DWC investigates economics of Kingston Flyer operation

Due diligence undertaken by Development West Coast into relocating the Kingston
Flyer to operate as a heritage tourism attraction and regional development initiative on the West Coast has concluded that the concept is not economic.

The famous steam train has been sitting idle for two years in the Queenstown district since running into financial difficulties. DWC has not received an application to purchase the Kingston Flyer as has been suggested recently in the media. DWC commenced due diligence in early March before it became a media headline.

DWC management along with qualified and experienced engineering and steam train personnel visited Queenstown in mid March to view and inspect the locomotive.

They also talked with a number of parties in the industry and compliance entities as part of the due diligence process.

It was found the estimated capital cost to purchase the Kingston Flyer locomotive engines and carriage rolling stock, relocate them to the West Coast, bring them up to an operational standard and establish compliant infrastructure to run the train as a tourism initiative would be in the order of $5m to $6m. Operational and maintenance costs would make it very difficult to establish a commercially viable operation and is likely to require a substantial and ongoing underwrite. DWC is concerned such a project would create a long-term liability for West Coast communities.

DWC Chairman John Sturgeon says, “initial due diligence has found it does not make economic sense. The cost to bring the Kingston Flyer up to an operational and compliant standard is a lot higher than first thought. It’s not just a matter of purchasing the locomotive engine and carriage rolling stock. The regulatory requirements and additional infrastructure are also a major cost”.

It had been suggested that Shantytown run the Kingston Flyer on the West Coast but preliminary discussions with Shantytown found they would only be interested in operating a “Train Operating Company” provided it did not financially impact on its existing business.

“Trustees were disappointed but not surprised to hear the numbers didn’t stack up for purchasing and operating the Kingston Flyer on the West Coast and have decided not to pursue the proposal any further. DWC is however open to discussing opportunities with Shantytown to add to the steam experience they currently provide,” says Mr Sturgeon.

ENDS

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