The Government has allocated $22.4 million from the Regional Infrastructure Fund for the next phase of Te Utanganui freight precinct in Manawatū.
CEDA chief executive Jerry Shearman said the loan would fund preparation of a business case and construction work for a rail connection linking Palmerston North Airport with Bunnythorpe. The precinct aims to link freight movement throughout the lower North Island via air, road, rail and sea.
"This is pretty vital. For an economic development agency to drive this work ahead would require us to invest money that we'd have to go back to our shareholders to request or to the stakeholders in this project. That wouldn't be palatable so this investment from central government, even as a loan, is quite critical," Shearman said.
The business case and detailed design work for the rail connection are due for completion within 18 months to 2 years. If the project proceeds as anticipated, construction could commence by 2030.
Regional Development Minister Shane Jones said the loan would maintain momentum on the project and address an infrastructure deficit that constrains economic growth in the lower North Island. Jones said the funding would encourage private sector investment.
The precinct has a total cost of $2.6 billion and is expected to be completed by 2050. Woolworths, Foodstuffs and primary sector businesses have operations at the hub. Early construction work is projected to generate 100-300 jobs.