Article: Commercial
The Economic and Social Impertive of Fast Tracking the Rail Link to Marsden Point
In the Northern Advocate of Friday the 24th July another logging truck accident was reported. The driver was killed and two houses narrowly escaped as the truck rolled onto an empty section between them.
As reported in previous issues of PropertyPlus timber exports from Marsden Point are increasing dramatically with accompanying increased risks and costs for Northland roads. The following quote from North Port’s June 2009 newsletter further highlights this.
“Since February we have seen 5 months of the strongest log export volumes through the port since mid 2003. This has resulted in higher than forecast volumes for the current financial year by about 12% which in the current financial environment has helped the port considerably as other trades have slowed or stopped completely.
Log exports through the ports over the next two or three years are expected to increase due to harvest volumes increasing as Northland forests mature. This along with a very soft domestic demand under the current environment means log exports should stay high as long as the demand stays were it is at the moment. While the increased volumes are great, they have been large enough to put pressure on the log storage capacity at the port.’’
The rail link to the port enables the stock piling of logs at loading sights near the forests along the rail network and then moving them by train directly to the port.
Two of the largest forest companies put in very strong submissions for the rail link and it is worthwhile to quote from these.
“Hancock Forest Management is the largest forestry manager in New Zealand and Northland managing approximately 60,000 hectares of plantation forests from as north as Te Kao and south as Woodhill in the south Kaipara. Our forests provide employment, both direct and indirect, and a major recreational resource along with their primary purpose of being a sustainable source of wood fibre for the domestic and export market.
As a business we are constantly under critique for the number of trucks we have on the roads and how these trucks behave. Roads in Northland are not always up to safe standards and other road users are not accustomed to log trucks on Northland roads. Log trucks pose health and safety risks because of this. The rail link therefore has the potential to reduce truck numbers on the road.”
“Pentarch Forest Products (PFP) limited is a log exporter that uses up to 5 New Zealand ports at any one time including Marsden Point.
It is intended to grow the Marsden Point business to a 100,000 tonnes per year by 2010. All this volume will have to be delivered by truck until the rail link is built. Once the rail link is built it is expected that 50% of this volume will be able to utilise rail delivery to the port.
PFP is going to be contracted by Bio Pacific Energy ltd (BPE) to supply 400-600,000 tonnes of wood waste to a wood processing plant being planned by BPE to be built near Marsden Point. Initially all logs will have to be delivered by truck but once the rail link is built our logistical planning indicates that 60-70% can be delivered by rail if costs are competitive with trucking.”
From an economic perspective it is also relevant to quote the following from Business Northland February 2009.
A report form Opus International consultants point out that forestry is about $600m pa for Northland. There is a 10-20 % loss in value due to sub-optimal in forest log making. In other words if central processing of logs is possible then 10% extra value is retained. That’s $60m pa. The key enabler for this to happen is the rail link to Marsden Point. It also points out that logs and freight can be stored in bulk which saves port storage costs.
As forestry production has the potential to increase 200% that’s an extra $180m pa just for timber.”
Given the excellent work done to date by government, local authority and concerned industry to progress the designation process it now requires the political will to fast track the rail link’s consent approval and construction.
The $120m to build a rail link (which will generate returns for decades) must surely rate as the best value for money infrastructure investment going.
