9 Aug 2017

Gorge closure: 'We can't sustain the losses'

9:29 pm on 9 August 2017

Calls are growing for an economic assistance package for businesses affected by the massive slip which has closed the Manawatu Gorge on State Highway 3.

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Work on the slip was suspended indefinitely in July. Photo: NZTA

The gorge, which is the main route between Palmerston North and Hawke's Bay, has been closed indefinitely since April.

Clothing retailer Oosh said trade had dropped off by as much as 60 percent at its three Woodville outlets and they would close permanently later this month, at the cost of five jobs.

In July, workers were pulled from the site because it had become too dangerous and the government indicated it would investigate an alternative route.

The current diversion over the Saddle Road meant most traffic now bypassed Woodville.

Oosh co-owner Kiwi Johnson said the Woodville outlets - Oosh La La, For Frocks Sake and the Oosh gallery - had become unsustainable when the gorge closed.

"Our sales turnover has dropped 50 to 60 percent. While we love the town, and we've actually bought buildings in the town, we can't sustain those losses.

"We're essentially having to funnel funds from profitable business ventures into the Woodville ones which inhibits us growing into other small towns."

Mr Johnson said the tax holiday offered to affected businesses was, in reality, of little use.

"You don't have to pay them now, but you have to pay them later when it turns around.

"That's good, but essentially what you're doing is racking up debt in the hope that you'll turn it around in three years.

"While it's a short term gain, you still have to pay that money back."

The latest slip in the Manawatu Gorge.

The latest slip in the Manawatu Gorge. Photo: Supplied: NZTA

The five Oosh staff were not the only workers in Woodville to fall victim to the downturn in trade.

The New Central Hotel and Motel Inn had let three staff go while the Yummy Mummy's Cheesecake Shop and Windfarm Bakery & Cafe had each laid off one worker.

Yummy Mummy's owner Sarah Williams said she had been disappointed with the government response to the crisis and had thought about relocating.

"There's been no financial help from the government whatsoever, which is really sad and disappointing because we're in the same situation as Kaikōura, as a lot of other places, but for some reason Woodville doesn't matter as much, it's not a big enough disaster, it's not a big enough town."

Ms Williams said Yummy Mummy's was pushing its online sales, but may have to scale back further.

"Hopefully we won't have to lay any more staff off, but if sales continue to decline we probably won't be left with many other options.

"At the moment all cards are on the table. If we have to relocate then perhaps that's something we will look into but at this stage there's no real plans.

"We would love to stay in Woodville. We love Woodville, Yummy Mummy's was born in Woodville."

Tararua District Mayor Tracey Collis said devising an assistance package would be complex.

Some business had insurance payouts, some had to wait until the gorge was closed permanently, while others had no insurance coverage at all, Mrs Collis said.

"Would [Oosh owners] Kiwi and Suzie made the same decision if there had been a package in there around their staff, and then how long would that have had to have been.

"So, Kaikōura, I'm not sure how long they received that assistance but this could be the new level of traffic we have going through Woodville for three years."

Mrs Collis said the redundancies and business closures were a concern and she would be seeking reassurances from the government.

"I might make contact with the minister [of Transport, Simon Bridges] and just have a discussion around ... this is three businesses from the district and the sentiment in Woodville at the moment is very sombre."

The Transport Agency was exploring all options for a long-term solution through the Ruahine and Tararua Ranges, and is due to report back at the end of the year.

Whatever solution it chooses, its estimated construction could take up to three years.

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