South Island-based Pounamu Tourism Group, which runs the Sir Edmund Hillary Rail & Coach Tours, said it was prepared to back Dunedin Railways, working closely with the Dunedin City Council on a potential new operating model.
Group managing director Paul Jackson said the council had received its proposal.
“We expect initial feedback in January followed by a public consultation process.
“We have always seen potential in DRL and have worked closely together for the last three cruise ship seasons successfully marketing DRL’s cruise ship product during the hibernation period.
“For the last six months we have devoted considerable time and resources to dive deeper into the workings of the DRL business to develop a strategy that we believe will be successful going forward.”
Mr Jackson said Pounamu, if chosen by council, would in effect subsidise Dunedin Railways by re-routing their Sir Edmund Hillary Rail & Coach Tours to include three days of charters, being Invercargill to Dunedin, Dunedin to Pukerangi/Middlemarch and Dunedin to Oamaru/Timaru, and would commit to 190 charters a year — one every second day.
“If chosen to run Dunedin Railways, Pounamu will commit a whopping $30million over nine years to triple these charters [from one charter per tour to three charters per tour] as an anchor to stabilise the Dunedin Railways business model.
“Pounamu will make the charters non-exclusive and then on-sell a portion of each charter train [half of the carriages] to the wider tourism market, including the wholesale and retail tourism trade, the free independent traveller and the domestic market, effectively at subsidised rates. We will not be running any more empty trains as they will already have New Zealand’s leading rail tour as a base customer.”
Mr Jackson said Pounamu would uphold and improve the Dunedin Railways (DRL) brand standards set by council and consider co-investing in a new maintenance depot.
It would also invest in the acquisition and repairs of the additional rolling stock required to expand the operation.
“We will keep all existing Dunedin Railways staff — and in fact grow the team and bring the team on board with a new clear vision, in a profitable and motivational working environment and then reward that team for performance.”
Dunedin Railways, which is owned by the Dunedin City Council, was put into hibernation in 2020 when passenger numbers collapsed because of the pandemic.
The company then began operating shorter excursions, but recently it celebrated the return of the signature train ride to Pukerangi.
Mr Jackson said the economic impact of re-routing the tours to three charters per tour (as opposed to one charter) would be over $50m to the Dunedin economy including 67,000 bed nights for the same period.
“You cannot expect different or better results than previously experienced if you plan on doing the same or similar activities that have failed in the previous model — so our proposal and new vision is clearly a step up and clearly backed up by tangible numbers.”
Assets would remain in council and ratepayer ownership, he said.
Dunedin City Holdings Ltd chairman Tim Loan was asked about whether Pounamu had approached the council.
“There is no information to share at this point.
“Council are looking at options for the future of Dunedin Rail [DRL]. Council have advised that their decision on the future of DRL will form part of their nine-year-plan consultation next year.
“DCHL and DRL will continue to support council in their decision-making.”
Cr Sophie Barker said she was unaware of Pounamu’s proposal, but said any initiative that could build up passenger numbers would be worth exploring.
Before the pandemic, Dunedin Railways had up to 100,000 passengers a year and “the council is looking at various ways to return to that number”, she said.
matthew.littlewood@odt.co.nz
