For proposed wood chip traffic, an _I__ wagon was converted. A log chipper and hopper were erected in the Colac yard. Anticipated traffic movement was for the logs to be trucked into Colac, the logs chipped and then dumped into KW 1 for transport to Melbourne. However, this traffic failed to eventuate when agreement was reached between the logger and the Melbourne firm ( Smorgens ) to chip on site and truck direct to Melbourne. The vehicle sat unused at Colac until transferred to Melbourne and placed 'Off Register'.
By 1974 the vehicle was in storage at Newport Workshops with most markings weathered off.
In 1977, the superstructure was chopped off, the underframe painted yellow and vehicle transferred to South Dynon Loco Depot where it was fitted with standard gauge axles. It was used as a depot flat wagon.