Taieri Gorge Railway vs Otago Central Rail Trail Saga [1]

This is Part [1] of a planned series of three articles on the current TGR-OCRT saga, whereby the future of the Taieri Gorge Railway is suggested to be as a conversion into an extension of the Otago Central Rail Trail. This is shaping up to be quite a controversy in 2023 and has involved much political and public conflict in several circles.

Two months ago, a post on this blog detailed the proposal by OETT (Otago Excursion Train Trust) to turn the Taieri Gorge Railway into a heritage railway. that was then the latest instalment in the saga of the Taieri Gorge Railway, which goes back some 36 years to date. The Taieri Gorge Railway conceptually started in 1987 when OETT inaugurated the Taieri Gorge Limited train service as a response to the uncertain future of the Otago Central Branch railway, which eventually closed in 1990. A TGL type of train has operated ever since, under the auspices of Taieri Gorge Railway Limited (since renamed Dunedin Railways), but its future in its present form is once again under question. The Otago Central Rail Trail and Taieri Gorge Railway both started up about the same time – in 1993, after the OCB rails and sleepers had been lifted from Clyde back to Middlemarch; however, Companies Office records show TGRL was formally registered as a business in 1995. The rail trail from that point took seven years to develop, finally opening in 2000 – whilst the TGR line from North Taieri to Middlemarch was already running, so the passenger train services simply rolled over from one operator to another. Both have played their part in fostering tourism in the area, and if there has been any rivalry or friction, it’s been seemingly going under the radar until now.

Dunedin Railways, which still owns the 60 km Taieri Gorge Railway – for now – is a company that when formed had its shareholding vested in two entities – Dunedin City Holdings Ltd (a wholly owned subsidiary of Dunedin City Council), with 72%, and OETT, with 28%. The minority shareholding position taken by OETT appears to have been a strategic mistake. TSBNZ is not however able at this time to to ascertain how this situation was arrived at, but a preferred situation by far would have been for OETT and DCHL to each hold 50% of shares. Over the 30 years of operation of DRL, the minority position of OETT with its consequent lack of control over the direction of DRL has been the subject of much angst from the OETT leadership. At the same time as DRL was formed, or within a few years of it being formed, OETT sold all of its rolling stock (including its excursion train fleet) to DRL. OETT’s main reason for existence up to that point (the excursion train fleet it was named after) was thus removed from its control. True, it was possible for DRL to run excursions with the fleet itself – and over time trips on the MSL north of Dunedin became a regular service – but the availability of the carriages for use around the country and particularly in Otago/Southland for interesting public excursions apart from the Taieri Gorge line was severely curtailed from that time – this looks like another strategically questionable decision, although in retrospect, the public excursion market at that time was rapidly shrinking, due to changes in national network policy resulting in much higher track access charges and greatly increased maintenance requirements for privately owned rolling stock. In more recent times, as DRL faltered and was mothballed by DCHL in light of the negative impact of the the Covid-19 pandemic on tourism, OETT rapidly exited its entire shareholding in DRL at a book loss of over $800,000 – so what had been in theory a 28% control of DRL has now become zero. Considering that OETT is now embarking on a quest to regain control of the Taieri Gorge Railway, its position in selling out its shares three years ago must also be considered mistaken. However, as a shareholder, OETT would be exposed to financial losses at Dunedin Railways if it continued to operate with book losses, and the prospect of these becoming significant in 2018 may have been a strong motivation for the sale of shares. These are, of course, among the pitfalls of being a minority shareholder. Nevertheless, OETT has since claimed it was blindsided by the buyout offer proposed by DCHL, which purchased its shareholding.

So how did Dunedin Railways get to this point? There have been many news reports and articles about the situation of the Taieri Gorge line in recent years especially since the suggestion has come about that the TGR should possibly be closed down, or perhaps cut back to Pukerangi, about 20 km short of the Middlemarch terminus. Pukerangi was the original destination chosen for the Taieri Gorge Limited service way back in 1987, and has been the most common destination of all DRL trains as well. Pukerangi, however, as a stopping point for the train is little more than a turnaround location, where the train simply turns around for the return journey after a short delay, or one where passengers can transfer to other services; very often, tour parties would join or leave the train at Pukerangi with the respective initial or final stage of their journey being taken by road coach. Middlemarch, on the other hand, is the first residential township of any substance west of Wingatui, and thus as this became a part of Dunedin City in 1989, it was logical for the Taieri Gorge Railway to have Middlemarch as its terminus. Thus, the railway was formed with a track length of just over 40 km in the section to Pukerangi and 20 km in the section to Middlemarch. Operations to the farther location were, however, not as regular as those to Pukerangi. The biggest question that would inevitably come to be asked about the Taieri Gorge Railway over time would relate to the ease or difficulty of maintaining such a long length of track – especially through the Taieri River Gorge, from which the railway derives its name. Here there is some difficulty due to the unique nature of DRL – being a publicly owned entity controlled by a local government organisation with a somewhat diminished focus on profits and a greater emphasis on wider benefits, it might be assumed to have a greater ability to realise cost savings than a private company. Whether or not this is the case, no community run railway in NZ prior to DRL has ever succeeded in maintaining more than 13 km of track long term – this example is the length of the Weka Pass Railway at Waipara in North Canterbury, and that was cut down from 29 km which they originally purchased when they set out to establish their project a decade before Dunedin Railways. It took the Weka Pass Railway members only four years to decide their track was too long to be viable, and the reduction of track length was commenced in 1986 and completed in 1991, nine years after their project was started, and with a large effort mostly by voluntary workers with limited machinery.

The experience of the Weka Pass Railway, which like the Taieri Gorge Railway is a part of a former branch line, makes a useful comparison with that of Dunedin Railways. Unlike the early experiences of Weka Pass Railway members, Dunedin Railways has always used paid staff and major machinery to keep its line in operation (although in recent years WPR has acquired heavy machinery such as an excavator to speed up track replacement works with much less of the hard physical effort required by individuals). Both operations have run up against similar challenges with the ageing of their railway assets which were first constructed a century prior and towards the end of their operational lifetime in the national railway system experienced significant levels of maintenance deferral. A keen appreciation of the latter issue guided the decisions made by WPR members from 1986 to 1991 in the removal of 16 km of track beyond the present Waikari terminus and the major efforts needed to rebuild the present 13 km operational section back to Waipara. By contrast the Taieri Gorge Railway has presented and continues to present a much greater challenge which has only been achievable because of the reasonable financial returns from commercial train operations. The TGR also has major structures which do not exist on the Weka Pass Railway such as ten tunnels and about thirty bridges whereas the WPR has just one very small bridge in its track (a privately owned overbridge near Waikari was removed a few years ago). More than half of the bridges on the TGR are in the Taieri Gorge and are of significant size, the largest being the Wingatui Viaduct which is 197 metres long and 47 metres high. Significant deferred maintenance on these was avoided in the late 1980s when a blanket speed restriction of 15 km/h was imposed on all of the larger structures and which endures to the present day. It will not be possible to continue to avoid the long term burden of the TGR’s significant structures indefinitely, and in some respects it is remarkable they have lasted this long without major work.

Well that is the end of this Part [1] of a series of three articles looking at the past, present and future of the Taieri Gorge Railway in light of the current saga of pitting the future of the route as an operational railway versus a rail trail. Part [2] is already half completed and will probably appear on the blog later today.