Dunedin Railways seeking to offload assets

Published in the Otago Daily Times, 31 July 2020.

By Molly Houseman

Looking for a life-sized railway set? Dunedin Railways has what you are looking for.

The Dunedin City Council-owned tourist and charter train company closed its doors on March 23 and was put into hibernation on July 1 after its main source of revenue, overseas visitors, stopped when New Zealand’s borders were closed due to the Covid-19 pandemic. About 50 people lost their jobs. Only six people remain employed to maintain the company’s assets.

Now it is looking for submissions from individuals or groups who have viable business propositions for the use of its assets or proposals to buy some or all of them.
Among the company’s assets are six locomotives, 23 carriages, including six wooden heritage carriages, 64km of track and the associated thousands of sleepers, a house at the Middlemarch Station and the Pukerangi toilets. The Crown owns the rail corridor (the land), 39 bridges and 10 tunnels, which are leased to Dunedin Railways.

Maintenance of the corridor, bridges and tunnels is Dunedin Railways’ responsibility.
A submission requires a detailed description of a business proposal, including what equipment would be used and the short- to long-term viability of the model, while considering the uncertainty surrounding international tourism, the call for expressions of interest says.
The document says before Covid-19, the company was forecasting ongoing losses of about $500,000 per annum, and impending expenses of $10 million over the next 10 years on the Taieri Gorge line infrastructure.

It was considered unlikely Dunedin Railways would have sufficient tourist activity to operate for at least the next 18 to 24 months, it said. Expressions of interest close on August 13.

Rail and Maritime Transport Union Otago branch secretary Dave Kearns said a longer submission timeframe would allow people to plan and put a better submission forward.
The union planned to make a submission and would challenge Dunedin Railways on its reported financial position, he said.
The union believed Dunedin Railways could run a “substantial” number of trains with domestic tourists only.

“Hopefully, this time they listen to what they receive,” Mr Kearns said.
The call for expressions of interests opened as a Dunedin Railways train chugged its way from Dunedin to Middlemarch and back yesterday.
Mr Kearns said he was not sure of the purpose of the trip, but believed carriages were taken to allow the air-conditioning units to be run and keep the infrastructure in a usable condition.
“While they were doing that, we are pretty sure that they could have sold tickets and run a train.”
Dunedin City Holdings chairman Keith Cooper said an engine travelled to Middlemarch “for maintenance of the carriages currently stored in that location”.