Bike trust silent on "massive shortfall" for Kawarau trail

Trustees are refusing to answer questions about a "massive shortfall" in the funding of the Kawarau bike trail that is being built to connect Queenstown and Cromwell.

The Southern Lakes Trails Trust announced the shortfall at the end of 2023 blaming cost increases and the public's reluctance to contribute to trail maintenance costs.

When work started on the Kawarau trail in December 2023 the trust chairman Aaron Halstead told local media that there was no secured funding for two vital bridges, as well as other elements of the project.

"We’re being challenged, as a trust, to find innovative funding sources or find [other] ways of doing things, [while] keeping the quality as high as we’d always planned.

"We’re going to probably request some philanthropy — it might be for the bridges, or some other bits and pieces — and that’s all still to be worked out."

"To be honest, I understand there are processes in government, and they take time, but our original plan was when we finished the Lake Dunstan Trail [over three years years ago], in a perfect world, would have been to roll straight into this trail.

"And we were sort of led to believe, with the [conservation management strategy partial review], that we would be looking at maybe three months, four months. It took 39 months.

"There was definitely some frustration along the way."

Mr Halstead told the ODT at the trail opening ceremony that those delays had also impacted the bottom line.

Because the original funding was approved in 2016, because of the massive increase in the cost of building and materials during the intervening years, the trust now faced a "massive shortfall", Mr Halstead said.

In a number of emails sent to Mr Halstead over the last week between February 18 and 21 Crux has asked for details of the current trail funding. Mr Halstead has pointed to published accounts that appear to raise more serious questions about the viability of the Kawarau Gorge trail. He has declined to answer a number of detailed financial questions, including whether there are further, future grant instalments in the pipeline to be drawn down on.

The latest public accounts (mid 2024) show that public donations have dropped from $200,000 two years ago to just $3,000 in the most recent financial year.

In round numbers the accounts show that the trust has around $1.5 million in the bank and owes almost $500,000 to suppliers. The Kawarau Gorge trail is costing $10 million and the main asset shown in their accounts is around $11 million, being how much they think they would get if they sold the Dunstan Trail.

It’s debatable if the Dunstan Trail could in fact be sold without seeing the terms of Government funding agreements etc. as well as details of who owns the land.

Clearly selling the Dunstan Trail to fund the Kawarau Trail makes little strategic or financial sense even if it was possible.

The Kawarau Gorge trail is 50% finished, meaning the trust needs at least another $5 million to get the job done, plus extra cash for the new trail to Wānaka and another section near Roxburgh. Plus maintenance on the finished trails.

Trust chair Aaron Halstead

There’s been no news since the 2023 opening ceremony on the trust’s success or otherwise in finding “innovative funding sources.”

The Kawarau Gorge trail is 50% finished but there’s no clarity on where the rest of the money is going to come from - including the cash for two new bridges.

Funding for these types of projects is often drawn down in stages but so far the Southern Lakes Trails Trust has declined to supply any detail of the next drawdown (if there is one) and how much it is for.

The Government has recently stopped funding commuter bike trails but we don’t know if this does or can effect the Southern Lakes Trails Trust. We also don’t know if increased costs (the original $26 million was agreed back in 2016) simply means that there’s not enough cash in the budget to do the work in 2025.

Funders include the NZ Government, the Central Lakes Trust and the Otago Community Trust.

Crux will be checking in with all three funders next week.

One of the trail trustees is CODC mayor Tamah Alley who has been assisting in Crux efforts to get answers from chair Aaron Halstead during the last few days. Late yesterday (Friday November 21) she sent the following message to Crux:

“These questions are all coming to our next trust meeting - probably best to have them on the record there where everyone can contribute.”

In various, limited replies to detailed Crux questions this week Mr Halstead has supplied the following statements. He has not responded to our detailed financial questions.

“The trust was created in 2016 to deliver a 170km network of cycle trails joining the rides throughout Central Otago and Queenstown Lakes. This was supported via $26.3m of funds to build the trail network as indicated.

"Central Lakes Trust ($11.15 million) and Otago Community Trust ($2 million) contributed a total of $13.15m, and this was matched from Ngā Haerenga, the New Zealand Cycle Trail fund with $13.15m. Total from the 3 sources of $26.3m.

"$11.5m of current assets is the actual physical trails built to date. The remaining amount is cash in the bank to pay contractors for current trail building.

"If we have limited time to reply to your conspiratorial requests, it is because we are volunteers, and our precious time is focused on actually building the community asset trails.

"If you would like to be helpful and constructive, it would be beneficial if you could assist us in getting more donations from the trail users for the maintenance of the assets that we are building. This is the ongoing challenge nationally - everyone wants the asset, but many are reluctant to help fund the ongoing maintenance of such assets, even when they actively utilise the asset.”

Main Image: MP Joseph Mooney, CODC mayor Tim Cadogan (2023) and QLDC mayor Glyn Lewers help break ground ay the Kawarau trail opening ceremony.

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