Jones said the investment, which would create about 180 jobs, was an investment in the future of a "critical piece of infrastructure for the region, improving safety for tourists, creating jobs and providing much-needed economic stimulus,"
The 1.2 kilometre, two lane tunnel has served as the State Highway 94 Milford Rd link between Te Anau and Piopiotahi Milford Sound since its construction in 1953, and its walls remain unlined gravel.
Food producers
Wearing his regional economic ministerial hat, Jones also earmarked $5.3 million in PGF loans to two food producers, including $2.8 million for Alliance Group's Lorneville plant and up to $2.5 million for Drysdale Hydroponics' vegetable growing business.
The loan will help Alliance convert the venison processing plant to include beef processing, providing an extension to the processing season by between 10 to 12 weeks, and will support up to 20 new jobs.
Even when the Tiwai Point workers are included, the meat cooperative is Southland's largest employer employing a combined 2,500 people through its Invercargill office and its two plants at Lorneville and Mataura.
The loan to Drysdale will help it expand and diversify its vegetable range, including tomatoes, capsicums, strawberries and micro-greens, such as lettuce or sprouts.
Jones said that Southland needs a "wider variety of food production other than beef and dairy, sheep and root-stock vegetables for commercial supply," and that the hydroponics business has proven it can commercially produce lettuce and other leafy greens in Southland.
"This will be a great asset to the region where demand for fresh, locally grown produce can often outstrip supply. Produce not produced in Southland needs to be airfreighted from the top of the North Island, at considerable extra economic and environmental cost to both growers and consumers."
