The Government is to investigate the possibility of a major Eastern Bay of Plenty rail project - an inland hub connecting exports from Murupara and Kawerau to rail.

Shane Jones today announced the first of the regional rail initiatives the Government says it is looking to support.

The Regional Economic Development Minister and Associate Transport Minister made the announcement during the official launch of the Provincial Growth Fund in Gisborne today.

The Provincial Growth Fund will provide $8.75 million to reopen the Wairoa-Napier line for logging trains, upgrade the Whanganui line for mainline locomotives carrying exports and fund feasibility studies for three further regional rail projects.

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"Rail generates 66 per cent fewer carbon emissions compared with heavy trucks – the sort of reduction we need to meet our country's ambitious climate change targets.

"We're providing $250,000 for three feasibility studies on KiwiRail projects in Kawerau, Southland and New Plymouth – $750,000 in total," he said.

"The Kawerau study will look at options for creating an inland hub to connect exports from Murupara and Kawerau to rail."

Jones said the Government had signalled its strong commitment to using rail to drive regional growth and he expected more projects would be funded over time from the Provincial Growth Fund.

"These are relatively modest investments in dollar terms, but we expect them to deliver good value and to support regional businesses. The Government is making safety a higher priority when it invests in transport and taking logging trucks off challenging roads contributes to that."

"KiwiRail's financial result released this week showed an 8 per cent revenue increase in its overall forestry business in the six months to December – a result being driven by strong growth in the volume of logs."

Jones said in Southland, KiwiRail would work with local forestry interests and ports to determine the best export flows for forestry and containers and the New Plymouth study would also focus mainly on opportunities for forestry exports.

"I look forward to learning more about the three proposals and continuing to be a champion for regional rail."

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Rotorua's New Zealand First MP and Parliamentary Under-Secretary for Regional Economic Development Fletcher Tabuteau congratulated Jones on launching the Provincial Growth Fund.

"This Government is committed to our regions and the Provincial Growth Fund demonstrates how serious we are about providing economic opportunities to all parts of New Zealand," he said.