The big news in rail heritage this week is that Dunedin Railways has proposed to stop running trains from Pukerangi to Middlemarch on the Taieri Gorge Railway. The decision was announced on 5th December. The next day, Dunedin City Council said they had received no prior warning of the decision and that they would require a period of public consultation before allowing the decision to go ahead.
Currently, trains between Pukerangi and Middlemarch operate, on average, about every two to three weeks, but in practice, trains are only run during the peak tourist season, so that the actual frequency during that season is higher, but operations will stop completely during the cooler period of the year. This frequency is much lower than the Taieri Gorge Limited trains to Pukerangi which are at least daily year-round and can be run more often than once a day during the busiest times. Dunedin Railways, among other reasons, has cited the low demand for the Middlemarch trains compared to the costs of maintaining the track among the reasons for stopping the Middlemarch service. This service is the only one that meets the end of the Otago Central Rail Trail, and Middlemarch is the only actual township served by the Taieri Gorge Railway as there are no other population centres west of Wingatui. Middlemarch is within the boundaries of Dunedin City and this is one of the reasons it was chosen to be the terminus of the Taieri Gorge Railway when the line was purchased from the Government in 1990.
There are many questions that need to be asked, including the commercial aspect of the decision. Dunedin Railways was effectively founded by the Otago Excursion Train Trust, a non-profit heritage operator, in partnership with Dunedin City Council. Originally they each held a 50% share of the company. However because of a requirement to inject additional capital into the company at various stages, OETT’s shareholding has dwindled to 28% at the time of writing this, with Dunedin City Council (formally Dunedin City Holdings) having a majority shareholding of 72%. This implies OETT did not have the means to provide the additional capital at the time it was needed. Due to the minority ownership position that OETT are in, they do not have much ability to influence the business culture of Dunedin Railways. This leaves DCH in the position of being able to direct DRL into more of a commercial focus than perhaps some would like. The problem is that DCH is being pressured by DCC to focus on producing divendends out of its commercial holdings. Whilst we have no information to confirm specifically that DCL has pressured DRL to produce a dividend from Dunedin Railways, it remains a possibility that Dunedin Railways is being pressured to increase the financial return out of its operations.
OETT’s position appears to be one of discontent about its minority shareholding position with the company. We have not had this officially confirmed, but have sighted OETT newsletters that have strongly implied this being the case. It is known that a Memorandum of Understanding between OETT and DRL took many months to negotiate before finally being confirmed relatively recently. It is also known that OETT are attempting to negotiate some sort of case that they have called a special general meeting of their members to discuss and that OETT have had difficulty in getting agreement from Dunedin Railways management on projects that they have wished to fund on the railway. But for the record, OETT have declined to comment in any shape or form about the situation relating to Dunedin Railways or anything at all to do with the Middlemarch issue.
It does appear to us that if the Railway does get closed beyond Pukerangi that the best option would be for OETT to step in and take it over, as well as the Middlemarch rail heritage precinct. The next step could be to lease the line to be operated with light vehicles for a daily operation to meet the train at Pukerangi, for people arriving or departing Middlemarch on the rail trail. We believe it is unlikely that the 18 km of line could be maintained for normal heavy rail operations and therefore light vehicles (golf carts?) would require less maintenance. This option would have the advantage of providing a daily connection that is not currently possible with the present irregular services. Some sort of special vehicle to carry bicycles would be needed.
We understand Dunedin City Council is currently consulting on the matter and everyone should take the opportunity to submit to their process. We will post more details of this as soon as we have them.