The council-owned Dunedin Railways company was put into hibernation in 2020 when the Covid-19 pandemic had a drastic impact on tourism, and rail operations have since been run on a limited basis under a temporary structure while councillors consider future options.
In the meantime, the cruise industry bounced back last summer and train trips through the Taieri Gorge were largely aimed at passengers from cruise ships.
Noting Dunedin Railways was making losses, Mosgiel-Taieri Community Board chairman Andrew Simms last week described the situation as a ratepayer subsidy for train tickets, 80% of which in the 2023 financial year were for passengers from cruise ships.
"Dunedin ratepayers, many of whom cannot afford to take their own family on the Taieri Gorge railway, are heavily subsidising a loss-making commercial tourist operation that almost entirely caters for cruise ship passengers," he said.
Mr Simms is part of a working group for the Otago Central Rail Trail Trust, which is looking into a potential alternative use of the gorge rail corridor — development of a cycle trail.
The case for positioning Dunedin as a destination for cycle tourism, leveraging off success in Central Otago and creating a recreational asset for residents, should at least be considered, he said.
The city council has this year been looking into how train services might be structured and a report is expected soon.
A report by economist Benje Patterson in 2020 highlighted passengers from cruise ships were in the minority for Dunedin Railways in the 2019 financial year.
Passenger numbers by visitor origin then were 19,503 from cruise ships, 21,167 non-cruise international and 35,450 non-cruise domestic.
That was reflected in spending in the area from Dunedin Railways passengers being more than $19.4 million from non-cruise passengers and about $4.5m from cruise passengers.
"We expect these sorts of numbers to be far more representative of what future services might look like, depending on decisions to be made next year," a council spokesman said last week.
It is understood about $20m would be needed in the next 10 years to upgrade the gorge tracks.
The council decided earlier this year to retain the Taieri Gorge line, "in principle".
"Councillors decided in January to retain the Taieri Gorge train, while seeking potential new operating models for both the service and its maintenance requirements, as part of a plan to breathe new life into both Dunedin Railways and the Taieri Gorge service," a spokesman said last week.
Work carried out in the past year had "already identified a range of potential opportunities, and councillors will consider future options as part of the upcoming 10-year plan process".
