Dunedin City Council Reneges On Mothballing of Dunedin Railways, Now Pushing Ahead With Winding Up.

As we all know, a few months ago Dunedin Railways was closed down, but the Dunedin City Council voted to mothball it rather than wind it up completely. This, however, seems to have been just a ploy, as DCC is now calling for expressions of interest for people who want to buy the company’s assets. This shows that, far from the original suggestions that the company could be brought back into operation in the future, minus the Taieri Gorge operation, the intention is now to proceed with winding up after all, not just for the assets of the Taieri Gorge line, but all assets of the railway. This makes it impossible for the commuter train trial proposed between Dunedin and Mosgiel to proceed in the future, or anything to do with Dunedin Railways’ previous operations at all.

We reported upon DCC’s mothballing decision on our old blog in May. We identified at that time that the option voted for by DCC was to “mothball with view to explore alternative options for company assets”. Although the current action by DCC is more or less exactly in line with that decision, the wording seemed to imply a possible course of action could be to resume the operation of DRL in the future as long as it was clearly understood the Taieri Gorge Railway would be permanently closed. In addition, there was subsequently considered as a result of RMTU lobbying, the option of a commuter train trial, which DCC eventually decided not to proceed with in 2020. In theory, this option could have been picked up in the following year.

It appears, however, that the phrase “mothballing” is misleading as the intention is now to fully wind up the operation, which will preclude any future operations whatsoever by Dunedin Railways, including any prospect of a commuter train trial in 2021, as selling the assets will make it that much harder to carry out any trial. It appears this proposal has been effectively canned outright, on the assumption it would occasion unnecessary delay to the winding up of the business.

Separate to this, we understand OETT, which was the joint founder of Dunedin Railways Ltd (then called Taieri Gorge Railway Ltd) in partnership with DCC in 1990, is holding a special general meeting on 5th August to consider its future. Since they no longer have a shareholding in Dunedin Railways, having sold their 28% to DCHL, the whole basis of their operation is in question, and hence their future, unless the members occasion an interest in some part of Dunedin Railways’ assets that are coming up for disposal. OETT (Otago Excursion Train Trust) was originally formed as a nationwide excursion train operator and built up its own fleet of carriages for hire and operation nationwide on the then New Zealand Railways network. This was back in the days of public ownership when rail excursions were much simpler and cheaper to operate, and thus far more common, than they are today. The Taieri Gorge Railway operation was started by OETT in 1987 with its own custom built carriages as a private excursion train run on what were then NZR owned tracks to Pukerangi and Middlemarch, with NZR staff and locomotives. Some years after establishing DRL/TGRL, OETT sold all of its assets to the company, thus spelling an end to the era of nationwide excursion train operator, and subsequent to that, the main activity of OETT, due to its minority shareholding in DRL effectively blocking any meaningful ability to contribute to the day to day operations of the company, became the supply of volunteer hosts for DRL passenger trains.

Our preference for the Taieri Gorge line, since it is clear DCC have no intention of resuming any kind of DRL type of train operation on it, would be for a golf cart type of ultra light rail operation to run over it. If this could run through daily to Middlemarch it would give an option for seven days per week operations for serving rail trail users which has not been possible up to now because of Dunedin Railways’ spasmodic Middlemarch operations up to now. Failing that, we would like to see the railway precinct at Middlemarch and the station buildings at Hindon, Pukerangi and Sutton remain in DCC ownership and be leased for community use with heritage covenants protecting them. The rail line could then be converted to a rail trail and added into the existing rail trail, allowing it to be extended close to Wingatui. Ideally at that point DCC would create a cycleway from Dunedin to Wingatui to allow cyclists to or from Central Otago to ride all the way into Dunedin.

The key question not really addressed in the above is the future of Dunedin Railways’ carriage and locomotive assets. We note that there was no reference to their DE class locomotive which has been up for sale since 2015, and we have no knowledge of it being sold or removed from their site in that time. Regardless, there is unlikely to be much interest in the locomotives and carriages staying in Dunedin, or indeed anywhere in the lower South Island. We believe it is possible the DE might be able to be retained in the South Island – perhaps at Ferrymead, although there has been no public suggestions to this effect to date – and possibly a DJ as well. If the price is right, there could possibly also be interest in one or two DJs elsewhere in the South Island, but it seems unlikely all of them would likely be preserved, so scrapping is a real possibility. The carriages are more likely to find future homes around NZ.

To sum up: Taieri Gorge Railway / Dunedin Railways was always a pretty ambitious undertaking, and unfortunately it has not proved a sustainable operation long term. The length of track, 60 km, is much longer than any similar operation elsewhere in NZ, and it runs through a high maintenance corridor in the Taieri Gorge. Given the propensity of the Taieri River to flooding, as especially illustrated two or three years ago, keeping such a long length of track open was always going to be a tall order. We cannot help but feel, however, that allowing Dunedin City Holdings to obtain a majority shareholding was always an undesirable situation from day one. It is true that DCHL did put up a lot of capital that might not have otherwise been available, and thus bailed out DRL on more than one occasion. However, this situation along with many others have proven that a specialist niche operation such as Dunedin Railway is, will always be treated badly by a political organisation such as DCC who are always subject to the whims of unqualified politicians and city managers. Certain allegations have been made by DRL insiders that the infrastructure assets of the company were run down to the point of actively raising the deferred maintenance backlog which has been cited as a liability for future operations. Such activities are staple fodder for territorial councils who all seem to believe they are entitled to unlimited ratepayer or taxpayer funded handouts in the long term in that they can never go bankrupt so that in the short term they can focus on diverting the funds that should be going on maintenance of assets, into more prominent pork barrel activities.