Two major inland port projects are vying to become the South Island’s primary logistics hub.
Mosgiel-based Southern Link, backed by Port Otago and Dynes Group, and Milburn’s Milburn Quadrant, led by Calder Stewart, are both in various stages of development, just 50km apart.
One has public funding and port backing, the other is privately funded and twice the size, and both promise to ease growing pressure on Port Chalmers and reshape Otago’s future as a logistics powerhouse.
According to industry projections, Dunedin’s current seaport is facing a 30–40% growth in freight volumes over the next decade.
On one side is the Southern Link project, a $200 million joint venture between Port Otago and freight company Dynes Group.
Just days after the Milburn Quadrant was publicly revealed, Regional Development Minister Shane Jones announced at a regional growth summit in Dunedin that the Southern Link project would be receiving $8.2m in public funding.
The 50-hectare site near Mosgiel is set to open its first stage in October, consolidating five existing logistics depots and linking directly to the port’s new $13.5m rail siding.
Meanwhile, the Milburn Quadrant is a sprawling $3 billion privately funded development by Calder Stewart.
The 200ha industrial precinct includes a 55ha inland port with capacity for up to 600,000 20-ft equivalent units (TEUs) annually.
Located near Milton and already zoned for heavy industry, Milburn boasts direct access to State Highway 1 and the South Island’s main trunk rail line.
Both claim to offer a long-term fix for Otago’s export bottleneck, particularly for the dairy, forestry and aquaculture industries, but differ sharply in their funding, scale and delivery models.
“Milburn is a shovel-ready, future-facing development that solves real capacity issues for our exporters,” said Mark Johnston, land & delivery manager at Calder Stewart, on the day of the public announcement.
“It’s fully privately funded, so it won’t burden ratepayers and offers the scale and connectivity our regional economy urgently needs.”
The Milburn site also includes rooftop solar generation, with the potential to produce up to 50 megawatts of power.
A 350kW system is already operational at Calder Stewart’s steel fabrication facility, part of the completed first stage of development.
Calder Stewart says the project could eliminate over 10,000 heavy truck movements annually by shifting freight to rail, while offering space and storage advantages for bulky, seasonal forestry exports.
By contrast, Southern Link backers say their site’s strategic alignment with Port Otago’s existing rail infrastructure gives it a decisive edge.
“This location offers a smarter, faster solution,” said Port Otago CEO Kevin Winders in an earlier announcement.
“We’re focused on ensuring the most efficient logistics network, and this development keeps us future-ready.”
Clutha District Mayor Bryan Cadogan said the Milburn proposal, spearheaded by construction firm Calder Stewart, was already consented, environmentally beneficial and far more advanced than any other plan.
“Calder Stewart’s been working on this project ever since I’ve been there... It’s been the biggest project, the most exciting thing in line for our district. It is a rural project that’s streamlining the supply chain line of the rural produce that comes out of Southland and Central Otago.”
He said a converging freight passage on the Taieri Plains currently acted as a bottleneck, with the inland ports set to improve efficiency and reduce environmental impact.
“The beauty of it is, Calder Stewart have been planning this - what they do, they do it magnificently - but they’ve been planning it for at least over a decade. Clutha District Council put through all the district plans for it five or six years ago... It’s been well-documented. It’s been open, transparent, and openly known to all and sundry for many years now. It’s just exciting to see it materialise,” Cadogan said.
“I think it’s just so magnificent to have a premier company for the lower South saying, ‘Hey, we believe in our region. We believe in the future. We believe streamlining the supply chain is such a big part of it’.
“It’s a massive project funded by Calder Stewart. Isn’t that what we as New Zealanders should want? One of our own is doing it.”
Port Otago, in response to questions, said the Milburn project was “not a like-for-like alternative”, but that the Southern Link has been set up “in the best location for our customers from the north and south of our region to integrate efficiently with our port operations”.
“The Milburn Quadrant is a private property development to establish a business park,” a Port Otago spokesperson said.
“We welcome them as part of the solution for expanding rail freight in the region.
“Our Southern Link Logistics Park has an 18-month head-start in development and a strong group of committed logistics and government partners and customers who see the clear benefits for our region.”
Asked about public funding, the company said: “We’re pleased government see the clear public benefit the Southern Link Logistics Park will bring to the region and the city through the loan made available to KiwiRail to complete the rail siding. This supports the $200m private investment and backing from Dynes Group.
“The Southern Link Logistics Park is set up around existing customer operations and will keep jobs in Mosgiel and Dunedin. When completed, we expect a reduction of over 19,000 truck movements annually from Dunedin city streets on to rail.”
Port Otago also suggested the project would be key to unlocking wider infrastructure improvements.
“Growth in Mosgiel over the past decade has already put pressure on infrastructure that was designed decades ago and clearly isn’t fit for today. It’s time it was improved, and the Southern Link Logistics Park is the catalyst to fix this by finally getting the new State Highway bypass built.
“While our hub will take truck movements away and move them to rail, getting the bypass finally built will have wide benefits for all Mosgiel residents.”
The spokesperson said the company was working closely with the Otago Regional Council, the Dunedin City Council, KiwiRail and NZTA Waka Kotahi.
“Port logistics is our core business, and this project will be of great benefit to how we efficiently operate our sites at Port Otago and generate returns for ORC as our shareholder and ultimately our community.”
Port Otago declined to consider a collaboration with Calder Stewart: “We are committed to the Southern Link Logistics Park.”
Ben Tomsett is a Multimedia Journalist for the New Zealand Herald, based in Dunedin.
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