Government backs major North Island freight hub

The Government has approved up to $22.4 million in funding to support the rail component of Te Utanganui - a major new freight hub in Palmerston North, Rail Minister Winston Peters and Regional Development Minister Shane Jones say.

Te Utanganui is an intermodal distribution hub in the lower North Island that links rail, road, air and sea. The Regional Infrastructure Fund (RIF) loan will support pre-construction and construction stages of the Bunnythorpe Regional Freight Hub, one of three projects in the wider Te Utanganui freight hub programme.

“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,” Mr Peters says.

“The full development will require investment commitments from freight and port companies but this investment enables the next stage of works to develop and to continue to secure the landholdings to generate value for the taxpayer.”

The funding will be delivered in stages, with $1.9m allocated to pre-construction, followed by up to $20.5m for construction once a robust business case and delivery plan have been confirmed.

Mr Jones says government support was key to the project staying on track.

“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.” Mr Jones says.

Led by Manawatū’s Central Economic Development Agency, the project will be delivered with local councils, iwi, KiwiRail and private co-funders.

Around 100-300 jobs are expected to be created during early works on the freight hub, with significantly more jobs created over time as the wider Te Utanganui programme develops, potentially supporting thousands of roles across logistics, manufacturing and related industries.

“This funding helps address the infrastructure gap constraining economic growth in the lower North Island regions. It will unlock industrial land, build resilience and strengthen efficiency in the logistics network,” Mr Jones says.

“This investment will enable our regions to grow and set them on a strong path for the future.” ...