The announcement that Dannevirke has been allocated $4.4 million for a rail hub has drawn mixed reaction from the community.

Of that amount, $400,000 was to evaluate the effects of a new rail hub would have on the local roading network, with the $4m granted for the construction of the hub should it go ahead. The funding was part of a $40m package for Central Hawke's Bay from the Government's Provincial Growth Fund (PGF) announced on Monday.

While the announcement was welcomed it also raised questions.

Mayor Tracey Collis said the news was positive.

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"We welcome the $400,000 to investigate the impacts of a new rail hub in Dannevirke and the subsequent investment in construction. There will be significant economic benefits across a range of industries in Tararua as a result of this build and future rail hub."

Collis said it would provide additional employment opportunities.

"The benefit of reducing the number of logging trucks both helps our roading networks and enables safer journeys all round."

She said transporting logs to market by rail reduces the carbon footprint.

But she said she would anticipate the investigation would highlight the need for further investment in the roading network in Tararua District, particularly its section of Route 52.

She looked forward to working with the PGF to identify further opportunities for project support.

"However, while we are thrilled for Central Hawke's Bay, Tararua District Council and our residents are still reeling from the news that we have not received targeted enhanced funding assistance rate (TEFAR) funding for Route 52 from the NZ Transport Agency.

"The development of a rail hub in Dannevirke will make investment in this vital road all the more important and we will continue to push for support for this project."

KiwiRail regional business development manager Aaron Temperton said KiwiRail was mindful that the initiative was in its early stages but it was excited about the propects of exploring and developing the Dannevirke Rail Hub.

Dannevirke Chamber of Commerce chairwoman Sue Berry said the announcement raised more questions than answers.

"What does concern me is what sort of timeframe is being worked to. It also raises the question of how this can go ahead without upgrading Route 52 from Wimbledon to Weber. The infrastructure needs to be in place."

Berry felt things were being carried out in the wrong order.

"Another question that arises is where will the rail hub be. Will it be at Oringi, or in Dannevirke or even at Mangatera."

Berry said it sounded to her that this was a case of the Government being reactive rather than proactive.

"We have heard that nothing was happening in the region, then out of the blue we hear the district has been allocated funding for a rail hub.

"It would be fantastic if the rail hub did go ahead, but I think a deeper look needs to be taken at the project."

One local resident with extensive knowledge of the region's history of forestry is former Tararua District Councillor Tom Castles who was chairman of the council's forestry company.

"In the 1990s there was a substantial amount of logs railed out of Dannevirke. A council owned stand of trees at the back of Akitio Beach was sold and felled. These were transported to Tahoraiti and railed to Napier. This went on for quite a while."

He said there was plenty of land on which to stack logs at Tahoraiti, which is just south of Dannevirke, so he felt it would be relatively easy to get a rail hub up and running there.

"We had a good system worked out with the logging trucks so that they weren't on the road when school buses were. However, at that time the number of logging trucks on the road wasn't as high as it is now and that is going to be a problem.

"I was absolutely staggered that the problem with Route 52 from Wimbledon to Weber wasn't explored further first. Anyone could have told the PGF people that there needed to be an investigation into the work that will be required on that road. It's well known that the council has been proactive in seeking funding to repair it."

Castles said the idea of a rail hub was good but with an increasing number of logging trucks the road was only going to get worse.

"A rail hub would be good for the district, it will create jobs and we need jobs. It just annoys me a lot that we have dipped out on PGF money for Route 52.

"The rail hub concept is fine, it will take pressure off the main roads, but it's the practicalities that haven't been considered. You have got to have roads that are in a condition that can carry trucks to the rail hub. I think this has opened a Pandora's box."