The Government has approved a $22.4 million loan for the rail component of a freight hub in Palmerston North.
Rail Minister Winston Peters and Regional Development Minister Shane Jones announced the Regional Infrastructure Fund backing for the Bunnythorpe Regional Freight Hub, part of the wider Te Utanganui programme.
Te Utanganui is planned as an intermodal hub in the lower North Island linking rail, road, air and sea freight networks. The Bunnythorpe hub forms one of three elements in the overall programme.
Staged funding structure
The loan will be released in phases, with $1.9 million allocated to the pre-construction phase.
A further $20.5 million for construction will be released once a business case and delivery plan are confirmed. The construction tranche is conditional on those documents being approved.
The complete development requires commitments from freight and port operators in addition to the Government loan.
Delivery partners
Manawatū's Central Economic Development Agency leads the project, working alongside local councils, iwi, KiwiRail and private co-funders.
Peters said the infrastructure would improve efficiency across rail and road networks. "This is critical freight infrastructure that will improve efficiency using rail and roads, strengthen supply chains, and drive economic growth in the lower North Island," he said.
Jones said the fund helps reduce risk for private investors. "Early-stage infrastructure is expensive and doesn't usually create immediate income for investors. Through the RIF, we have helped de-risk the wider project to enable private sector investors' confidence to co-invest."
Employment outlook
Early works on the freight hub are expected to generate 100-300 jobs.
As the wider Te Utanganui programme takes shape, employment could expand significantly, potentially reaching thousands of roles across logistics, manufacturing and associated sectors.