However, KiwiRail chief executive Greg Miller said the company was not "at that point yet" to consider its permanent closure.
The declaration from Mr Miller follows a statement from Rail and Maritime Transport Union general secretary Wayne Butson, who
said he had confirmation from KiwiRail that it was planning the closure of the Ohai to Invercargill branch line, commonly referred to as the Wairio branch.
He said the impending closure of a Southland rail line would go against the Government’s own commitment to provincial infrastructure and upgrading New Zealand’s rail network.
The union was unhappy that an application by KiwiRail to the Provincial Growth Fund has been declined, he said.
“A line closure means double-handling and more trucks on South Island roads — the exact opposite of what the Government says it is trying to achieve.”
Mr Miller replied that no final decision had been taken on mothballing the Wairio branch line.
However, he said the line was "dilapidated" and required investment of more than $5million to ensure it could continue to operate safely.
The line was last used for passengers in 1954 and KiwiRail uses it only to move coal from Ohai for Bathurst Mining, he said.
"Bathurst’s consent to mine at Ohai runs out in five years’ time.
“It would be remiss of KiwiRail to spend $5million on the line with no certainty of long-term customers.
“We’re approaching both the Government and Bathurst to see if there is any financial support for the required upgrades to the line."
He said if the company did not secure any support, it would considered mothballing the line.
This would not have any implications for KiwiRail staff, who would be redeployed within Southland.
“If none is forthcoming, we will consider mothballing the line but we are not at that point yet."
Minister of Transport Phil Twyford and Associate Minister of Transport Julie Genter would not comment the matter.
