Northland's rail network is being revitalised with a $109 million government injection seeing a mothballed line reopened, tunnels altered to allow hi-cube containers for the first time and a container terminal at the Otiria rail yard, in Moerewa.

Land will also be bought along the designated path of the proposed Oakleigh to Port Marsden rail spur.

Just a day after the Government announced more than $700M in infrastructure funding for Northland - including four-laning State Highway One from Whangārei to Port Marsden Highway, more cash was being dished out today in Whangārei.

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The Government's latest investment in Northland will enable hi-cube container freight to be transported by rail in the region for the first time ever, KiwiRail Group Chief Executive Greg Miller says.

State Owned Enterprises Minister Winston Peters and Regional Economic Development Minister Shane Jones announced a further $109.7m rail investment through the Provincial Growth Fund in Whangārei today.

The last train between Whangārei and Otiria ran on August 31, 2016, above, when the line was mothballed north of Kauri. Today's Government announcement will see the line reopened.
The last train between Whangārei and Otiria ran on August 31, 2016, above, when the line was mothballed north of Kauri. Today's Government announcement will see the line reopened.

A total of $69.7 million will be spent on lowering tracks in the 13 tunnels between Swanson and Whangārei; reopening the currently mothballed rail line north of Whangārei, between Kauri and Otiria; and building a container terminal at the Otiria rail yard, in Moerewa.

As part of today's announcement, $40 million will be used by KiwiRail to buy land along the designated rail route between Oakleigh and Northport/Marsden Point.

"I'm really impressed by the ingenuity of KiwiRail's engineering staff to be able to lower the tracks in the tunnels – which is a lot less expensive than boring bigger tunnels,'' Miller said.

"The tunnel work will have a huge impact on how freight is moved in and out of Northland. Currently 18 million tonnes of cargo is moved in and out of the region every year. Of that, around 30,000 containers leave Northland by road. Most aren't able to fit through the tunnels, but this investment will change that - opening up a whole new market to rail."

Miller said that not only does rail have 66 per cent fewer emissions than road freight and help reduce congestion by taking trucks off the roads, it also offers road maintenance cost savings.

He said reopening the line to Otiria and building the container terminal there will catalyse the growth of agriculture, horticulture, dairy and support forestry in the far North.

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"This part of Northland is what the Bay of Plenty was like 40 years ago. Connecting the Bay to rail resulted in phenomenal growth and helped create the prosperity it experiences today. Rail access has the same ability to transform Northland, as a critical infrastructure that will unlock value in the region,'' he said.

"Rail will help build a bright future for Northland and we want to maximise benefits for the region now. Around 200 contracted staff will be working on 10 fronts across Northland simultaneously, and KiwiRail is taking on 12 more local staff for ongoing maintenance of the Northland Line.

"We will also be looking at where we can take on new apprentices to get more young people into our industry and will support our contract partners with their recruitment as well. We're trying to use Northland-based contractors for our rebuild project where possible, so that this investment flows straight back into Northland's economy."

This is the second PGF investment in Northland rail, following the $94.8 million provided to make significant improvements to the Northland Line between Swanson and Whangārei, announced last year.

Northland firm United Civil Construction has been awarded a contract to replace two bridges on the line near Whangārei.