two high level meetings of the Council Chairman and Chief Executive with the Chief Executive of KiwiRail.  To the best of our knowledge at no stage during these meetings was there a discussion of the substantive issues outstanding.  The expected next stage in the process was a meeting to discuss the matters detailed in the report to the Corporate and Strategy Committee on 18 February and the draft KiwiRail Heads of Agreement.  No date has yet been set by KiwiRail for such a meeting.

This decision by KiwiRail is very disappointing in view of the decision by the Council to proceed as quickly as possible to resolve outstanding issues.  Despite the decision NGR remains ready and committed to work with the Council and KiwiRail to find an acceptable outcome.




For further information please contact:

Don Selby 027 438 8472

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