Labour's pledge to inject up to $20 million to support the construction of a timber pre-fabrication plant in Gisborne would have spin-off benefits for Hawke's Bay, but to work needs both rail and road transport options between Gisborne and the Napier Port, says Hawke's Bay regional councillor Alan Dick.

Labour leader Andrew Little announced yesterday that if elected a Labour-led government would provide a stimulus package up to $20m to enable the construction of a timber prefabrication plant and associated infrastructure in Gisborne.

"One of the biggest strengths of the Gisborne region's economy is timber, yet too many logs are being shipped straight offshore without jobs and value being created for locals.

"This money will match dollar for dollar investment from businesses and local economic development agencies, and be subject to a robust and transparent tender process."


He said the funding could be used for construction of the plant, investment in necessary infrastructure upgrades to support it, or supporting sawmilling technology to help provide the lumber.

The new factory would complement the existing Wood Engineering Technology plant being constructed on the Prime Sawmill site.

"Our plan also elevates Gisborne's industry and talent-base into a key role for building of new homes. The housing shortage in New Zealand is growing by 16,000 homes each year and the Government has no plan to deal with the housing crisis.

"By bolstering an already growing prefabrication industry, we can boost the industry's ability to build houses at affordable prices."

Mr Dick is a member of the regional council's corporate and strategic committee, and said both the Gisborne and Hawke's Bay districts could certainly benefit from added value of timber and processing crops but there was a need for suitable transport infrastructure.

"State Highway 2 is a difficult road already - it's become congested with logging trucks and it will get worse even with rail picking up a good part of the task starting later this year.

"For something like this to work, and I'm sure it can, Gisborne district needs dual transport both to support and complement each other and provide price competition.

"There's huge potential for Gisborne and Hawke's Bay, because for export purposes the Port of Napier is the prime and logical destination."


To date a deal between KiwiRail and the Port of Napier had been reached, underwritten by the Hawke's Bay Regional Council, for when the Wairoa log harvest starts coming on stream this year.

This would see KiwiRail cart logs from Wairoa to the Port of Napier, initially with four trains each weekend, progressing to a daily service, Mr Dick said.

"This gets the rail line operating again - it's in good condition up to the Hawke's Bay Regional Council boundary north of Nuhaka, but Gisborne is left on a limb because of the 2012 washouts.

"They need to be fixed and there are moves under way from the Gisborne end to encourage that to happen."

Last week the Gisborne Rail Co-operative made a presentation to the council's corporate and strategic committee seeking support to approach KiwiRail to reopen the Gisborne end of the Napier-Gisborne line for freight, as well as tourism services.

Committee chairman Neil Kirton said if the group could get a commitment from the Gisborne District Council to put some money towards developing a business case then the regional council would also consider contributing some money.

Labour's Tukituki candidate Anna Lorck said working in partnership with regional industry and getting behind local aspirations was a way to support business growth, opportunity and regional economic development.

"With billions of logs being milled out of Hawke's Bay over the coming years we must have confidence that our rail and roading infrastructure will manage and can get our logs to market - for New Zealand added value products and for export.

"Hawke's Bay has made great progress on standing up for the Gisborne/Napier rail line, despite the National Government being against it and wanting a cycle way instead. We're all go now on the Napier to Wairoa section and this could well provide an even stronger case to get it opened all the way to Gisborne."

She added the move would also support building more affordable housing in the region.

"We need to build more houses to address the shortage and attract people to the region."

Napier Labour MP Stuart Nash said this was a first step in partnering with territorial authorities, who were driving such initiatives.

"We did not go to Gisborne and say you want to build this, they came to us to ask for support - it's being driven by them which is the only way economic development in the regions can be successful.

"And this is what it's all about - economic development and jobs, and we are helping enable that."