Pounamu Tourism Group (PTG) and Dunedin City Holdings Ltd (DCHL) have begun talks about Dunedin Railways Ltd, but these discussions are still in their early stages and a finalised proposal is not expected for some time.
New carriages, which are parked at the Dunedin Railway Station, have been bought by PTG as part of its move to the South.
PTG managing director Paul Jackson said its intentions were to increase international tourism charter bookings with Dunedin Railways "by tenfold" over the next three years.
Dunedin Railways had been struggling with calls for it to close after racking up hefty losses, but the Dunedin City Council delayed any decision on its future.
The plan was to continue working with the existing Dunedin Railways management team and staff, as they had the necessary "culture and expertise" to guide the transition into a successful, fully operational and commercially sustainable business.
PTG would also recognise community initiatives and the local Dunedin market, helping to create a "steady flow" of international and domestic tourists.
"We feel that there is room for the rail enthusiast groups and we can make provision for special trains and activities."
However, it was vital to create a commercially successful operating model, including the "expertise and engineering skills" available with the existing Dunedin Railways.
The existing team was "passionate and raring to go".
He could not disclose further details of the proposal while discussions were at such an early stage.
"We are in discussions with DCHL chairman Tim Loan and general manager Peter Hocking ... we will submit our proposal in the coming weeks to DCHL who will then follow the process and submit it to Dunedin City and DCC."
The new carriages would operate on the main railway line, allowing the existing Dunedin Railways fleet to focus on providing additional services in the Taieri Gorge.
"It goes without saying that [the] Taieri Gorge is important and will continue as part of our model.
"However, we will be looking to also boost trips to Waitati and Oamaru and there are potential plans afoot for Invercargill and other destinations, as long as we can make the business case work."
PTG would pay for repairs to the refurbished British Rail Mark 2 carriages at Hillside Workshops in South Dunedin.
"The carriages are the first step and just one part of a larger puzzle, which will be presented to DCHL and DCC.
"Once we have followed due process, we will be in a position to share the exciting details about our robust plans at a later stage."
Pounamu Tourism Group, a privately owned group, runs train journeys in and around the Marlborough area.
It started in 2017.
Mr Loan said DCHL had a "good relationship" with PTG and looked forward to working with them on future projects.
"We’ve operated with Pounamu for some time; they work with us in terms of the cruise ships, in particular.
"I think it’s exciting they’ve bought the carriages and looking to get them refurbished ... they’re a partner we enjoy working with."
The project was funded entirely by PTG.
"Pounamu Tourism Group believes in the future of Dunedin Railways and in the current team at Dunedin Railways, which is why we are seriously considering this investment.
"Our involvement will add value and will unlock additional potential."
