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THE SUCCESS of a proposed rail hub in Wairoa depends on support from forestry groups and KiwiRail’s commitment to increased service.
Hawke’s Bay Forestry Group chief executive Keith Dolman says usage will shake down to the extent to which rail offers cost efficiencies and it might come to a case of “build it and they will come”.
Mr Dolman said forestry operators around Wairoa had committed about 20 percent forestry volume to rail and were following the resurgence with a good deal of interest.
“If KiwiRail committed to four to six daily truck loads to a Wairoa railhead, this commitment would be much greater.”
In the short term, Mr Dolman says usage expectations of the weekly rail service will be limited by location and existing marketing commitments.
“Rayonier’s most northern estate, for instance, is 40 minutes south of Wairoa and it is unlikely they would find an economic case for trucking logs north to a rail head.
“Pan Pac’s forest is similarly located and, of course, they are committed to a mill that might not be serviced by the rail link.
“Juken NZ would require a strategic marketing shift to utilise this link, as their wood travels north to processing and export facilities in Gisborne.
“Wairoa-based Grandy Lakes Forests are eight years away from significant harvest volume and yet to determine their final crop type.
“Having said that, they are comfortable in committing approximately 20 percent of forest volume to rail. This would be reviewed at the time of harvest.”
Forest Management New Zealand Ltd, which manages Roger Dickie estate, was emerging as a major player in the district.
“They will have a limited harvest by 2019, with real volumes expected from 2020, and are holding a positive view on the rail link.
He likened the Wairoa hub’s potential growth to Masterton rail into Centerport (300,000-400,000 tonnes per annum) and the Palmerston North/Wanganui rail to Napier port (likely to move to 300,000 tonnes per annum).
“From a slow start, both have grown into vital supply lines as harvest levels lifted and trucking capacity and labour supply became stretched.”
Commitment would depend on the extent to which the rail facility could lift trucking from one to two loads a day out of Wairoa to Napier into, say, 4-6 loads daily to a railhead in Wairoa, Mr Dolman said.
“This might influence greater buy-in, if that truck that carries a max of one to two loads of logs from forest to Napier daily can be re-routed to service four to six loads to a rail hub in Wairoa.
“Beyond the economics, there is advantage in keeping trucks off the road in general, and opportunity in sourcing labour for the rail siding and the trucking from Wairoa, along with support services.”
“While the forestry industry was not driving the rail process, nor playing a meaningful part in the due diligence behind the political decision to rebuild, companies will avail themselves of any opportunity to reduce marketing costs and to reduce trucks on roads.
“Actual location of the rail head may influence that decision.
“Forest companies also generally do not own trucks and will rely on that industry responding to the changing market and we can only speculate at this time on where they will come from and how many are needed.
“As for the private woodlot owners, they too will be responsive to opportunity — meaning plantation location will be the decider,” said Mr Dolman.
KiwiRail’s senior communications advisor Simon Kilroy said it was too early to say when work on the hub would commence or how many jobs will be created.
A Wairoa weighing and scaling logging hub is likely to be adjacent to the railway line where the logs are stacked to await rail transport to Napier Port.
KiwiRail is proposing to develop a hub on land it already owns between Ormond Road and Kaimoana Road.
Heavy rain earlier this month led to a new large washout on the Napier Wairoa rail line which could delay a reopening.
Group General Manager Network Services Henare Clarke said the team was naturally disappointed, particularly as the weather event occurred so soon after rail reinstatement work had begun.
Work on reinstating the line began in February following the Government’s Provincial Growth Fund announcements. It had only been under way for 10 days when intense rain hit.
Damage included a large wash-out affecting over 100m of track, multiple smaller wash-outs, and debris such as trees on the track.
A Kiwirail spokesperson said more than 100 KiwiRail staff and contractors would work on the project to re-open the Napier to Wairoa line for log trains.
This work would take 5714 trucks off the roads each year.
This article first appeared on gisborneherald.co.nz
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